Every year, since Stan Kroenke became owner, whenever the club is going through a difficult patch, after the finger-pointing at Arsene, Ivan and the tea-lady, the pitchforks are finally targeted at the owner. It is so repetitious it has almost become a ritual. I am convinced the practitioners have absolutely no idea why they do it, and, like all mindless behaviour, cannot conceive of its utter pointlessness.
This year’s high priest of these rites was the legendary Ian Wright. Shortly after Arsenal laboured to defeat Middlesbrough, which featured the once retro but now fashionable three at the back system, he went straight for Stan’s jugular with the following tweet:
“Arsenal joining this list of world beating teams 😡. Great investment’s though Mr kroenke. 👌” Ian Wright (@IanWright0 ) April 16, 2017
Apparently Wrighty is one of the many Arsenal fans who are heavily into wilful self-delusion. How else can one explain their blatant forgetfulness about the history of Kroenke’s rise to becoming the majority-owner of the club.
Let me reveal a long-hidden secret to Ian and his pals. It was because of the great 10-year run of Arsenal under Arsene Wenger, from 1996 onwards (collecting three EPL titles and four FA cups), when the value of the club had exploded, that the traditional English owners decided it was full-time to cash-out. Apparently they were not sanguine about an uncertain future paying for a brand new stadium. They were selling, Kroenke was buying. They disinvested, he saw a “great investment”.
Kroenke’s holdings in the club began with an initial 9.9% bought from ITV plc in April 2007. Sometime in 2008 he increased his stake in the club to 20.5% following a purchase of shares from fellow director Danny Fiszman. In May 2009, Arsenal announced Kroenke had bought a further 4,839 shares from the Carr family which made him the largest shareholder of the company with 28.3%. By November this increased to the maximum 29.9% limit.
Things really got interesting in 2009. Among the non-directors owning a large slice of shares was former vice chairman David Dein, who is today treated in some quarters as a legendary big-spending owner and director. Dein and others sold their shares to Red and White Holdings, co-owned by Russian billionaire Alisher Usmanov and London-based financier Farhad Moshiri, who made a rival bid to become majority owner of the club. As of September 2011 they owned 18,204 shares (29.25%) of the club.
Based on the bits and pieces that made it to the public domain, the future ownership of the club was decided by director Danny Fiszman who convinced Kroenke not to purchase more than 29.9% of the club until at least September 2009, while the rest of the board agreed not to consider a sale of their shares to “non-permitted persons” until at least April 2009, and had first option on each other’s shares until October 2012. When the lockdown ended, in April 2011, Kroenke extended his ownership of the club by purchasing the shareholdings of Nina Bracewell-Smith (15.9%), and Danny Fiszman (16.11%) and other directors of the Arsenal board, taking his shareholding to 66.64%. It is undeniable that Danny Fiszman’s (who, by the way, was the driving force in building the new stadium) deathbed decision to sell his remaining stake to Kroenke was critical to his majority ownership.
It is important to understand that majority ownership means Kroenke calls the shots in making the financial, managerial and strategic decisions that affect the club. This has meant, as minority shareholders, Red and White Holdings have no say in the key decisions as they have no representation on the board. In truth they have no greater privileges than that of a common shareholder, albeit one with a significant holding.
I wonder if Wrighty and those of similar ilk understand the importance of the choice made by Danny Fiszman, who bled red-and white up to his final breath. Rather than adopting former chairman Peter Hill-Wood’s bombastic declaration that “…we don’t need his money and we don’t want his sort…,” the late diamond trader, after scrutinizing Kroenke’s ownership of his many other sports franchises felt he would continue Arsenal’s tradition of being a ‘self-sufficient’ club.
Peter Hill-Wood and Fiszman were not naive and stupid:
“…Americans are buying up chunks of the Premiership football clubs and not because of their love of football but because they see an opportunity to make money…”
Hill-Wood concluded:
“…Stan Kroenke is involved in sport and we have had constructive meetings with him,”
“We have never been in better shape financially and do not want anybody to buy the club, but if Kroenke wanted to buy it he would understand it and how to maintain the standards.”
Apparently these standards are what drives Wrighty and company crazy. What makes them so mad? This is where the annual blame-game as a ritual makes absolutely no sense.
In the first place, unlike the Glazers at United, the American did not leverage his share ownership by using it as collateral to finance his buy-out of Arsenal. The Glazers went further, they then lashed the debt onto the books of United making the club responsible for making the principal and interest payments. Initially the total debt was around £660 million. This was the first time United had debt since 1931. The interest rates on the debt amounted to around £62 million a year. That by the way is the nearly one-third their annual payroll. Should United’s current revenue stream, reportedly over £500 million per year, begin to slow down, as in real-life, it is the wage-bill that will be cut to facilitate the interest payments.
The Glazers it seems have no limits to putting the burden of their ownership on United. In 2016 it was revealed the club must pay £15 million in dividends annually to the six Glazer siblings for the privilege of their buying out the club with borrowed money. It was further revealed that the said same siblings had borrowed a total of £10m from the club and been paid £10m in “management and administration fees”.
Compare and contrast with “Silent” Stan. He bought Arsenal with externally generated funds placing no additional debt burden on the club. How easily Ian and his friends forget that until 2014, Arsenal was struggling with repaying the obligations incurred to finance the new stadium. The club had locked itself into long-term naming and sponsorship deals which guaranteed a steady cash flow acceptable to the lenders who loaned them the money. But it didn’t leave a lot available for making transfers and paying wages comparable to Arsenal’s big-3 rivals (United, Chelsea and City). Not only did Kroenke not do a leverage buy-out, he has taken no dividends from the club, which is his inherent right as a shareholder. In fact the only direct payments that have been made by the club to a Kroenke entity is £3 million to Kroenke Sports and Entertainment LLC, in 2013-14 and 2014-15 (not taken since) for services rendered to the club. This is a piddling amount compared to the payments United must make to the Glazer children.
It is well known that what really aggravates Wrighty and others is the refusal by the billionaire majority owner of the club, to reach into his personal checkbook and spunk up the mega bucks necessary to help buy the best players available worldwide who could presumably guarantee the club to win every major trophy available. Wrighty’s tweet reeks with sarcasm and snark when he tweets “Arsenal joining this list of world beating teams.” Not.
Apparently these critics of Kroenke believe that making these “investments” will guarantee Arsenal league titles. Haven’t we learnt anything from the last ten years? Unlike a one-horse league enjoyed by Bayern and PSG or the Real Madrid-Barcelona duopoly in Spain, there is no evidence that spending massively on transfers and wages will guarantee first place in the Premier league. Examples abound. In the last four-years of the post Ferguson era United has spent about £400 million on transfers and have failed to make the top-4 in two of those years much less win a title. Roman Abramovich has spent about £1 billion on transfers and wages and last season finished 10th. City has spent an equivalent amount yet only has 2 titles in 10-years to show for their investment.
On a longer time horizon, relying on a sugar-daddy owner is economically and commercially unsustainable. Look no further than the recent example of A. C. Milan. For over 30 years they had the ultimate beneficent owner in Silvia Berlusconi. Under him they became one of Europe’s pre-eminent clubs, winning eight league titles, one Italian Cup, seven Super Cups as well as five Champions League trophies and five UEFA Super Cups. But due to Milan’s growing debt and Berlusconi’s falling financial fortunes, the club were forced to sell some of its best players year after year without significant reinvestment, leaving them floundering. In a span of just two years, Milan lost world class players like Andrea Pirlo, Clarence Seedorf, Alessandro Nesta, Pippo Inzaghi, Gennaro Gattuso, Mark Van Bommel and Gianluca Zambrotta, who were then followed by Zlatan Ibrahimovic and Thiago Silva.
Due to their cascading financial failure, both AC and Inter have fallen into the hands of Chinese owners. Nothing is wrong with the Chinese per se. Like any businessman they are in it to make money. But to the chagrin of some Italians, they are running both clubs as extensions of their businesses on the mainland. They recently forced both clubs to play their derby game at 12:00 noon on a Saturday, a tv-friendly time for their Chinese audience. To add insult to injury, in the case of AC there is little chance the new owners can afford to spend big on new players required to return them to former glory. They incurred significant “debt” (remember that word Wrighty) to finance its £628m takeover and their lenders reportedly have little appetite to extend new money to buy expensive players who also come with very large wages.
Meanwhile, the Rossoneri have now gone three years without European football, their longest abstinence from the continental stage in the past three decades — currently lead Inter by two points but are still two points behind fifth-placed Atalanta and an assured place in the Europa League.
Remember Milan was the biggest club in the world during Wrighty’s era as a footballer. One wonders if their experience will give pause to him and others who are so quick to blame Stan Kroenke for leaving Arsenal to do what it needs to do; generate its own resources and pay its own way.
Sadly, I think not. Most football fans have the memory of a goldfish. They have been seduced by the corrupt mainstream media into believing the false narrative that success can be bought and not achieved by hard work over time. They want titles and they want it now. Like Wighty and his twitter followers, the experience of AC Milan is quickly cast down a memory hole and big spenders like United, Chelsea and City held up as the gold standard.
Who thinks I am being too pessimistic?
Positively Arsenal 
Also worth adding the footnote that when the funding was delayed by a year that Edelman and AW managed to amazingly secure the extra wonga to get the go ahead.
With the main contractor happy to waive a years worth of fees* because they were happy to trust The Arsenal and how they do their business. Incredible eh? Who could imagine multimillion pound contracts conducted on trust? Palpably not some of our fans of Modern Football!
*in a funny way this delay probably aided the project programme once they finally got the diggers on site by reducing rush (the usual) and increasing the project planning window which would’ve helped in the design of those roof trusses which had to be welded on site etc., so not quite an act of benevolent charity but nonetheless a remarkable occurance in the modern world.
This is completely the inverse of what happened with the tiny idiots.
By not having a contractor under contract till late in the day they only received reliable cost analysis in the last 18 months or so. Which is one reason why their contractor has been laughing whilst doubling their costs haha!
Looks like Levy didn’t get much joy in choosing the right kind of contract or process or in finding contractors who would’ve been willing to trust his team/club/organisation who’d even have just worked towards providing him with a reliable estimate, nope none of that before singing on the dotted line which his team weren’t ready to do till very late in the day. even now they are facing extra delays.
For some reason we don’t see similar evidence that these huge organisations or companies don’t appear to indulge in such trust when it comes to Levy, Lewis & Co. I can’t imagine why not!* But we do note the THFC master plan involves securing non-private funding: i.e. The same discredited model popular in some parts of the US that our friends from across the pond are more familiar with.
*Paulinho (his agent) might have the answer…
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My favourite stadium/urinal project is the new proposed Gazcorp stadium in w.London.
There’s only one industrial kiln left in the UK! Can you imagine the designers commission?
Hahahahahahahhaaha!
For context: Such decorations, drapes, and paint (cladding not including the basic building shell – imagine a house with nothing but the walls floor and roof and maybe a toilet if you’re lucky and that’s your lot!, this kind of stuff only went up in N5 about three to four years after the stadium had been built.
Yet the experts wondered why the club weren’t spending for a period. An amazing history when you think about it. Acres of bare concrete staring them in the face for years…
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That is somewhere near the best post from master Shotta
And the comments are commensurate. Truly wonderful and informative reading. Kudos Positivistas.
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Great posting today, a special mention to Eddy in dispatches.
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Here’s the piece about nearly defaulting on the Invincibles pay:
http://www.mirror.co.uk/sport/football/news/arsenals-invincibles-were-within-days-6413388
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I like how the comments by someone on ac milan’s success listed their 7 italian super cups, I wonder when the same person lists Arsenal’s honors if the 6 community shields won in the last 20 years, seeing as the super cup is the Italian version of the community shield. I would have thought ac milans league titles and european cups would have been enough to make the point wanted.
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How to build a football stadium without stealing someone else’s money or going bankrupt:
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Clearly I’m biased but a strikingly good blog today – original piece by Shotta and some damn fine stuff to follow
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Positivistas all: I must join with George and express how super proud I am of the discussion and comments around this blog today. Despite doing some research to put together my piece I learnt so much more from you guys. Eddie’s contributions were appropriately flagged by George. This contrasts so remarkably to the discussions some of us became embroiled in years when the trolls, usually fronting for Dein or Usmanov, hijacked the blog to spread lies and confusion. As I confessed to both A5 and the boss, earlier this afternoon, I nearly quit on completing this post halfway through last night. Something motivated me to get out of bed early morning and get the job done. Cheers PA. It was worth the effort.
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What an absolutely fantastic piece Shotta. Loved it!
Also great discussion on the shares being bought up and Edelman’s role in the comments. Very informative by eduardo.
What do I have to add? A paltry story about Ian Wright. I ‘met’ him a few years ago after a charity game organised by Tony Adams. So I met Adams (have a picture with my arm around him as he was addressing the crowd. He was funny too), Adrian Clarke, Martin Hayes (who injured his ankle and was limping), and Ray Parlour, who was last out of the bar, but was an absolute gent and a real delight to talk to. Ian Wright though. Drunk AF, nose up in the air, and had his ‘bodyguard’ with him who was bossing everyone around and making them line up to take photographs with him. Seemed all a bit too celebrity to me. Far from the common man touch that he seems to promote himself as embodying, and how Arsenal fans of an earlier generation seem to remember him. Guess what I’m trying to say is that neither his media comments, nor his behaviour, have endeared Ian Wright to me. And seeing as I became an Arsenal fan when he was basically on his way out, I don’t hold any special regard for him as a player either. So Ian Wright can just fuck off for all I care. Doesn’t seem too bright to me anyhow. .
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on ian wright – why do so many people mistake a great player with a club legend, in no way does the attitude, towards Arsenal, of great Arsenal players such as Wright, Merson, and Henry for example, in no way equates to them being club legends, look at the difference of attitude towards Arsenal of true club legends such as Wilson, Brady, Davis, and two late greats Armstrong and Rocastle.
Compare our ex player media hounds behavior towards Arsenal with that of similar ex players of Liverpool, Man utd, Spurs and Chelsea towards their old clubs. Where is the loyalty in our ex players, they can’t wait to tell us all how much the love Arsenal, and love and respect Arsene Wenger, but then make liars of themselves with their actions and words.
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Eduardo
But that’s hardly restricted to Arsenal or football. People like somebody, a rock star, actor etc, for their proficiency in one regard, and then look to them to tell them what to like, who to vote for, what social cause or charity to take up.
In Arsenal’s case I’m guessing it is a mix of that, and the fact that there are already set agendas now. Anyone who echoes the same…let’s say thoughts… more accurately soundbites.. is used as a boost to the view espoused, with their past granting them legitimacy and immunity from challenge, such as they can’t generate on the basis of their own arguments.
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And on our ex players. Those that are entirely pro Arsenal, don’t find themselves with a job. Brady on Irish TV (probably due to his Irish football linkage rather than Arsenal’s) and for a while I remember Charlie Nicholas uninhibitedly (wow I can spell even after a few drinks) supporting Arsenal, are the only exceptions to that that I can think of.
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image: http://www.arsenal.com/assets/_files/scaled/696×392/apr_17/gun__1493117607_alexisslide.jpg
Alexis at Wembley
Wenger – Why I think Alexis will stay
Arsène Wenger followed his pre-match press conference on Tuesday by sitting down with newspaper reporters – and Alexis was top of the agenda.
The boss said he was hopeful and confident that Alexis would agree a new deal with us. Even if he doesn’t, the manager would rather keep Alexis for the final year of his contract than sell him – and especially not to a Premier League rival.
‘Our No 7 finds a way to be dangerous’
Team news: Is the Ox ok for Wednesday?
Watch all the goals from the semi-final
“You amortise a transfer during the length of the contract,” explained Wenger. “So when you play an amount of money, every year you deduct, when he signs four years, 25 per cent of a contract.
“The problem as well that you have to analyse, always, firstly, is: can you find better and for what kind of money? The inflation is so big that sometimes today even mathematically there can be advantages to keep a player until the end of a contract.
Alexis scores the winner against Man City
image: http://player.arsenal.com/videos/images/dotcom_article/6f547d069155cfc3c9b42b4c1a66f272?thumbIndex=0
Video poster
“But I personally think he will sign and stay here. First of all he is happy here. His desire is as well to stay. That is what I deeply believe. The disagreements are more purely contractual. Not on the desire. Both parties have the desire to find an agreement, so I think it will happen.”
We sold Robin van Persie to Manchester United in 2012 but Wenger says the Alexis situation is different.
“I let Van Persie go in the last year of his contract because Van Persie was 29, going on 30, and he was signing a long-term contract. That is not the case with Alexis. Alexis is 28. So that is a bit different.
“I don’t think that you would sell him to any Premier League club, that is for sure. Because you want to be as strong as you can be, and not strengthen the other teams.
“But I just told you that I think Alexis will stay here and sign a contract. You are in your job [in the media] where you are always painting the most dreadful situation. But we are not necessarily in that situation.”
And Mesut Ozil? “It will be similar,” said the boss. “It will all be decided in the summer.”
Read more at http://www.arsenal.com/news/news-archive/20170425/wenger-why-i-think-alexis-will-stay#jizFluBCuIk3LmqM.99
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Sir Jenkinson @theEpicGooner 5h5 hours ago
Unreal. Dialsquare tweets that Arsene isn’t doing 3-5-2, it’s Allegri doing it with the support of his backroom staff who left Juve.😂😂😂😂😂😂😂😂
5 replies 25 retweets 48 likes
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Stan, Ivan, Josh, Sir Chips, Wenger, vic Ackers(though we are told he was just banter) and the reporting on them is all just part of a concerted demonisation of this club.
Biased reporting, media witch hunts, picking on players, not mentioning ref mistakes. Reading some WOB sites, some articles and hearing some pundits, you would think it was only City who had a decent penalty shout turned down
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Bizarre ….who is dial square?
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The much vaunted hero David Dein seems to take all the credit for attracting Mr Wenger in brief Danny Fiszman desevers much more of the credit, their conversations generally conducted in French ,which Mr Wenger greatly appreciated at the time grew close to him. DF would make available his private jet to come to England where they would spend time talking about life as well as football.
David Dein a clever opperator an admirable self promoter, had no wish to go to Ashburton Grove and lobbied strongly to go to Wembley,so much so he alienated himself from the rest of the board as well as AW. When his mobile phone was taken he decided to find a new suppoter (After first finding Stan Kronke) for his attempted coup,hence the arrival of Usmanov, Moshiri and Red and White holdings.
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Why do people keep saying that football is a contact sport,Boxing, Martial Arts, American Football,Aussie rules and Rugby are sports that are contact is a prerequisite. There is no part in the laws that allows for contact.
In fact contact in football is a punishable offence.
The contact in football is incidental .
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