Feb. 24 (Bloomberg) -- A day after securing funding for a new stadium that will help Arsenal compete financially with Manchester United, the Gunners resume their efforts to emulate the Premiership soccer champion's success in Europe.

Arsenal defeated Chelsea for the second time in a week Saturday to remain unbeaten after 26 league matches and close in on a third English title in seven years. Manager Arsene Wenger's side tonight visits Celta Vigo in the last 16 of the Champions League -- having lost on its last four visits to Spain.

``I've never had an easy game in Spain, they're always difficult,'' Wenger told the club's Web site. ``It's an opportunity to show we've improved.''

While the Gunners have advanced to the knockout stage of Europe's top competition twice in six attempts, United has reached seven straight quarterfinals and won the event for the second time in 1999. After Arsenal won its first-round group in December, Wenger said that to match United his team needs success in the Champions League, a tournament the club has never won. In the Premiership, Arsenal has overtaken its rival, Celta's Savo Milosevic said.

``I've seen a lot of United and Arsenal on TV, and it's clear that Arsenal has taken over as No. 1,'' former Aston Villa striker Milosevic said at a press conference. ``They are playing the better football, have superior players and are far more confident.''

Arsenal moved a step nearer satisfying Wenger's European ambition yesterday with the announcement that work is to start on a 60,000-capacity stadium at London's Ashburton Grove costing 357 million pounds ($667 million).

``It has been a big target of mine to participate in pushing the club forward and relocating will enable us to become one of the biggest clubs in the world,'' Wenger said.

Revenue Boost

Arsenal expects to complete the new ground by July 2006, and the resulting boost in ticket revenue will narrow the gap with United. While the Gunners' Highbury home holds 38,500 fans, United's Old Trafford stadium takes 67,000 and generates 1 million pounds more revenue at every home match.

Increased earning power may make it easier for Arsenal to retain its manager and leading players. United's extra income has allowed it to place Roy Keane and Rio Ferdinand among the top 10 earners in world soccer, according to the Sky Sports Football Yearbook.

The Gunners have no players on the list. Even so, Arsenal last season persuaded French World Cup winners Patrick Vieira and Thierry Henry to sign new contracts and last month bought Spanish forward Jose Antonio Reyes for a fee that could reach a club record 17 million pounds.

Henry, December's runner-up for world and European player of the year, was among Arsenal players welcoming the new stadium.

`Great Stadium'

``If you want to move forward and be a bigger team in Europe you need this kind of great stadium,'' he told the club Web site.

Arsenal's managing director Keith Edelman said yesterday that Wenger will have more money to spend on players, even with repayments on loans of 270 million pounds. That may persuade the Frenchman to extend his stay in London beyond 2005.

``I'm prepared to be committed to the club at least until we go into the new stadium,'' Wenger said. ``I've pushed the board into this situation so to run away would not be fair.''

United and fellow Premiership team Chelsea advanced to the last 16 of the Champions League with matches to spare. The Gunners, though, were bottom of their group after three games and five minutes from elimination until Ashley Cole's goal earned a 1- 0 win against Dynamo Kiev.

`Dangerous'

A 5-1 win at Inter Milan, a record home defeat for an Italian side in European competition, and a 2-0 victory against Lokomotiv Moscow followed. Arsenal won the group, ensuring a home match in the second leg of this round.

``We have pace and we can score on the break,'' Wenger said. ``That makes us dangerous. We have had problems with teams who accept us as superior and concentrated on defending at home -- like Moscow and Kiev. They played just on the break.''

Vieira has recovered from a swollen knee and will play in Spain. Fellow midfielder Gilberto Silva and defender Cole will miss the game with ankle and back injuries.

Edu is likely to partner Vieira in central midfield, while Reyes may start his first Champions League game alongside Henry because of Dennis Bergkamp's fear of flying.

While the Gunners lead their domestic league by seven points from United, Celta lies 16th in the Spanish Primera Liga's 20- team standings.

`Good Squad'

Celta three weeks ago fired coach Miguel Angel Lotina and hired Raddy Antic until the end of the season. The former Real Madrid and Barcelona manager, a midfielder for English side Luton in the early 1980s, led Celta to two straight wins before Saturday's 2-0 defeat at Malaga.

Celta, which was runnerup to champion A.C. Milan in a group also featuring Club Brugge and Ajax, is rated 11/4 by William Hill to reach the quarterfinal. Arsenal is 1/4.

``They have a good squad and a good manager, so should be favorite,'' Antic said. ``But I think it's open -- they've had some injury problems and a lot of important matches coming into this game.''

To contact the reporter on this story: Ryan Mills in London at at rmills5@bloomberg.net.

Last Updated: February 24, 2004 05:07 EST