The Good and Bad Legacy of David Dein

By on September 26, 2008
English club needs American billionaire to save it from Russian gangster.

English club needs American billionaire to save it from Russian gangster.

Along with the release of the Financial Report last week, the club also announced that Stan Kroenke had been named a non-Executive Director of Arsenal Holdings plc.  The official press release/letter sent out last Friday to shareholders (not the media) read:

It has been announced today that E. Stanley Kroenke has accepted the Board’s invitation to become a director of Arsenal Holdings PLC (”Arsenal”) as a Non-Executive Director. [...] Mr Kroenke fully supports the approach the Board has taken in setting the direction of the Club. [...]

Mr Kroenke, and any person who has acted in concert with him or any person who is subsequently acting in concert with him, reserves the right to increase his shareholding beyond 29.9% of Arsenal’s issued share capital within twelve months, and to take any other action which would otherwise be precluded under Rule 2.8 of The City Code on Takeovers and Mergers, with the agreement of the Board of Arsenal or following the announcement of an offer or possible offer for Arsenal or if there is a material change of circumstances. Mr. Kroenke is not a party to the lockdown agreement which was signed by the other directors of Arsenal in October 2007.

So what does all this mean?  Well, basically, that the club sees Kroenke as its safeguard against a Red & White Holdings takeover.  It means that Kroenke could attempt to acquire the necessary 30% of shares “with the agreement of the Board of Arsenal”.  When one shareholder reaches 30% they are required by law to launch a takeover bid.  If the Board do not agree to the takeover, then it becomes a “hostile takeover” and the shareholder must then try to acquire the necessary amount of shares to hold a majority.  The Board or shareholders can refuse to sell their shares and the “hostile takeover” would fail.

What the statement above is saying is that Kroenke can do this “following the announcement of an offer or possible offer for Arsenal or if there is a material change of circumstances”, i.e. if Usmanov gains or looks likely to gain 30% of shares himself and launch a “hostile takeover”.  This would give Kroenke the permission (and support) of the Board to attempt a takeover as well in the hopes that shareholders who are keen to sell would rather sell their shares to the Board-approved Kroenke rather than the Russian gangster.

And we can all thank our good friend, David Dein, for the current state of affairs.  A little background: Dein brought in Kroenke in the hopes that he would buy or takeover the club and install him as Chairman.  The Board rightly dismissed Dein as his intentions became clear and he openly defied the board.  Then, when it became apparent that Kroenke had no interest in buying the club outright or attempting a hostile takeover, Dein was forced to go find another sugar daddy in his attempt to gain power at the club.  His desperation for power led him to an “alliance” with Alisher Usmanov, a shady Russian gangster/billionaire who has spent time in jail.  Usmanov, knowing Dein’s weakness (his desire for power), “convinced” Dein to sell him all the shares he still held in Arsenal for 75m pounds.

Following the sale, Dein was named Chairman of Red & White Holdings.  The deal was obvious: Usmanov would name Dein Chairman of Arsenal when he took over if Dein would sell him his shares.  Dein sold the club out in a bid for personal power.  This is not a man who “cares about the club.”  Now over a year later, Usmanov realized what a polarizing figure Dein is, not only among the Board members but also the supporters, and he was relieved of his chairmanship at Red & White.  It now appears that Usmanov has softened on his desire to control the club, as reported by The Guardian last week.  However, we’ve seen pieces like this by “friendly” journalists before.  The article reads:

Alisher Usmanov will step aside and allow Stan Kroenke to take over Arsenal without a fight once the current shareholder-directors decide to sell up.  Both suspect that Danny Fiszman, the most powerful individual on the Arsenal board, is setting up an auction for the day when he cashes in on his 24.11% stake. But Usmanov would prefer to be a sleeping investor rather than fight Kroenke for the club. Kroenke’s relationship with the Arsenal board is clearly better developed than Usmanov’s, as evidenced by the American’s co-option as a director last Friday.

This could be the reason for Dein’s dismissal or it could be a maneuver on Usmanov’s part.  With Fiszman controlling more than enough shares to set either Kroenke or Usmanov over the 29.9% threshold, his actions in the near future become crucial.  Fiszman hasn’t made any public statements or shown any signs that he is looking to sell his interest in Arsenal Holdings plc, but that could change when the lockdown agreement expires in October 2011.  Either way, not too long from now, the entire future of the club will hang in the balance.

In this way, Dein is still shamefully affecting the club in adverse ways even after he has left Arsenal, and now Red & White, as the club hopes to use the first billionaire sugar-daddy he brought in who turned out only to be a smart businessman looking to make a smart investment, against Dein’s second billionaire sugar-daddy who  turned out to be an ex-con gangster who swindled him out of his shares and then dumped him by the side of the road.  These are two very disturbing miscalculations by Dein and prove just how much his desire for ultimate control of Arsenal distorted his judgment and the lengths he was willing to go to achieving his own personal goal at the expense of the club, its tradition, and its supporters.

Undeniably, the man did some good while he was with the club (and some bad – remember Champions League matches at Wembley?), but his hunger to be the “top dog” at Arsenal led him to do the absolute worst thing he could once he left.  Dein deserves what he gets for his betrayal, but Arsenal Football Club and its loyal supporters certainly don’t.



  1. Alex

    September 26, 2008 at 10:03 am

    Let’s face facts. Ever since Roman Abramovich bought CFC the landscape changed. Now, there are more clubs than ever with wealthy backers who could buy their way into the top four. Dein saw that and didn’t want to be left behind.
    In the 80’s we were forced to make a decision under the reigns of George Graham. Do we win trophies or do we want to be like Spurs and play beautiful football? I and every other Gooner I know opted for the trophies and there began our assent back up the pecking order of the football elite.
    I love the way we play football but IT CAN NOT COME AT THE EXPENSE OF SUCCESS.
    The very future of Arsenal hangs in the balance as this new stadium has exposed us to a property risk beyond imagination. Our conservative tradition was thrown out the window when we built the Emirates and became a property company. Arsenal could now be in serious financial difficulties if we don’t have a wealthy benefactor.
    Here is why – Our largest component of turnover comes from match day income (£94m) from a pretty much sold out stadium for 28 weeks of the year.
    Now with this credit crunch, Arsenal are going to struggle to sell all that corporate hospitality and many fans are downsizing from the £4000 club level to regular season tickets. Do you really think the match day income is going to continue to rise? (It only rose £4m from 2007-2008 in a booming economy)
    I don’t think so. Not in this market.
    In 2007/2008 AFC made £36.7m and have over £318m of debt. Of that debt, £133m has been used to fund the development of Highbury square.
    We are in the middle of the worst credit crunch most people have ever seen and all those who have put a deposit on properties at Highbury Square have had to think long and hard about following up their investment. Some will, but I am sure some have already tried to get mortgages and were refused, and I am sure others have let their deposit go as they don’t believe the property will increase in value as much as we have seen in the last few years.
    Then add on the fact that we don’t have money or will to buy our way into Champions League like the other clubs. The losses from TV revenues would be well over £10m! Then factor even greater defection from the prawn sandwich brigade who only want to see a winning team and we could quickly become a mid-table team struggling to pay back the interest on our debts.
    So, I ask you. Would you prefer to have a billionaire owning the club who could buy his way out of trouble and Dein as Chairman overseeing the football or keep a broke drunk like Hill-wood and a Tax Exile like Fiszman in charge? I want to see trophies and Champions League football. Dein saw that the team were falling behind and wanted Arsenal to win. If you are telling me Fiszman is more of a Gooner than Dein I will call you a liar. David Dein has done more for this club than any other director on the board and I personally would welcome him back to Arsenal with open arms.

    • P'TangYangKipperBang

      October 3, 2009 at 11:35 am

      You’re wrong in my opinion. I wholeheartedly agree with the article above. DD did indeed do some good for our club but he was always a sheister. There is a certain slime about him. Selling out to the Russian really showed his colours in my opinion. The records released show clearly red & whites motives, I refer to the PR campaign they embarked on (the radio interview had David Dein slime all over it). Thay tried to make out the club was in trouble financially and put forward a suggestion to do something with shares. Turns out we are not short of money at all and their proposed manoevre would have weakened the current board helping to allow a takeover/power swing towards the Rusky. They lie, cheat and we must NEVER trust these people. DD was Arsenal but has well and truly lost it and turned into a malignant cancer trying to attach itself to our beautiful and admirable club.

  2. Arsenal Station

    September 26, 2008 at 11:14 am

    1) Arsenal are nowhere near “serious financial difficulties” even if match day revenue holds. I never said I expected match day revenue to keep rising but I would hardly expect it to be lowered. And even if fans are trying to downgrade their season tickets, there are more than enough red-level members on the waiting list to take those tickets.

    2) The property development downturn will in no way take Arsenal from financial independence to needing a wealthy benefactor. Our debt is covered by stadium revenue (not only matchday revenue). And the property market is cyclical so it will pick up again.

    3) You say we don’t have the “money or will to buy our way into the Champions League like other clubs.” We don’t need to “buy our way in” because we are already in. In fact, only one other club in Europe has been as consistent a Champions League entrant in the last 10 years. If you want to place your view of our financial precariousness on contingencies such as if we don’t qualify for the Champions League or if the praw sandwich brigade desert the club then that’s not making much of an argument on our current situation.

    4) I never said Fiszman was more of a Gooner than Dein. Let’s not argue about things I didn’t even say. But how you can consider Dein a Gooner when he sold off all his shares in the club in power-hungry desperation, I have no idea.

    5) The stadium was a last ditch bid at saving our conservatism by insulating us from the fate of clubs like Chelsea and Man City. Do you think the Arabs or even Abramovich will keep paying 100s of millions of pounds for the rest of their lives and seeing nothing in return? They will bow out on their clubs eventually and when they do it will mean financial ruin ten times worse than anything Arsenal could ever expect from their stadium debt.

  3. Michael Tim

    February 28, 2009 at 1:28 pm

    I love your site!

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  4. Mamutikaram

    July 19, 2012 at 11:54 am

    You are a muppet, look at Kroenke and his other clubs that he owns, you will see how succesful they are, he is only intressted in a profit not in throphies, wtf does an american know about football? For the love of ur moms clamburger, they call it SOCCER back to the cave you crawled out of you muppet that dont know anything about the game nor what is best for the Arsenal!!!”

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