Stan Kroenke is the first ever majority owner in Arsenal’s history, and very soon will probably be the first 100% owner.
He paid around £425m to buy 67% of the club in a number of different purchases, and has now agreed a deal with Alisher Usmanov for the Uzbek’s 30.04%, which is 18,695 shares.
That deal is for £550m – billionaires like nice round numbers to work with in deals. However, it means that each of Usmanov’s shares is valued at £29,419.63 and one tenth of a penny. Legally Kroenke can’t offer other shareholders less than he’s paying Usmanov, so the remaining 600-odd shareholders who hold about 1,800 shares between them are being offered £29,419.64 per share. That extra nine-tenths of a penny is all the compensation we’re likely to get from Kroenke.
So Kroenke has now paid around £975m for Arsenal shares. If the remaining shareholders all sell to him, either voluntarily or through compulsory purchase at £29,419.64, he will be paying a further £52.4m, taking his total spending to £1,027m. I’ll leave aside the cost of the loan to buy Usmanov’s shares (and indeed earlier tranches of shares from former directors) and the implications of that being loaded onto Arsenal.
So just over a billion paid out by Kroenke on share purchases. How is he going to make his money back? So far he’s taken two payments of £3m each out for a list of undisclosed ‘advisory services’.The club’s explanation for this was absurd and embarrassing. Ivan Gazidis and Sir Chips Keswick made contradictory statements at the same club AGM about whether there was a contract in place for these ‘services’, and no one ever managed to name a single service given or what benefit it gave to Arsenal. You’d have to be totally naive to believe the whole exercise was anything other than Kroenke testing the water on removing money from the club. The ensuing attention meant he stopped after two years. Get ready for those payments to restart – the difference this time being he doesn’t need to send his stooges to the front of the stage and offer fake explanations for spurious unnamed ‘services’.
Arsenal haven’t paid dvidends on shares since the early 1970s. In those days dividends on football club shares were limited by League rules that allowed a maximum payment of 5p in the pound on the issued share price. Arsenal at that time had around 6,000 £1 shares issued, so the most that could be paid out in dividends was around £300 a year. Not a fortune even in the 1970s. This changed when clubs set up holding companies that allowed them to bypass ownership regulations, so now there’s no limit on what Kroenke can take from Arsenal Holdings PLC. Until now if he’d taken dividends he’d have had to give 30% to Usmanov, plus a small amount to the other shareholders, but now it will all be his.
Maybe you think it makes no difference if Arsenal have only one shareholder. Maybe you even think it’s a good thing, and Stan or Josh Kroenke will be keen to invest for success now that they have full control. I’ll bet you a pound to a penny they won’t be investing any of their own money, and will start taking money out regardless of success or failure on the pitch. Whatever else you think, that is not going to increase the chances of the team doing well.