Category Archives: Arsenal Ownership
In May of 2011, a sort of palace coup was engineered at the Emirates with the two remaining substantial shareholdings of Danny Fiszman and Lady Nina Bracewell-Smith going to Stan Kroenke and in effect Kroenke was anointed the new “emperor” of Arsenal Football Club. Except the Russian billionaire Alisher Usmanov refused to play ball and increased his holding in the club too!
Usmanov’s holding of just under 30% is a nuisance to Kroenke as this prevents him from passing special resolutions and doing whatever he wants with the club. The Russian’s shareholding should entitle him to a seat or two on the board of the club, but such is the animosity towards Usmanov from the club’s old hierarchy that they would rather the club collapsed before affording this courtesy.
So where does this leave Arsenal? Kroenke has wealth, but the sort that will result in him writing blank cheques for an Arsenal manager to spend on players. Kroenke has many sporting interests in America which means he will not get involved in the day to day running of the club nor will he sanction major transfers. In effect Kroenke is running the club by remote, by Skype! This at a time when Arsenal’s position as a top 7 club is being threatened. Whilst other clubs have active hands-on owners / chairmen, Arsenal is being run like a major corporation with budgets set for wages and transfers, and regardless of the change in circumstances we will keep to those budgets.
Football is not like a “normal” business. Unless a club spends big in the transfer market it will not attract top players and without top players trophies cease to arrive. Take a look at Wenger’s early years, top players came to the club, not top potential, top players and trophies followed, now look at the last 6 years, we have brought in potential every year and with that we have achieved nothing. The model needs to change, but the board are powerless to authorise a change in this model as the owner is happy with our financial results!
The club is at a major crossroads and the ownership of the club will determine whether we enter many more years of trophyless seasons or the trophies and top players start to come back. The continued ownership of Kroenke will see Wenger rule the roost at the Emirates, a frugal approach to the transfer window and many promises of potential followed by seasons of disappointment. This in effect is the ghost of Arsenal seasons to come, but these can be changed. Kroenke can sell his stake to Usmanov in the summer for a very good profit and then we enter into a completely new ball game.
Whether David Dein re-joins the board is another matter, but Usmanov will not only give Wenger a very large transfer budget, he will insist that he uses it. Usmanov will explain to Wenger that the club needs to win trophies and if that means breaking the bank to bring in top players like Goetze or Hazard, then we MUST do this. He will also explain to Wenger that UEFA Financial Fair Play rules are null and void. There are too many big clubs, Real Madrid, Barcelona, Manchester City, Manchester United, Chelsea and PSG too name but a few who are too big for UEFA to take any sanctions against. In no uncertain terms Wenger will be told to spend to win trophies, for 6 season operation youth development has failed, and now is the time for change.
These are the options faced by our club, more of the same under Kroenke or a dash for gold under Usmanov.
It’s now or never for Arsenal Football Club. Stan Kroenke has been mopping up small shareholdings over the last couple of weeks to raise his share in the club to 29.8%. He is a fraction below the mandatory bid figure of 29.9%.
It was rumoured that he bought 100 shares from Arsenal chairman Peter Hill-Wood; this is the same man who famously said, “We do not need his sort at this club.” Hill-Wood has since been turned by Silent Stan and went as far as saying he would welcome a bid fro the club by Stan Kroenke, for which he got his knuckles rapped by the city Takeover Panel.
At the club’s AGM when asked about a possible takeover, Stan Kroenke remained silent on the matter, any comment would have meant he would be precluded fro many takeover for six months.
Any takeover of the club, and it is now becoming inevitable will hinge upon the three major shareholders, Danny Fiszman who has sold shares to Kroenke in the past and allegedly not been paid for tem), Alisher Usmanov who bought his shares from David Dein and finally Lady Nina Bracewell-Smith who was sacked from the board last year but has recently been seen in the directors box.
Arsenal fans want something to happen, but not at any cost. What we do not wish to see is Kroenke’s company land Arsenal plc with the debt of him buying the club. If we can have assurances that this will not happen, then Kroenke will be a good owner for Arsenal, and we know that he gets on well with Gazidis who is slowly changing things behind the scene.
Arsenal announced their financial results for the year ending 31 May 2009 and the news is great on all fronts.
Revenue from football activities is up £18million due to our extended runs in both the FA Cup and the Champions League. When people say qualification to the knock-out stage of the Champions League is worth £20million that is not far off the mark.
The figures include profit on sale of player registrations of £23million; this is the income we received from the sale players plus sell-on clauses for Bentley and Diarra. The net profit on transfer dealings for the year was £5.2million; this was due to the purchase of Arshavin being included in these figures. So yet again Wenger has turned a profit for the club. Unless we buy anyone in January, the profit for the year 2009/10 will be in the region of £30million on player trades.
The best news comes from the loan on Highbury Square and the sale of flats.
The club had told us that up to last November only 90 flats we sold. There were stories, notably in the Guardian that we had only sold 2 flats since then. The loan associated with the flats was due for repayment in April 2010. Arsenal was facing financial oblivion.
The club re-negotiated the loan repayment to December 2010, which is great news. But the news improved, the club had sold 208 flats as at May 2009 reducing the loan from £135million to £124million. Since then the club has gone into overdrive and has now sold 445 flats out of 655 flats, bringing in income of £172million and reducing the loan to £47million. The club has 210 flats to sell and will generate around £80million, hopefully by the December 2010. This will give Wenger a bonus of £40million.
When people say we have no money, look at the balance sheet, £99million cash at the end of May. Part of this cash mountain was early season ticket money, though not in its entirety, if you add to this the £30million net transfer from the summer activities and the balance of season tickets, the club must be sitting on a cash balance of around £130million, not bad for a club that is in financial crisis.
Now that we have seen the figures, we can rest assured that the club is now in a better financial position than we were being led to believe by many pundits. The football operation made a profit of £43million excluding transfers. The interest payments were £17million. Next time idiots on the radio say Arsenal have massive interest payments remember these figures and quote them back, even after the interest the club makes £26million profit a year.
Arsenal has had a giant axe hanging them in the form of a loan in the region of £130million. This loan needs to be repaid by April 2010. The loan relates to the development of Highbury Square.
Unless anyone has been living in a cave for the last 18 months, the property market has collapsed, leaving the club with over 600 flats to sell. The idea was that the flats will be sold by summer 2009, the loan would be repaid this summer and either Wenger would be given the surplus, £100million, to spend on the team or it would be used to reduce the debt generated by the building of the Emirates.
That was the plan, and all was going well with over 90% of the flats “pre-sold” with people leaving a deposit of £1,000 to secure their dream home.
Reality set in and last October the club had completed the sale of 90 flats, generating £39million (this money was used to pay of part of the loan and monies owed to the contractors). Since October the cub have been silent on the number of flats sold, though The Guardian claims that we have managed to sell a further two flats since then.
The club insists that the development is ring-fenced from the footballing side of the business, so in theory if the building part of the company went into liquidation it would not affect Arsenal FC, in reality that parent company would have had to give assurances to the banks in obtaining the initial loan which would have an ultimate impact on the football club.
The club has been desperate to re-negotiate the loan repayment, probably pushing the repayment date from April 2010 to April 2012. The extra two years should see the housing market improve and the club would then realise the income it had anticipated.
It has been reported over the week-end that the banks are prepared to extend the loan repayment period. This would be great news for the club. It would show confidence in the club having the ability to sell the flats albeit over a longer period and it would ease the financial constraints that Wenger has been working within over the last couple of seasons.
The club was right in developing Highbury and keeping the project in-house, the development will show a big profit. Unfortunately the directors were caught out like everyone else when the “credit crunch” hit. Obtaining an extension on the loan is another indication that Ivan Gazidis is a man who gets things done; it shows he is the ideal CEO for Arsenal.