If Stan Kroenke Sells Arsenal, How Much Is His Profit?

A lot of people say to me, ‘Phil, if Stan Kroenke sold his Arsenal shares now how much profit would he make?’ And I’d never worked it out so I’d say, ‘I don’t know, but off the top of my head maybe £300m.’

This was my standard guess for a while, so I thought it was about time I tried to work it out. It’s difficult to be exact because I don’t know how much Stan paid for every share he’s bought, as he spent quite a while buying relatively small numbers on the open market. I know where he started though: he paid ITV £65m for 9.99 per cent of Arsenal plus half of Arsenal Broadband. The split announced for this was £42.3m for the shares and £22.7m for half of Arsenal Broadband, which is slightly odd when you consider these facts:

  • Arsenal Broadband had never (and still hasn’t) made a profit – so why was it apparently worth £45m?
  • 9.99 per cent of Arsenal is about 6,220 shares; £42.3m for 6,220 shares is about £6,800 per share; the going market rate for an Arsenal share at the time was about £8,500.

Is that the smell of dodgy accounting? Can’t be, can it?

So officially that’s £42.3m spent so far, but on market rate it’s about £53m.

After that Stan bought many smallish blocks of shares, anything up to a couple of hundred at a time, at prices ranging from £6,750 to £9,000 each. I can’t account for all of these individually, but I know from various points what his total was at the time and I know the prevailing market price at any time, so I can make reasonable estimates of his expenditure. The ones I can’t easily trace come to only about five per cent of his total purchases.

On the big blocks, he bought 5,000 shares from Danny Fiszman at £8,500, then 2,720 from the Carr family at the same price and a further 2,119 from the Carrs at £10,500.

The biggest purchase was at the time of his general offer, when he bought Danny F’s remaining shares, Lady Nina’s shares and others from small shareholders. These totalled around 22,900 shares at £11,750 each, taking his shareholding from just under 30% to 66.8%. Since then he’s added a few more at prevailing market prices, say an average of £14,000 to make his total holding as at May 2016 41,698 shares, or 67.02 per cent.

Add all this together and my estimate of the Stan’s total expenditure on Arsenal shares is:

£424 million.

Or £435 million if you add in the extra ten or eleven that he would have paid for the shares he got when he got his 50% of Arsenal Broadband, if he’d bought them for market price. I’ll stick with the dodgy official valuation of Arsenal Broadband for the rest of this, though.

So how much would Stan make if he sold up? Well the multi-million dollar question is, how much is someone going to give him? (The other multi-million dollar question is would he sell at all?)

Alisher Usmanov has insisted he’s never paid more than £14,000 per share, so if he paid Stan Kroenke that much, then Stan gets £584m, or a profit of £160m.

Stan has 41,698 shares, so for every thousand pounds his selling price rises, he pockets another £41.7m. Thus his potential profit looks like this:

  • Share price of £14k – Profit £160m
  • £15k – £202m
  • £16k – £243m
  • £17k – £285m
  • £18k – £327m
  • £19k – £369m
  • £20k – £410m

So my standard guess of £300m was actually pretty good in 2012 and 2013, but since then the share price has fallen back to between £15k and £16k. However, current market price is not necessarily a good indicator of what a serious buyer is prepared to pay. As an aside, Forbes have valued Arsenal at $2.017bn in May 2016, about £1.392bn, which would give a share price of £22,368. This is almost 25 per cent higher than it’s ever been and close to 50 per cent higher than the prevailing market price

There are two other factors to take into account when thinking about a potential Kroenke profit. No doubt there will be a few million of miscellaneous expenses, but that won’t affect things too much. Of a bit more concern to Stan will be the dollar/pound exchange rate. In the last seven or eight years it’s varied between $1.39 and $2.06 to the pound, As at May 2016 it’s about $1.45. It could have an effect, but the size is hard to gauge and probably not worth guessing.

Twitter: @AngryOfN5

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20 thoughts on “If Stan Kroenke Sells Arsenal, How Much Is His Profit?

  1. The price he could sell at is very difficult to determine though. The share price has been artificially ramped up due to the Kroenke/ Usmanov fight for ownership. If kroenke pulls out of Arsenal there is only Usmanov as a definite buyer which would depress the price. Obviously a new buyer could come in but with Usmanov already a major player any full purchase of the club would be difficult so this may be less likely.

    To my mind this all adds up to Arsenal shares currently trading at a premium and unless the new sponsorship deals come good then Kroenke is quite possibly sitting on a loss.

  2. Kronke’s cunning plan to take full control of the club, as cheaply as possible was scuppered by Usmanov stake building in the club. The fact that the latter, being a genuine Arsenal fan, intends to keep the shares for very very long time, makes it even more difficult for Kronke to flog his 66% shares at top price to a new investor.
    Usmanov despite his questionable past is a blessing in disguise for the club. Had Kronke got full control of the club than who knows, he might have done the Glazers and plundered the club revenues for years to come in form of annual dividends, fees and remunerations.

  3. Usmanov is in it purely for trading reasons, he has no intention of ever owning the club. He is just posturing on the price: if Stan turned around and offered him money, he’d ask for more than 14K per! 🙂

    Kroenke IMO is probably willing to do a full buyout, but IMO is also still a good bet to sell after 2014.

    They are all bascially speculating based on primarily the new TV contracts and secondarily the batch of Arsenal commercial deals coming due for renegotiation. Once that information is know, the trading opportunities are much less.

    I’d expect a bit more spending on players in the next year, purely to put the club in position to benefit most from these things. Not a crazy amount, but enough to make sure Kroenke secures the upside of this situation.

  4. Good to hear from you Phil ! After the spuds being given a proper eating on Saturday I was looking forward to your musings but you never spoke ! Glad to know you were studying more profound matters though. Knitting teapots hhhmmmmm . Anyway I’m happy for now and eternally optimistic !

      • He has a box or doesnt – who cares. What’s more important is that Arsenal fans cant afford those boxes and cant afford to buy the club. So stop pretending like any of these fats care what you think about the club. They dont. Your easily-opened pockets are the product they haggling over. Your culture or heritage matters not a whit. You are pawns. Its laughable for Arsenal fans to be “taking sides” on this.

      • I didnt bring up the box and aI dont give a fig about it. Who does? You?

        Talk about fiddling while Rome burns…

      • I made a post below (November 22, 2012 at 12:13 pm) which addresses the reality of the situation, but you want to talk about whether tweedledum or tweedledee has a PRIVATE BOX?

        Freakin’ hilarious. Keep fiddling…

    • ziontrain , you are talking rubbish.Usmanov is here for the duration and will wait for the right time and right price to buy.He can afford to sit tight, its all petty cash.When he very soon reaches 30%, although not significant because of the PL rule change he will stop buying shares and might even announce such which will immediately depress the value for any remaining shareholders hoping to cash in.Unlike Kroenke
      who turns up twice a year with a bunch of freeloaders at least Usmanov pays for his box, diamond and club level seats even though he owns effectively nearly a third of the Emirates.All fact not hypothetical rubbish

      • Usmanov is here for the “duration” all right – the duration before he flips his shares for a profit.

        Of course Usmanov doesnt have a box – he is not part of the Arsenal board or management. What do you want me to do – cry for him. I must also disclose to you that I own Apple shares. Does this mean I should go the the nearest Apple store and demand to walk out with free stuff? This is the west, not Uzbekistan – take a hint on how things are done here. (hint:I know you’re a sock puppet poster)

        Save the santa claus stories for kids please. This is a football forum populated by adults. No one is interested in being a fanboy for what are quite obvious corporate raiders.

  5. On performance so far, Kroenke seems none too smart; his business is sports outfits and yet he tells us, hand on heart, that he has never drawn a cent from any of them. I guess his wealthy wife is happy to have him out of the house, playing with his expensive toys, leaving her free to make them a living. He spent £400m+ on Arsenal and still doesn’t own the Club (because of that sob!) ; that can’t be bright, can it?. And (should he wish to cash in), he has alienated the only buyer in town (that sob again!): not too clever either, is it? . But though not, it seems, smart, Stanley IS obstinate; once he gets an idea in his head, he sticks to it, no matter what. What is his big idea? That the backward people over here are only a step away from seeing the light – not democracy this time! – which is that the leagues (PL and CL) should be run like those in the States: to protect the investments of the owners. And with FFP he sees it happening. Along with wage-caps, ‘levelling’ of the playing field, razzamatazz, side-shows, etc – all the things that make sport in US a day out for the whole family rather than a fierce battle for survival. Making everyone (owners and shareholders, that is) a pile of dough. That’s what he wants, and that is what he means to get, come hell or high water. He’s in it for the long haul, god help us!

    • That he is in for the long haul is my biggest fear as well. On the bright side he won’t live forever. I also don’t believe he is as dim as you have suggested. Sooner or later the penny has to drop that AFC fans are a different breed to the type of people who enjoy watching the Colorado Fried Turkeys achieve mediocrity and then accept ,without complaint, that Stan moves the franchise to Omaha,Nebraska.

      Taking the 300 million profit would be the biggest deal Stan has ever done. Surely screwing that amount out of some limey soccerball outfit would even justify buying Ivan an identical wig to the one he wears himself.

      • Some of the pronouncements by Arsenal fans are so out of touch that they are hilarious.

        Sooner or later the penny should drop for Arsenal fans that we have been suckered – not by Kroenke but rather the Dein-Fisman-Hill-Wood-Bracewell generation of owners.

        If you want to talk about American sport, you should understand that they are private businesses. They dont stick the shares up on a public stock exchange for corporate raiders (Kroenke, Usmanov) to run around playing games with.

        And the fans there also dont have any pretence of owning the club, either.

        But somehow English football fans have sat around for decades while their clubs have been commercialized – and they still live in some fantasy world where they think they are supporting their local “works football club”. And they think that some dodgy dealmaker from Ulan Bator or wherever is going to be their rich uncle simply because he desperately wants to fit in.

        Go look at the German Bundesliga where the fans have a stake in the club and there is none of this nonsense. They had the proper defenses to preserve their football culture. English clubs didnt!

        If you really dont grasp what happened you should go find some of the interviews of David Dein over the years. It is very clear that he and his colleagues viewed football as an unfavoured product that needed to be modernized and – monetized. Thus the creation of the “Premiership”. It was not done for your sake as football fans – it was done because a handful of rich people saw community-based organizations that they could make a huge profit on, by selling them off. They did so. With spectacular results. How much is David Dein worth today? And why? Hint: his trade is……trading.

        Time to wake up please. It’s not these current owners who are out of touch – its the fans here in the premiership. The old generation of owners sold you out for a fat return. And in the process they killed what was left of the old world of football. Deal with it.

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