Stan Kroenke doesn’t do method acting, he prefers to remain silent. So we have to guess what his motives are with regard to Arsenal. I think it’s a basic choice of two: make a quick buck (well, a few hundred million) and get out, or gradually earn back the money invested over a period of several years if not longer, and have a very valuable asset at the end of it.
Alisher Usmanov’s motives appear different. He’s not a collector of sports clubs like Stan, and he certainly doesn’t need to use Arsenal to make money, which is inevitably going to be a relatively slow process. For him it’s probably more about prestige, and wanting a new toy. There may also be elements of integrating himself into English ‘society’, for want of a better word, or having a completely clean asset worth enough to retire on that no one in Russia can easily get their hands on if everything in Oligarchland goes tits up at some point. If it were someone less honest than Mr Usmanov, or with less Rottweiller-like lawyers, an owner of Arsenal might conceivably be trying to launder money gained elsewhere by using Arsenal as a giant currency washing machine, but no one is doing that are they. I must assure any legal people reading this that my John Terry sarcasm button is firmly in the off position and will remain so until further notice.
But Stan is in the driving seat at the moment anyway, so let’s concentrate on his motives for a minute. This came to mind as a result of a comment on yesterday’s post by ‘Englandsbest’, who reckons that Stan expected Usmanov to sell up last year and leave him in peace, and now Stan is stuck because he can’t sell to anyone else with Usmanov hanging around like a bad smell (legal note: it’s just an expression and is in no way indicative of odours emanating from any Arsenal shareholder). This assumes of course that Stan wants to sell. Personally I don’t think he does. As another commenter pointed out, Stan is in control of Arsenal with his 67%, and it doesn’t really matter if Usmanov has 29%, or even 49%, of the shares, because he can’t do anything to harm Stan until he gets to 50% plus one share. So Kroenke can decide how and when to take money out. If he pays a dividend he’ll have to give some of it to Usmanov – so he probably won’t – but there are plenty of other ways of siphoning money out if and when he decides to.He just has to look at the Glazers and their £100m+ management fees for inspiration.
Will Stan be able to find another buyer with Usmanov in play? I think he probably could, as long as he demonstrates that Usmanov is nothing more than an irritating irrelevance, a bit of background noise. That would mean running a good efficient operation for a couple of years while steadfastly ignoring Usmanov and expecting Wenger to keep producing the goods on the pitch long enough to maintain the value of the company.
Where I think Stan may have miscalculated slightly is in maintaining the value of his biggest asset, viz Arsenal FC. No doubt he could see that Arsenal had done pretty well without additional investment over the years, particularly since the late 1980s, even building a new stadium on manageable terms. But the more Sheikhs and Oligarchs there are entering the game, the more the chance of having to put in some cash to keep up – or finding yourself one place lower each time a new billionaire turns up. And Arsenal have had two very successful managers since the 1980s – it may not be easy to find a third who will win so many trophies.
This wouldn’t matter in America, where relegation doesn’t exist, there are spending caps in place and if you’re rubbish one year you get first pick of all the best young talent the next year. In the Premier League, if you’re rubbish one year you just increase the chance you’ll be rubbish the next year, if you’re not actually chucked out immediately.
For what it’s worth I don’t think Stan intends selling. But it’s possible a situation will arise where he needs to pump in money to maintain value. Then again, he bought half his shares at around the £8,000 mark, so he’s got a fair cushion built up on current prices before he’s in danger of losing money. That doesn’t particularly bode well for encouraging him to spend – not until Arsenal have drifted quite a long way down the table. Happy days.
Agree? Disagree? Leave a comment or tweet me on @AngryOfN5
angryofislington 
One question on this. If Stan does intend selling, why wouldn’t he just sell to Usmanov?
I imagine in the world of high finance, grudges are not held when there is a buck to be made. I think if Kroenke did intend to sell, then Usmanov’s money would be the same as anyone else’s to him.
But I agree, the blight that is Kroenke has no intention of going anywhere. He is here to drain the will to live out of all Arsenal fans for years to come.
He must be getting something back for his investment in Arsenal. Perhaps he’s squeezing Usmanov out of everything including a seat and view of the financials until he offers the right price for the whole ownership of Arsenal.
He is. His asset (Arsenal) is increasing in value rapidly and will continue to do so in the long term by all projections of international broadcast rights etc., and all the commercial and brand opportunities, as well as anything he can do regarding real estate investments (his original forte). Unless he needs to sell for other reasons, Arsenal will be the crown jewel of KSE. At some stage in the future, he will hope to find a way to take some profit out of the club when sanity has returned to Football club ownership but (hopefully) he’s too smart a business man to think that pulling money out, for the foreseeable, would do anything but drop his club, his manager, his CEO in a whole world of pain, and would actually then force Stan to get involved in the club, God forbid, to extricate it from the ensuing mess.
Sports club ownership is mostly about ego. To over-generalize, it’s the ultimate male fantasy — to be the owner of your “favorite” sports team. SK is not going anywhere — he is a professional sports team owner, and his family company now owns the Colorado Avalanche, Colorado Rapids, St. Louis Rams and Denver Nuggets. He attempted to buy the LA Dodgers, which would have been the crown jewel of his American sports franchises. He buys teams, holds them and stays in the background.
I have no doubt whatsoever that SK intends to keep his Arsenal holdings for his family to hold onto for generations. It’s not such a bad thing to be the majority owner of one of the most valuable sports franchises in the world. His intention is almost certainly to hold onto it unless he is forced to sell — this could result from (1) horrendous family financial management (highly unlikely), resulting in SK needing to generate liquidity or from (2) overwhelming public/fan sentiment against him. He doesn’t need or want to sell to Usmanov (but may do so if either of the previous two reasons forces his hand). I doubt SK will take dividends from the club, and he will certainly not invest any additional funds into the club. He intends to hold on and continue taking a very hands-off approach to management. If and when he passes the reins on to his children, they may have different ideas regarding how active to be.
As an American, I’d like to at least see a preseason friendly in the US between the Rapids and Arsenal — seems a logical win-win for Kroenke. Hope it happens next summer.
Kroenke has invested a fair few hundred million in Arsenal most of which (if not all) is borrowed. He is nt getting any dividend or huge fees from the club so is having to pay a large annual interst bill. He needs Arsenal to grow by upwards of 5% annually in order to stand still. I think he will sell out after the shirt and other commercial deals are renegotiated up in 2014. Then he will be showing any buyers the full value of the club.
It is my understanding that Stan did not purchase his ownership through debt:
“guaranteed that no part of the purchase will be financed by bank loans or other debts.” So he doesn’t need to finance his debt in the short term and will be happy to let the club’s value accumulate for the very long term.
Have a look at the offering document on Arsenal’s website: http://www.arsenal.com/assets/_files/documents/may_11/gun__1304684364_Offer_Document.pdf
KSE does have an arrangement with Deutsche Bank, but importantly, unlike the Glazer’s leveraged takeover of United, this was not a takeover that saddled the club itself with debt. The debt is instead at the holding company level. Said another way, Arsenal is not responsible for the interest payments, but KSE is.
NYCGooner. I understood that he took out the Deutsche Bank financing as a bridging loan, which was a condition placed on him to complete the deal, I was told. Bottom line is he does not have a loan directly tied to Arsenal and he is not loading the loan or its interest payments on the club.
Excellent post. Best job I’ve seen to rationalize the motives. I’m convinced Stan is in it for the longggggg haul. But, the really interesting question as you said is whether Stan will put his hand in his pocket (other than the original purchase while not loading the club with any debt or interest payments – which is no small matter for the non-Oligarch owners) if/when 4th place is threatened
Looks like your curiosity is about to be satisfied…
Stan might have thought at the outset that he would be in for the long term but the way football is developing I don’t see how its possible to maintain Arsenal’s status without significant investment. I’ll be placing a tenner on him selling in the next three years.
At the moment Ivan is telling Stan what he wants to hear, that FFP will level the playing field back up again so that Stan’s business model will start to work, but I reckon FFP is already dead. The oligarch/sheikh-owned clubs together with the Spanish giants will simply form their own superleague if UEFA attempts to stop them. And if Man City’s Etihad deal is anything to go by, exhorbitant self-made sponsorships are legal, so maybe the FFP should be renamed FUP.
There is nothing in Stan’s history to suggest he will subsidise a club’s operating costs so at some point he is going to have to sell or see his investment plummet in value as we slip down the league season-by-season.
Thanks for a brave attempt to fathom out exactly why the Silent One spent a fortune to become majority owner of Arsenal. As someone once said ‘the very rich are not like the rest of us’, so their motives are sometimes inscrutable and can only be guessed at. The replies cover just about every shade of opinion as to what Stan’s might be. The view of the American fan – that he might be looking at his acquisition as a family heirloom – has an awful ring of truth in it. Which means that the presumption he is a businessman looking for a profit may be way off-beam. I mean, Her Majesty is not renting out rooms at Buckingham Palace, is she? My own view is that he is not very bright (nor very sexy) and his super-rich wife encourages him to buy himself toys in faraway places to keep him out of the house.
Kroneke takes £25,000 a week in a wage. What he does for that money I’m not quite sure. He also had to borrow all the money to buy the shares in the first place from Deutch Bank. So he can’t afford in the first place and he pays himself a wage for doing nothing, and he gives the manager scrapes to build a team with and he takes no interest in the club at all. Some people defend this guy? Kroneke has to go and if he doesn’t them Europa League qualification will be a like a trophy and then AFC fans really will loose the will to live.
http://www.petitionbuzz.com/petitions/savearsenalfc
Please sign this petition to get the worst owner in rsenal history out. Usmanov will invest in the club in a sustanable manner and has already realeased a statment outlining exactly what he would. Oh yeah and he actually bothers to watch matches and take an interest.
Stan Kroenke as majority shareholder/owner of AFC takes £25,000 per year (not per week), which is pretty modest. He did not borrow the money from Deutsche Bank to buy his shares. David Dean was sacked by the board for trying to bring in Stan Kroenke behind their backs. Otherwise you seem to have a good grasp of the situation as indicated by the less than 1000 people who have signed up to your pathetic petition.