McDermott's relegation-threatened Reading take on the Gunners tonight with both clubs going through unrest.
He said: "Arsenal are a massive club and well run financially, a terrific institution. I can't see it as them being in crisis.
"They generally come good at the back end of the season.
However many years since Arsene has been there, they have made the Champions League. I have always kept a lose eye on how Arsenal are doing because I was there eight years and they taught me a lot.
"Historically Arsenal are in the top three or four every season."