The Arsenal Holdings AGM for this year takes place on Thursday October 17, 2013. It’s traditionally held on the third Thursday in October, and since the stadium move has been held in one of the Club Level eating and drinking areas.
As with all Public Limited Companies, Arsenal are obliged to hold an AGM and invite all shareholders, whether they have one share or (as in the case of Mr Kroenke) over 42,000 of them. Shareholders have a legal right to attend; anyone other than shareholders is there at the invitation of Arsenal.
The number of shareholders has dropped quite dramatically over the last few years, with the Uzbek and American billionaires buying shares from both small and large shareholders. Until Stan bought out most of the old Board in 2011, no one had ever owned a majority of Arsenal’s shares, ownership of the club had always been split between a number of different major shareholders as well as hundreds of smaller holdings. Even Henry Norris, the man who moved Arsenal to Islington, deliberately avoided holding a majority of shares, and the Hill-Woods and Bracewell-Smiths who succeeded him were happy to continue that arrangement.
Now, however, with over 97 per cent of the shares in the hands of just two men, the number of small shareholders has dropped to a few hundred. It’s likely that the number of attendees at AGMs would also have dropped from the 300-400 of a few years ago down to something in double figures, but for one extra factor: the Fanshare scheme.
Fanshare was set up by the AST to give Arsenal supporters the chance to own a part of their club at a time when a single share costs around £15,000, making it prohibitively expensive for most ordinary fans to have a stake. Fanshare has around 2,000 members and the scheme owns over 100 shares, making it the third biggest shareholder in Arsenal.
Fanshare is a separate legal entity to the AST, and contrary to what some people believe you are not automatically an AST member by being part of Fanshare. Because Fanshare offers the chance to buy shares it is governed by a lot of rules on offering investments for sale – for this reason it isn’t possible for it to be open to Arsenal fans outside of the UK. AST membership is open to any Arsenal fan anywhere in the world.
Regarding the AGM, for the past couple of years the club has allowed the 2000-odd Fanshare members to have 100 seats at the meeting. This was generous because to begin with Fanshare owned fewer than 100 shares. Since the last AGM the Fanshare total has gone over 100, so this year Arsenal are allowing 104 places, one for each share the scheme holds at the time of the meeting.
I’m not sure whether the club could claim, if they wanted to, that the Fanshare scheme is a single owner so only one person should attend to represent that shareholding, whatever size the holding is. However, I think the club perhaps recognise that with the number of shareholders outside Fanshare having shrunk dramatically, the floor would be pretty empty these days without them. It looks like a more vibrant community if at least a couple of hundred people turn up rather than a couple of dozen, where you can clearly hear every time someone clears his throat.
Any shareholder is entitled to send a representative, or proxy, instead of attending himself. Rather boringly, this is what Mr Usmanov does.
So aside from full shareholders (or their proxies) and Fanshare members, who else is in attendance?
Firstly the Board, who apart from Stan Kroenke now don’t own a single share between them. This non-ownership is unusual and in many ways not particularly desirable, though it’s not legally an issue.
Arsène Wenger also appears on the podium and gives a short speech to the assembled company. As I’ve said before, he can’t lose at these gatherings: when the team is doing well he gets the credit, and if it’s doing badly the Board will get more stick than he does. He’s always the most popular man on the podium.
The only other usual attendees are members of the press. There’s no obligation on Arsenal to let them in, but it’s good to be seen as open and friendly.
Don’t be fooled into thinking that the AGM is held as a benefit to supporters, though, or to provide engagement. It’s held for one reason only: as long as Arsenal is a PLC it must have an AGM for all shareholders. The reason other clubs don’t do the same is not because Arsenal is intrinsically more open to dialogue with fans, it’s because other clubs don’t tend to have the same legal obligations due to their different ownership structures.
And don’t forget the words of Arsenal’s longest serving director last year as he closed a meeting that as Chairman he was legally obliged to oversee and run in a professional manner: “Thank you for your interest in our affairs”. That’s “you” as in the supporters who make the club what it is, and “our” as in the Board who are there to serve.
As with all PLCs, individual Directors on the Board are elected for a three year term, then must seek re-election. This year Stan Kroenke is up for re-election. Obviously Stan has enough votes on his own to re-elect himself and anyone else he chooses, but it might be an interesting meeting if no one else puts their hand up in favour of this motion. Stan better make sure he’s paying attention and raises his hand at the right time, just in case.
I’ll be tweeting live from the AGM on Thursday, so follow for updates: @AngryOfN5