The Intentions of Stan Kroenke

By on November 10, 2009

Stan Kroenke and Peter Hill-WoodLast week, Stan Kroenke increased his stake in the club 29.9% and I’d like to speculate, along with others,  on what that will likely mean for the future of the club we all love. Mostly, I’d like to respond to an article by David Tully that was posted on Football FanCast this past week. Sadly, fear-mongering has been a great feature of this struggle for controlling interest in the club initiated by David Dein in the wake of his exit from the club. Arsenal Station has already covered the dynamics of the original squabble and subsequent developments, but with Kroenke only 0.1% away from launching a required takeover bid, the plot has thickened even further.

In Tully’s article, he writes:

Only a few Arsenal fans, if any, would argue that a takeover by Stan Kroenke would be beneficial to the club, that he would spend a greater deal more on players than the current board and bring the trophies back to the Emirates.

My issue here is that a takeover or new owner does not need to spend more money on players to be “beneficial to the club.” Even if Kroenke made more money available, it is clear that Arsene would not all of a sudden change his philosophy and go on a Middle Eastern-style spending spree. What could be beneficial is that stability in the board room would return and, most importantly, the prospect of an Usmanov takeover will be over. There is no doubt in my mind that an Usmanov takeover is the worst thing that could happen to the club.

Tully also wrote:

Both Kroenke and Usmanov have been used as pawns in a bitter power struggle within the Emirates, but one of them, Kroenke, to the surprise of both Fiszmann and Hill-Wood, will soon be in the position to buy the entire club under their noses. Up until this point it has been assumed that Kroenke did not have the finances to buy Arsenal at the £375m it has been valued at, but with the sale of the NFL franchise St Louis Rams which it holds a majority stake in, he will be able to buy the club out. As with both the Glazer family and the Gillet-Hicks partnership, the large assets that Kroenke owns, such as the Denver Nuggets, will allow him to borrow the required amount to buy and put the debt on the club.

Stan KroenkeYou can hardly say that David Dein, in his struggle with the Board, has used Usmanov as a pawn. In fact, it would be the other way around considering that Dein was relieved of his duties at Red & White once he had sold his shares to Usmanov and it became clear that his relationship with the Board was holding Usmanov back. So, while there may have been a power struggle between Dein and the Board two years ago, once his relationship with Usmanov soured, the whole dynamic of the affair changed.

Second, Tully seems to think that Fiszman and Hill-Wood are now “surprised” that Kroenke is almost in a position to launch a takeover bid. That makes no sense. Hill-Wood just sold Kroenke shares to help him get to 29.9%. Once the club decided that Kroenke was the lesser of two evils, I believe they became resigned to helping him secure the necessary 30% before Usmanov. Kroenke has been, in effect, an insurance policy against an Usmanov takeover. For a more in-depth analysis of this statement, see my pieces on Dein and Usmanov from last year.

Rob Shepherd, in a News of the World piece entitled, “Arsene Wenger In Arsenal Quit Threat Over Takeover,” writes:

I understand Wenger has made it plain to the Gunners board he will not work under Usmanov and would move to Real Madrid instead.

And that is one of the reasons behind Stan Kroenke’s stealthy takeover at the Emirates. The American billionaire has taken his stake in the club to just less than the 30 per cent needed to spark a takeover bid, leaving Usmanov puzzled at his motives.

However, senior Arsenal sources believe Kroenke’s attempt to push Usmanov out of the picture is to help protect Wenger’s position.

While I highly doubt Wenger has given the Board an ultimatum about going to Madrid (he could simply not spend the money that Usmanov would supposedly make available), it at least seems that Shepherd has the dynamic right. A takeover became inevitable and the Board asserted themselves the best they could in that situation by choosing which suitor seemed the least threat and then enabling him in a bid to stonewall the bigger threat.

Tully ends his article with this:

Kroenke cannot win for the sake of Arsenal’s future. He would saddle the club with an enormous debt which has burdened both Liverpool and Manchester United and squeeze the club for greater profit to reduce the debt’s size. A message to the Arsenal board: learn from the mistakes of other clubs, don’t allow your petty rivalries to allow an outsider in through the back door, think of the club first.

This is fear-mongering in the extreme. There is absolutely no reason to believe that Kroenke would do what the Glazers and Gillett Stan Kroenkeand Hicks have done at United and Liverpool in saddling those clubs with the debt they incurred to buy the club. Firstly, Kroenke doesn’t need to buy the entire club outright to assume control, he only needs a majority interest. Second, unlike Usmanov, Kroenke has never called for Arsenal to begin paying dividends to its shareholders. Dein is out of the picture and what is going on is not a rivalry between him and the Board. It is a rivalry between the Board, with Kroenke, and Usmanov.

Kroenke’s quietude at the AGM has aroused suspicion, however. The laws do not allow potential buyers of a club to make ambiguous public statements, otherwise they could be barred from buying the club for six months. This is obviously why Kroenke was careful not to say anything regarding his share buying or his intentions. If he did and was sanctioned, it would give Usmanov a six-month window to engineer his own takeover.

Rather than try to scare Arsenal supporters about a Kroenke takeover, we should be welcoming any development which neutralizes the Usmanov threat. That is what must be done “for the sake of Arsenal’s future.” To rail against a takeover at this point is useless, a takeover, while not imminent, is inevitable. It will happen. But let’s also keep in mind that even if Kroenke reaches 30%, he is required to launch a takeover bid by law, it doesn’t mean that he wants it to be successful. It also doesn’t mean that the other shareholders MUST sell him their shares. He is only required to make an offer for them. So even the magic number of 30% is not an absolute. The other shareholders could stay on and Kroenke could have more than 30% without having bought the club.

I believe that a Kroenke takeover will not mean radical changes to the club, on or off the pitch. Kroenke is, above all, a smart businessman and he knows not to mess with something that is working. Arsenal are in great shape both on the pitch and off and a smart businessman doesn’t try to fix what ain’t broke.


  1. Xabier

    November 10, 2009 at 1:36 am

    Top post. Again!

  2. DTees

    November 10, 2009 at 2:54 am

    Great post. I do not see what the fear over Usmanov is. Have I missed some statements stating he will ruin the club ? As far as I can see there is no difference between Kreonke and Usmanov. Both are very wealthy successful businessmen who have taken a liking to our club. Whether it’s US or Russian owned, what difference does it make ? The fact that Hill-Wood now seemingly has a relationship with Kroenke seems to make his take over more preferrable. Is what has happened at Chelsea bad ? As far as I can see every US take over has resulted in moving debt around and no funds for transfers (Utd, Liverpool and Villa). I’m fairly sure Wenger wouldn’t spend money even if he had it, so again what difference does it make which board runs the club ? Don’t misunderstand my comments I agree with ‘if it ain’t broke, why fix it’, but a takeover is seemingly inevitable, as for who that is, it will make no difference providing Wenger stays.

  3. g0on3r

    November 10, 2009 at 3:37 am

    the different is, kronke is very familiar with sport business. after all, he own sport franchises in u.s. usmanov on the other hand a clueless businessman when it comes to managing sport club. i think arsenal boards are very smart people. they always put club interest first. so now they back kronke, we should trust them on that.

  4. Bernard

    November 10, 2009 at 3:48 am

    Whichever foreign buyer ends up buying the club, he will take money out of the club, either by saddling the club with the acquisition debt or by taking dividends. They are businessmen who are only interested in the Arsenal for the money that they can make out of our club. The only benefit in Kroenke taking over the club is that he offers to apply the vaseline before buggering you.

    • Johnny Wins

      November 10, 2009 at 5:00 am

      Sorry Bernard i don’t agree. Rightly we are concerned by a new face but personally i think Arsenal is undervalued. It is not unreasonable to anticipate that when the stadium debt is paid off and with a possibility of a european super league within the next 10 years that any buyer now can make serious money. Personally i don’t think he will take full control but who knows. I notice on Denver Nuggets forums that he is considered to be very careful with money in terms of investing in the team so i expect more of the same.

      Perhaps it’s time for the Arsenal fans with shares (i’m not one of them) to get together and create their own lock down agreement.

  5. jena

    November 10, 2009 at 4:07 am

    Wenger will not survive at Real Madrid. so the talk of him threatening to go there is bull. Real Madrid represents everything that Wenger despise – 1. High spending from borrowed money 2. -players are bought by the club president and imposed on teh manager 3. club management interferes with team selection. He wont last a season let alone 5 without winning anything at Real Madrid. would anyone in their right sense quit their job just because their company has been taken over?
    I personally dont care who takes over the club as long as they are able to bring the success which we havent had in the last 5 years . Its all that matters to me as a fan.
    Dont know where all the anti Usmanov vibe is coming from , but Kroenke is no better devil. if at all American owners havent done too well at their clubs compared to say Roman ( @chelsea) and the mid east guy (@ City). Roman brought league sucess to chelsea after 50 years and Man City is doing much better after the takeover.
    and one last thing- no one is bigger that the club- including Arsene Wenger. The club will be there after he is long gone.

  6. morrow

    November 10, 2009 at 4:21 am

    Kroenke is a property developer,builds malls and use sports teams to attract families to the malls.He does not load his teams with debt,he makes his money from the property side.He is married into the world’s richest retailer business Wal-Mart,which uses his malls.He has hooks then into the supply and demand side of malls.Arsenal is a football club with the foresight and intelligence to go into property developement to support the football side albeit at a time when the property market is under stress.I think Kroenke is a great fit for Arsenal,I don’t believe he will load debt unto the club,I believe his eyes are fixed down the road on the property side and Arsenal is growing as a global brand,no reason to believe that Stan does not see his American business model extending now to the UK and beyond

  7. adam

    November 10, 2009 at 5:03 am

    The truth and the words Rob and Shepherd should never be seen in the same article.

  8. G10

    November 10, 2009 at 5:38 am

    You are all missing the point.

    “There is absolutely no reason to believe that Kroenke would do what the Glazers and Gillett Stan Kroenkeand Hicks have done at United and Liverpool in saddling those clubs with the debt they incurred to buy the club.”

    There are 62,219 shares in Arsenal Holdings PLC.

    The price for the outstanding shares stands at £10,500.

    This values the club at £653,299,500.

    For Kroenke to purchase the remaining 70.1%, he will require £457,3962,949.50. If you think he has that amount of free cash burning a hole in his pocket then you are living in the clouds.

    Then, you have our c.£300m debt.

    For the club to be in the same position as it is now – save for a change in the ownership structure – Kroenke will need £457,3962,949.50.

    For the club to be in a better position than it is now, Kroenke will need more than £750,000,000.

    These figures must, of course, be considered in light of the clurrent economic climate.

    I would surmise that Kroenke does not intend to purchase the club outright. He will follow the John Magnier and JP McManus route of acquiring a 29.9% and sitting on it. With his alliance with Fiszman et al, the current board control the club and require little input from LNBS and Usmanov, whom combined, own 40% of Arsenal Holdings Plc.

    Kroenke will then make money out of the other revenue streams, develop strategic partnerships and then sell his share for a profit when the time is right.

  9. G10

    November 10, 2009 at 5:43 am

    I hasten to add:

    Kroenke purchasing 29.9% of the club is the business equivilent of a dog urinating to mark its territory.

    No-one is going to attempt to purchase Arsenal until Kroenke decides to let people know his stake is for share.

    He’s an incredibly intelligent man.

    If I possessed 1/100th of his acumen, I would be a very wealthy bloke myself.

    • ArsenalStation

      November 10, 2009 at 8:49 am

      Kroenke does not seem hellbent on the power trip of owning the football club unlike the Glazers and Gillett and Hicks. There is no reason to believe that Kroenke wants to own the club outright or completely. Just 51% would give him a controlling interest.

  10. Dan

    November 10, 2009 at 6:52 am

    DTees, the difference between Kroenke and Usmanov is simple. Kroenke is a relatively reliable businessman who is likely to sell interests in US sports to fund any takeover of Arsenal (which is by no means certain). Usmanov is a convicted criminal whose legal representatives tried to silence critics on blogs when Red & White Holdings first emerged.
    He also undertook a shameless PR campaign through the press to fool fans into thinking he represented a free-spending route to success.

    Let’s not forget what both have offered: Kroenke has been quietly acquiring shares with the consent of most of the board. Usmanov undermined the club’s long-term business strategy by spreading the PR message that we couldn’t compete financially and are crippled by debt. Then he offered to devalue the club with a share option – that means making the business weaker to free up transfer funds. He’s not even offering his own money!

    He’s an odious, criminal, Man Utd supporting man. If there has to be a takeover, then choosing between Kroenke and Usmanov would make a great deal of difference.

    • ArsenalStation

      November 10, 2009 at 8:52 am

      “The consent of most of the board.” This is crucial, Dan. I believe we can all agree that Peter Hill-Wood has the club’s best interest at heart. Despite his initial dislike for Kroenke, the two have gotten to know each other better and now PHW is selling him shares bringing him closer to the threshold. Do you think PHW would be doing that unless Kroenke had discussed his plans and intentions with him? Can we not trust the judgment of Peter Hill-Wood?

  11. Dan

    November 10, 2009 at 7:05 am

    Jena, Wenger isn’t going to Madrid, so why do you say he ‘will not survive’ there? He’s already rejected them – with the interesting addition that he was tempted (probably a hint of a threat in response to the abuse he took last year from fans at the AGM):


    And maybe you should check my comment above when arguing ‘Kroenke is no better devil’ than Usmanov – based on the pointless assertion that American owners (are you referring to the Glazers and Gillett/Hicks?) have been less successful than other publicised, foreign owners (at Chelsea and Man City).

    Or check out this effective digging on Usmanov. This should give you an idea of where the ‘anti-Usmanov vibe’ comes from, in case you were living under a rock in 2007:


  12. Dan

    November 10, 2009 at 11:59 am

    I trust Peter Hill-Wood – not devotedly, but because he gave the impression that he was against a takeover when Kroenke first came along, saying “we don’t need his money and we don’t want his sort.”

    If PHW and Kroenke are now cosying up, it must be because:

    a) he’s convinced he is suitable now
    b) it is a pragmatic decision, based on the threat of Usmanov (or another issue)
    c) it is in good faith that Kroenke will not disrupt the status quo on the board.

    Whichever it is, it’s better than having R&W Holdings hovering.

  13. bobbygee

    November 10, 2009 at 5:30 pm

    Man U and Liverpool are still strong but lets see what happens. It is there money. I have no right to tell them how to spend it. The Gunners do need a good striker. A money player who can find the back of the net.

    • ArsenalStation

      November 10, 2009 at 6:43 pm

      Bobby, I wonder why you still think Arsenal need to make additions? Especially a quality striker… Considering that no team has ever scored as many goals as we have in their first 11 matches, I can’t see the necessity of adding to our attacking options. For me, if any money is to be spent, and I doubt it will be, it must be for a backup central defender, anticipating Senderos’s departure at the end of the season, or for a true DM to backup Song in January. Especially considering that we are playing Chelsea while Song will be away and United in the first week of February when Song could still be gone if Cameroon advance deep into the tournament.

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