Premier League Rules Update: 30% Is Not A Trophy

Whether or not Alisher Usmanov has reached the 30 per cent shareholding of Arsenal he’s been after, the Premier League have made it clear in their new rulebook that it won’t entitle him to any privileged information. Their definitions of directors and control of clubs have not changed from last year, but they have inserted a new rule as follows:

A.1.46: For the purposes of Rules H.1 to H.10 [those dealing with the definition and reporting of material transactions and other financial information], a person shall be excluded from the definition of Director set out in Rule A.1.45 if (and only if):

(a) he falls within the said definition of Director solely because Rule A.1.42(b) [ie he's got 30 per cent] applies to him; and

(b) his aggregate interest (of the kind set out in Rule A.1.42(b)) in the shares or other securities conferring voting rights exercisable at general meetings of the Club is less than 50%

Or simply: the Premier League can still call you a Director if you have 30%, even if you’re not on the Board, but they can also say you’re not a Director unless you have 50%, if that suits them better. And if you’re not on the Board you don’t have to sign off the financial reports unless you have 50% of the shares.

So there you go. Usmanov can have his 30 per cent and there’s no prize. Stan doesn’t have to engage with him any more than he does now. Which in some ways is a shame.

PS: To answer a couple of points in the comments, Arsenal don’t currently pay dividends and there is no suggestion thus far from Stan that he is going to change this or siphon off ‘management fees’ of tens or hundreds of millions in the manner of the Glazers. However, if he did want to there is nothing anyone can do to stop him, and Usmanov having 30 per cent doesn’t change that. Stan can use his majority to vote himself any pay rise, dividend (as long as he gives the same to the other shareholders) or fee that he wants. What he can’t do, because it would need a 75 per cent majority vote, is make fundamental changes to the company structure.
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16 thoughts on “Premier League Rules Update: 30% Is Not A Trophy

  1. I’d rather have an owner not taking money out of Arsenal than the promise to put in money but state he wants dividend payout in the same breath.

  2. Perfectly sensible rule. There’s no other business where 30% automatically confers any special rights that aren’t covered in the company’s articles of association. Why should Usmanov be granted any special privileges?

    • You are making the mistake of likening football to ”any other business”.Thats what it is to the hideous Kroenke. Even if the new rules don’t give Usmanov access to the books, his mere presence acts as a check against Kroenke.

      • Why isn’t it like any other business? It sells a product for which it receives revenues? Is has customers and suppliers and every football club (in the UK at least) is formed as corporate entities subject to UK company law and regulation. Why should they be subject to a different commercial law than any other commercial enterprise?

  3. Ths is gr8…. Usmanov excluded? Its beta we’ve a gud team dat spend little dan a gud team dat spend more becos of d financial fair play…

  4. In ‘Good Business’ – its not good to have a dictat or an unchallenged board. There should ALWAYS be detractors, or someone with different ideas to the status quo to challenge and ensure that ALL avenues of thinking are investigated, trialled, evaluated and then the best course of practice chosen as strategy.

    This is NOT the position at arsenal – where, despite all protestations otherwise, the facts are, that our owner and the board have become very wealthy indeed from their investments and thus are clearly against facilitating anything that would mean their wealth gain would be less. A rather short term mindset for a board who claim so vociferously to be thinking of the future.

    As a company, to be always in the black and yet remain in the top 20% of practitioners in their market shows good corporate management to a degree- But, and its a big but, it also shows a worrying lack of ambition to drive the business and thus profit levels forward. If you look at top companies in any field, ie Apple, Samsung and countless others, they spend billions on trying to win the markets they are in. These companies are amazing investment vehicles and are progressive – thus their owners/investors see it as an absolute that the huge spend on R&D and development are necessary precursors to higher growth and profit in the future.

    This is where the Arsenal board are guilty of profligating a poor business model. They bang on about sustainability and financial prudence but this isnt the whole picture- PHW comments on Rangers FC and Malaga are self serving and thus carry little weight.and ignore the basic fundamental of a strong business model- that investment to be a stronger player in the market is a necessary strategum for all companies, no matter size or sector.

    The fundamentals of financial prudence and a sustainable business model are excellent and should definitely be embraced as the way forward for any football team, not just Arsenal. BUT- when there is money for new product development to ensure the future worth of the company, then not to invest it is a serious lack of corporate responsibility. The decision to make do and hope it is enough is not strong business, its actually a proven fail. As a for instance, Sony, who owned the market for personal music players – Walkmans, were guilty of an amazing lack of corporate veracity when they allowed Apple to steal their market with the iPod. Solid state memory (the guts of an iPod) was invented by a chap working for Toshiba and offered to market as a shared technology without patents. Everybody had access to it. Apple spent the necessary R&D budget to win – Sony, in arrogance , did not.

    A strange analogy oerhaps but a true one. Spending just enough to stand still or slightly improve is not strong business and if PHW begs to differ then I would imagine that human nature is more prevalent than corporate best practice. Kroenke and the board are clearly thinking only of themselves here- the business they own is going well and has massively increased in value and the strategy being followed is similar to that of a venture capitalist- build up the value, cut out the costs and move to an exit point (sale). The unfortunate thing for us Arsenal fans is we CARE about the club, crave the success that a necessary investment strategy would be more likely to deliver and dont have time for rich aresholes using our passion to make themselves even richer. Think about that PHW – before you make statements that clearly show that you and the board believe none of the fans are bright enough to understand and not important enough to care about anyway.

    I think that whilst this team is an improvement on before- a calculated investment at this stage, instead of YET ANOTHER profit line- would have yielded the buy in and support from all the real investors – the fans.

  5. With Usmanov 30% holding, at least Kronke won’t be able to do whatever he wishes ie siphon clubs revenue in form of dividends, fees and remunerations as the Glazers have recklessly done at Manure!

    • With more than 50% of the shareholding Usmanov cannot stop Kroenke declaring dividends….but then why would he.

      As for paying fees and remunerations that can’t be justified any shareholder, even with just one share can challenge anything that might be improper or unjustified. It’s the directors that sanctions such payments though – not the shareholders.

    • @james….am aware that Arsenal doesn’t pay dividend, above is just an example of ways to siphon money from a club!

      @Amos…my point is that with 100% control Kronke would be able to do whatever he likes and behind closed doors too, just like the Glazers!

  6. I appreciate the rules of the Premier League, but I find those rules offend my own view of what is moral and ethical. That any man or woman can own 30% of a football club and not have an imput in it’s affairs is to me a microcosm of the immorality/corruption that lays like a poisoned fog over our world. I do not believe Arsenal are any more moral than any other business in the world. Greed and power still infect this club as much as all the other ‘oligarch’ owned clubs. To some degree those clubs are ‘loved’ by their owners mor than ‘Kroenke’ loves this club. How Kroenke is seen as the ‘goodie’ against Usmanov’s ‘baddie’ is mainly motivated by some sort of predudice that Americans are more trustworthy than Uzbekis or Russians.

  7. Phil, would it be possible that the rule is not binding if Usmanov can demonstrate R&W controlled 30% of the shares before the rule came into effect? If the rule comes into effect as of today, and R&W held 30% yesterday, then would it not be reasonable for them to expect what rules existed yesterday to apply now? Alternatively, is there any way R&W could challenge this rule change in a court of law? Kroenke seems very keen not to let Usmanov stick his nose in those books. If we were not such a well run and prudent club you could almost suspect he has something to hide.

    • No, in the PL’s eyes this is not a rule change but a clarification. I’m sure that’s why they’ve added a section rather than rewording the existing rules, even if that leaves it looking a bit contradictory. On the other hand, maybe they’re just lazy and incompetent.

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