Arsenal the Franchise

When Stan Kroenke first bought a substantial percentage of Arsenal, by purchasing ITV’s 9.9% share of Arsenal back in 2007, Chairman Peter Hill-Wood made his infamous quote ‘we don’t want his sort here’, in reference to a perceived takeover bid in the making from the American billionaire. Naturally, Hill-Wood’s view may have been coloured by the fact that it was David Dein who had brought Kroenke to the shareholders’ table, with his subsequent dismissal from the board of directors due to his going behind the backs of his colleagues in a failed attempt to effect a take over in the Highbury House boardroom. Yet, it should be remembered that the reason Dein was cognizant of a potential interest from Kroenke was the already established partnership deal between Arsenal and his MSL Colorado Rapids team, one that in theory would raise the Gunners’ profile Stateside.

 

How things changed. In 2008, Kroenke was warmly welcomed onto the board of directors at the club, with Dein on the outside with Red and White Holdings, the purchasers of his shares. Hill-Wood expressed regret at his comments, which he claims were not as quoted by the press. Kroenke established an axis of power with Danny Fiszman that meant the distrusted Lady Nina Bracewell-Smith could be dispensed with from the board, following in the steps of Dein.

 

It is not known how closely Fiszman and Kroenke worked together on Arsenal matters, but enough of a relationship developed whereby, as Fiszman’s health failed, he made arrangements to sell his shareholding to the American before his death, effectively handing over control. Lady Nina accepted Kroenke’s offer to buy her shares, giving him comfortably over 50% of the club. Yet the Americanisation of Arsenal was in progress some time before that, evidence that Kroenke – even if he was sitting back in Denver much of the time – was having an influence.

 

Kroenke claims not to have played a direct role in the recruitment of Ivan Gazidis as the club’s CEO after Kroenke had only just got his feet under the boardroom table. He was doubtless aware that to claim involvement would rub his fellow MSL club owners up the wrong way, yet it seems inconceivable that he did not have any influence in the idea of approaching the American league’s highly regarded deputy commissioner. Gazidis looked at the way the club was conducting its affairs off the field, and quickly realised changes were needed to get Arsenal up to speed as a business. A team of specialised executives was installed, including sports marketing expert Tom Fox from the NBA to head up the commercial department.

 

One of the ways that the Americans look at sport is that a club is as much a business as a team, and this has shaped the ethos of Arsenal in 2012, to the chagrin of many old school supporters. Winning is good, unquestionably, but it is not integral to the idea of success. Effectively, Kroenke will feel like he has bought a franchise in the Premier League, and will be aware of the potential of not only the football team he controls, but the drawing power of the competitions in which it partakes – specifically the Premier League and the Champions League. With Tom Fox’s NBA background – marketing the league as a package to Asia (as opposed to individual clubs) – there is a certain amount of ‘league think’ in the policy of the new regime, as opposed to ‘club think’. If the competitions they partake in are marketed successfully, all participating clubs will benefit. Yet ‘league think’ is not an approach shared by Manchester United, despite their owners being American too. But United are in the position of having developed their own brand very strongly, independently of the Premier League. Arsenal have fallen a long way behind on that front, unable to fully exploit their real glory years between 1998 and 2005 due to a failure to address their commercial operation as minds were totally focussed on the stadium move.

 

As it stands, the view of Arsenal’s current executive team is that profits will come regardless of trophies. And with a sold out stadium charging the highest prices in English football and the ever-increasing revenue of TV rights deals, it is actually difficult to argue with that. Naturally, winning something is desired, but significantly, as long as profits are being delivered year on year, Arsene Wenger is largely left to get on with things on the football side. Consistent failure to participate in the Champions League might lead to a re-think about his position, but if Arsenal do finish in the top four this season, there is talk that the manager might be offered a fresh deal, even though his current one has two further years to run. He is a lot more highly valued by Kroenke than he is by a number of the supporters who have grown frustrated with what they perceive as failure on the pitch. The Americans regard him as an asset they have no desire to lose, and will always look at the balance sheets before taking any notice of supporter dissent. If the stadium continues to sell out, protest is effectively meaningless. However, the decision of 4,000 season ticket holders not to renew in the summer of 2011 did take the club by surprise, and will hopefully lead to less complacency in the way the club approach this summer’s player trading activity.

 

 

On the day to day level experienced by supporters at the stadium, things have slowly evolved. The staff that deal with the public have undergone training by the company that prepares the staff for EuroDisney in Paris, which opens up all kinds of opportunities for ‘Mickey Mouse outfit’ comments, although at the time of writing, stewards have yet to don huge black ears. The marketing of Arsenal as a major London tourist attraction is an interesting one. The stadium tours – and I imagine the audio guide that visitors now use instead of being talked through the tour by a guide works in several languages – are now easier for spontaneous attendees as numbers do not have to be limited, which helps the club to market them at tourist information centres and hotels. Yet, the club are partly missing a trick because it is very difficult to cater for visitors’ natural wish to attend a match. With the club’s membership scheme, the Emirates on matchdays is still something of an exclusive party. Still, the difficulty in picking up a ticket also enhances the value of the brand, even if habitual attendees have become cynical about the atmosphere and the number of unused seats.

 

Arsenal need to develop as a business to compete with the group of elite clubs they have managed to become a part of, but they should be wary of taking their eye off the ball. As Manchester United and others have shown, with tangible success in the form of silverware, even greater profits are possible. So perhaps the focus at Arsenal needs to change from the view that third place is a trophy. Whether the Americans really understand the difference between sport in the States and Europe is something that remains to be seen, but the signs are they might not, in which case, they need to learn fast.

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