There is only one big issue today, the news that Arsenal Football Club is now effectively owned by Stan Kroenke. I say this rather tongue in cheek, in that until all the shares are owned by Mr Kroenke, this is more a question of voting rights with the effective control of the club that is conferred upon Stan Kroenke by virtue of this shareholding.
THE BIG ISSUE
Kroenke’s recent share move removes all doubt about his intentions it is now not if but when? but who will be his financial backer if we are not to be plunged into a massive debt scenario? 29.9% is 0.1% shy of the obligatory threshold that you all know about now. The failure to pay for his purchases with outright cash is a worrying trend. The bold statement that a takeover is not imminent may signal that Kroenke will pause whilst he obtains the means to fund the several hundred millions required to buy the major shareholding that is Arsenal football club. If our debt increases Glazer style then I will be opposed to our Silent Stan. The stakes are too high and we have suffered too much pain on the journey to this point to give our club away lightly. But how Kroenke raises the capital will be interesting as the stadium cannot be used in any leveraged buy out. It is already subject to a major loan from the banks. If Kroenke moves to acquire the final 0.1% but does not exercise his right to make a takeover bid, then other parties could then step in and exercise their options within this market, with Kroenke being prevented from joining in for 12 months.
In its strongest statement yet the Arsenal Supporters Trust issued a warning salvo to silent Stan to remind him that despite being on the board, he will not get things his own way if he launches a Glazer style takeover. But Stan is not a man who is going to be deflected by other parties. I warned many months ago that his track record is that he likes owning franchises. He is used to being part owner as in his stake in the St Louis Rams, so the AST’s plurality custodianship model is safe for the time being. The timing of the takeover now seems dependent on Stan’s intentions over the pond. The lack of a takeover being imminent only holds as long as Alisher Usmanov has abandoned any aspirations of taking over the club. The ball is now in Usmanov’s camp and how he will respond to the events will be the subject of sweaty palms in some quarters. How will Lady Nina react to the prospect of other shareholders cashing in at her expense?
If an all out war breaks out between Usmanov and the Board resulting in an eventual takeover, then it is not just the debt that we are likely to lose if Stan fails in maintaining the status quo. “We lose the whole damn ball game!” to use an Americanism. The ball game being, Arsene Wenger and his protégés. The scouting network put in place by Arsene Wenger is alone worth its weight in gold. The constant finding of youth talent is what has allowed us to punch above our weight in the league. Yet the noises coming from Arsene Wenger suggest that he might well be at ease with Kroenke’s takeover strategy and his acceptance of the self sustaining model of financing Arsenal Football Club. The two men must have spoken, and we as fans can draw our reassurance from the Frenchman’s contentment. The acid test will be when Arsene Wenger renews his current contract. If he does so then that trust In Arsene Wenger will pass to Silent Stan. If he does not, then cue the beginning of massed opposition.
The sale of Peter Hill-Wood shares to Kroenke is allowed but the implication of the Chairman selling to a major shareholder on the Board in distinct opposition to the other large shareholder Usmanov may have been unwise. The takeover panel is keeping a close watch on any suggestion that Board members are acting in concert against the Usmanov camp. the reasoning being, that if without a vote of shareholders their actions are tantamount to discriminating against the interests of another shareholder, then action could be taken against the parties. The legal powers of the takeover panel are potentially wide ranging but these rulings have to be enforced through the courts via the FSA. Stan Kroenke is 71 shares away from being in overall control of Arsenal Football Club. This figure is irrelevant as Kroenke is effectively in control anyway unless Usmanov raises his shareholding to above that held by Stan Kroenke which seems unlikely at the moment.
So is this a strategy to flush out Usmanov? or does the new owner of Arsenal Football Club (de facto Kroenke) wish to sit on his hands until the moment to acquire those 71 shares dovetail with any future sale of his stake in the St Louis Rams which would raise the capital necessary to own the club outright? Or is this an ingenious way of ensuring that Arsenal maintains the plurality of ownership without a takeover? Usmanov may seek a review of the takeover panel’s decision not to deem the share movements between Kroenke and other board members as acting in concert against other shareholders. What is clear now, Stan Kroenke is in overall control of Arsenal Football Club as it unlikely that the rest of the Board, and Usmanov plus the small shareholders could be gathered together to vote him down.
Being a Board member means that providing there is consensus, Stan Kroenke’s views about the club and the impact on the day to day running are likely to dovetail thus maintaining the status quo. If you are a cynic then Arsenal fans may have to worry about is what strategic direction for the club may have already been agreed in principle by the Board. (such as the paying of share dividends for instance?) Kroenke’s views will not be ignored and providing there is harmony between the members, they is nothing that even the influential Arsenal Supporters Trust can do if Kroenke chooses to ignore them. The AST may huff and puff, but from where I am looking Kroenke’s house is made of solid bricks. Where Arsenal fans can be reassured is if Kroenke does not buy those additional 71 shares for another 12 months, by which time the share price will have fallen below the dizzy heights of £8,500, thus making any Usmanov takeover a loss leader, a lower overall cost form Kroenke with the prospect of some funds being made available for AW. Until then these recent movements are just the game of poker being played by very rich people without a single extra penny going into the club.
So what of the club now in the new Kroenke dynasty? Will that mean more money for players? Recall the rumour that Kroenke allegedly offered some funds to PHW and Keith Edelman during a meeting in New York which was turned down, a claim denied by the parties concerned. Americans like to own things with other people’s money, and if the overall worth of this asset can be increased without Kroenke having to find £500 million then everyone will be happy. If the Board model remains and Arsenal does not become the private asset of Stan Kroenke then no extra funds will flow into the club until the existing debts are paid off. So in effect the club will have been taken over without any benefit flowing to the playing arm of the club. but Arsene Wenger is in support of this strategy and as long as his youngsters win something this season, there is no good reason to change course. Mr Kroenke will benefit from the revenues flowing into the media/franchise links with the club. So expect to see Arsenal going to the USA and the far East pre-season against all that has previously been stated by AW.
ARSENE QUOTE OF THE WEEK
“Certainly it’s significant that the chairman has sold him 100 shares. But basically I don’t make a lot of that because the situation remains as it was before. Without any doubt he is interested in football and Arsenal. As to what his ambitions and goals are, I do not know. A takeover can have both a positive and a negative influence, that is the same with every owner. It is certainly not inevitable. He is at 29.9 per cent, so he is not yet in a position where he has to make a bid, so the situation at the club does not change.”
Very diplomatic Arsene, read into that comment what you want, but I take the view that Arsene does not feel threatened by these developments.
PERFORMANCE OF THE WEEK
The more games that I see the more I am becoming converted to the belief held firm by Le Boss. We are going to be very close to winning the Premier League Title this season. For this to happen, there has to be regular consistent performances by the group of players which signals that we have learnt our lessons and we are ready to deliver. The performance against AZ Alkmaar was a case in point. These are the reasons why this team has made amazing progress.
Centre Back pairings solid.
Last season we could not call upon the same two centre backs for three games in a row. This season the solid performances of Vermaelen and Gallas who seem to enjoy playing together, has meant that most threats posed by opposition forwards have been dealt with in an authoritative manner. Set piece defending has been improved beyond that which I thought could be achieved from last season’s inconsistency. There has been a lot of work on the training ground and the results are integral to our success.
Defending when we lose possession.
We now see the attackers putting in more tackles to try and regain possession, thus making the midfield load less onerous. Last night Arshavin played a high position, but when the ball was conceded, this time he tracked back into midfield and enabled us to put pressure on the ball. This team approach was also lacking last season when, attacking midfielders and strikers seemed to leave it to others to regain the ball that they had lost.
Alex Song – A revelation.
Alexandre Song will be sorely missed when he goes to the African Cup of Nations. Someone must be recruited to provide the effort and skills that he has provided this season. He is focused and his fitness levels have improved. There is now NO NEED to buy a defensive holding midfielder. His current ability to block, harass and deliver efficient passes is providing what we need at the moment
The Arshavin effect.
In Andrey Arshavin we have a world class match winner. His assists during the Champions League will remind those of you who seem to think that because he does not score four goals every game, somehow Arshavin is below par this season. He may not be scoring at the moment, but his contributions are intelligent and efficient. mark my words, he is the player that can produce a match winning moment in the future when we most need it, so keep the faith eh…
We will be number ONE after Xmas.
If we maintain the current rate of goal scoring, and providing injuries are kept at bay, then there is every reason to expect that Arsenal will be in first place in the Premier League after the Christmas fixtures. I am assuming that we will draw with Chelsea at home and that they will have at least two draws en route, one of which will be this weekend against Man United. YOU HEARD IT HERE FIRST!!! However will we have the squad to take us through to the end of the season? That depends very much on our buying intentions in the January transfer window. We need a keeper surely?
THE FRIDAY FINGER
Non Arsenal today, I will wave my finger at the Premier league Chairman of Bolton FC who has tabled a proposal that Celtic and Rangers join a two tier Premier league. More teams in the league means less money divided out between the existing 20 clubs. I cannot see a massive hike in broadcasting revenues flowing into the Premier league as a result of this proposed move. In my view it will mean less money for the big clubs essentially, i.e Arsenal included.
I hope that you enjoyed this rather long and limited TGIF, but it is not every day that we are taken over…NOT! (ala Borat)