Here’s something that I don’t understand which maybe some of you can help elucidate. How is it that the Arsenal board, who personally profited massively off their shares, have largely escaped criticism for taking money out of the club?
Using round numbers:
- David Dein bought 16% of Arsenal in 1983 for £300000 and sold his last tranche (14%) to Alisher Usmanov for £75m in 2007. At one point, Dein held 41% of Arsenal’s stock and between his first purchase and his last sale, he made millions more off selling various portions of what he had to other investors.
- Lady Nina Bracewell-Smith married into an Arsenal family with the Bracewell-Smith’s history at the club as charimen and board members dating back to 1948. She sold her shares to Kroenke Sports Enterprises (KSE) for more than £115m.
- Danny Fizsman was a friend of David Dein and bought his first set of shares in Arsenal back in 1991. Like Dein, his holdings fluctuated from 8% to 24% and before he sold his final tranche to KSE for £117m he had already made tens of millions from sales of his stock.
- Let’s round off their sales and say that just between those three Arsenal board members, they sold their shares in Arsenal for £300m and that of that £300m, £250m was pure profit.
Now, let’s talk about shares. Once they have been issued and bought for the first time, shares are just a division of the capital in a business. But that initial offering of shares is almost always a means to raise capital for the business. Similarly, a rights issue is a way to issue new shares in a company and generate more capital but only if the company is worth it, as Man U supporters are finding out.
You may have heard once or twice Peter Hill-Wood proudly proclaim that t he board has never taken dividends. And it’s true because they didn’t need dividends when they have £250m in their pockets. You may also have heard me say that “they (Dein, et al) took money out of the club” and I stand by that because they could have put the money back into the club. But they didn’t.
The simplest thing that any of those three could have done was just given half or even a portion of the money back to the club that they so love and to the fans who enriched them. This could have even been done as a trust that only goes to player purchases or something, which would ensure that Kroenke didn’t just hoover the money back to Delaware.
They also could have done a rights issue and there’s no telling how much money that would have generated for the club. I imagine the bidding war between Kroenke and Usmanov would have been very intense. Dein had already sold, so he would be out of the picture and would have to donate his money back into the club on his own. But those two English members of the board who sold their shares exclusively to Kroenke could have done a rights issue and generated hundreds of millions in capital for Arsenal.
I hear fans say that players are greedy when they want an salary increase of £2m a year. The argument against it is that these players are rich enough, they don’t need that extra £2m. But why isn’t the same true of Danny Fiszman who had sold his diamond business for £150m before he sold his Arsenal stock for another £117m. Or Lady Nina, who married into the Arsenal family, who was already wealthy, who has a peerage, and who paid zero pounds for her shares? She is now one of Britain’s wealthiest citizens. How much money do these people need? When do we question their love for Arsenal in the same way that we question “Robbing vain Per$ie”? When do we start using pound and dollar signs in Danny £i$zman’s name?
The answer is that for some reason we don’t. In fact, it’s kind of taboo to even mention how much money those folks took from Arsenal. Which you will see here in the comments on this post.
I have no problem with people making money off their investments, I have no problem with Arsenal being run responsibly, and I have no problem with Arsene Wenger’s statement that despite the team’s value shrinking year after year Arsenal still has a chance of winning the title.
But unlike a regular investment, Arsenal is more than just a business. People don’t have the same sentimental ties to Pepsi as they do to Arsenal. There aren’t thousands of Pepsi bloggers out there pouring millions of hours of work into various Pepblogs. So, when an Arsenal shareholder cashes out and takes £100m it feels a lot different to me than when my mutual fund made profits off shares in Pepsi.
Similarly, I think the club should be run responsibly and with an eye to the future. If Pepsi goes out of business, there would be a momentary reflection on its history and then people would go out and buy Coke. But if Arsenal go out of business it would be the loss of one of the biggest teams in Europe and a huge tragedy for millions of fans.
And lastly, Arsene is right, any team has a chance of winning the title. The question isn’t whether Arsenal have a chance or not it’s what percent chance they have and right now, without a major investment in the club in the form of quality players, Arsenal’s chance of winning the title is very small. Investment, I might add, that would have put world class players on the pitch and might have enticed Robin van Persie to stay.
But I don’t see Arsenal investing the money. Kroenke’s already put in £300m, which was then taken out of the club by the shareholders. The cash on hand is going to be saved for a rainy day. It will be a cold day in hell when Dein, Bracewell-Smith and the Fiszman family give back that money they took out. “Robbing vain Pu$$ie” is leaving Arsenal because he stands to make more money and also because he knows that he has a better chance of winning a title somewhere else. And there is no way that Kroenke will allow a rights issue which would either dilute his stock or force him to use more capital.
I’ve made my peace with those facts and now look forward to which players Arsene will bring in on a budget to help make a run at the title. Or even more realistically, a run at fourth place. And fourth place is fine by me, because that means another year of Champions League football at Arsenal and another year where I can see Arsenal play the AC Milan’s of the world.
Pitchforks!!!!!
The Arsenal has always had a strong legacy aspect to it, it was the last club run by scions of the bygone era in which English league football was born: diamond merchants, a Lady of the British Raj, good old boys who hobnobbed with the Royal family. In this way the domineering perception of the club as being overly continental after the arrival of Wenger was always rather ironic: the club was simultaneously synonymous with the most “English” of institutions and also with the trend towards the integration of England with “the continental” ways of doing things, which the English are and always have been, at best, skeptical. Arsenal could be the team of the Queen and by extension her aristocracy, but there was something “fishy” to the pie and chips crowd about a club whose major innovations in the ’90s was to discourage players from eating pie and chips, or drinking 15 pints of lager the night before a training session (an English peculiarity which will explain why Wayne Rooney will peak at 28, and Andres Iniesta will be going into his late 30s.)
How disappointing to observe, as Tim has, that these very imperial vestiges that made Arsenal so unique in the era of EPL football: the steadfast connections to its very specific history as an English club in the era of the globalization of the “English” game, are what ultimately ended up cannibalizing its ability to compete in the era of Sheikhs and Foreign Investment funds. These inheritors of the Royal Arsenal gave to it as little as they could, and when the hour in which they finally sold out its traditions to sell up to an American, they gave back to the Arsenal precious little. Platitudes, empty phrases. It was already clear when Kroenke bought majority shares and the vaunted “board” many are going to defend in this comment section took his money and ran, that we could not compete with our european rivals, we were already losing players every year for reasons of finance: Flamini, Hleb, Adebayor, Nasri (i won’t include Cesc in this category.) and they did nothing, except to ensure assiduously that a 30% owner of the club was not so much as extended the courtesy of a seat on the board (not very English these manners.) Nevermind the fact that this 30% owner’s interest seemed to be flooding the club with money that would be spent on winning football matches. This lot was about many things, but it’s obvious that, towards the end of their stewardship, winning football matches was not the primary end to which they availed their efforts.
What a load of bollocks.
This is the silliest article to appear on this usually sensible site.
Shareholders are exposed to risk so they are entitled to reward when their investment increases in value. The implication of this piece is that their capital gain should be spent on players whilst in fact the turnover/profit is adequate on an ongoing basis. Both Kroenke and Usmanov are in it for capital gain. Usmanov implies he would provide funds for players without ever being specific.
Over the decades Arsenal has been a very successful club, though with gaps of much worse performance than we have recently experienced. Suddenly despite coming one place higher and getting one point more than the previous season we are in crisis and appallingly badly managed.
The directors, unlike the Manu Glazers, have in no way reduced the club’s ability to compete.
Furthermore in my opinion they are handling the RvP and recruitment situation brilliantly and I believe that whoever ManCity, ManU or Chelsea buy we will be in a good position to compete.
I agree that former board members – like Nina Bracewell-Smith, Danny Fizsman & David Dein who benefitted from the Usmanov/Kroenke ego trip/power tussle – should do the decent thing and invest in a trust dedicated to serious squad investment that would keep the club competitive. Where is your shame and/or dignity?
All the custodians with real power must work tirelessly to ensure Kroenke/Usmanov or any future suitors are not able to arrest development or royally shaft the club. They can start by forcing Silent Stan into a corner that ultimately favours the club and shines light on the lingering doubts about his ambition/intentions for the club.
It was initially not being able to compete – in the transfer market – against Mansour/Abramovich/spanish banks money. Now it appears to be losing our youngsters as soon as they begin to show quality!
I am not opposed to the club’s wage structure – despite what one’s peers are earning elsewhere. I believe +£90k a week should be more than enough for anyone who claims to love the game!
However, given our unfortunate history with injuries, it would not do us much harm to get quality (“under the radar”) players – that won’t break the bank – to cover areas where we are/have been historically vulnerable. Ready made replacement for Cesc, covers for Song/Arteta, Rosicky/Diaby, Sagna/Gibbs, competitors for Wilshere/Ramsey/Jenkinson/Coquelin positions.
I have faith in Wilshere, Ramsey, Jenkinson and Coquelin but experience re-inforcement could very well end the drought and make future contract rebels look like the greedy mercenaries that most of them are.
We forget the very good assets we have in Arteta, Koscielny, Vermaelen, Song, Sagna, Rosicky, Wilshere, Diaby, Ramsey, Szczeny, Gervinho, Djourou, Coquelin, Santos, Mertesacker, Gibbs et al (hopefully Theo and RVP when they stop being silly). Not mentioning the promising Myiachi, Yennaris, Frimpong et al. One of Podolski and Giroud shoud hit the ground running (hopefully both)!
Hopefully with a few “value/mid priced” quality additions we can end the trophy drought: minimising the irritable white noise from so-called pundits and minimising the risk of losing Walcott, Song, Wilshere, Ramsey, Szczeny et al.
They only got the money three years back, didn’t they?
So if it’s true that they have never taken any dividends from the club in all their years of owning shares, I’d say that is commendable.
Not saying they shouldn’t invest now, just that your dividend-investment argument isn’t right.
Two points. I buy 100 shares in Untold Arsenal @ 10pound a share, total 1000 pounds. A year later I sell them at 20 pound each, total 2000 pounds. I have a profit of 1000 pounds but I have neither put money into Untold Arsenal or taken money out of Untold Arsenal. I have simply bought and sold shares. A company in profit will give its shares holders a dividend, but they don’t have to. If the company shows a loss on the year then its quite likely infact almost certain the value of their shares will decrease. So do I cut my loses and sell or do I hold on hoping the company will return to profit?
The directors didn’t take a dividend on their shares. They did sell them at a fat profit which doesn’t affect the finances of the club.
SK is suppose to be paying for his shares from sources outside Arsenal.
As opposed to the Glaziers who borrowed money on the strength that Manure would have the money to pay the loan. As the Glaziers are out right owners of manure they have control of the money.
2) If Arsenal issue a share floatation the only people whom that will help are the fat cats who can pay the price. In theory Ursmanov would win hands down. True the money would go to Arsenal but if Ursmanov got control through the share sale he could then take the money out of Arsenal. He could well use Arsenal to launder money if he feels he needs to. I am not saying he has money to launder (make clean).
You do this by buying a company with the money you want to lose. Once u have control of the company you take the company’s money and put it into your pocket thus the money is legal. To avoid tax you place the money in a company you own based in a no tax or very low tax country.
As it stands at Arsenal ( as I see it and I could be wrong) SK is the majority share holder so in a sense he is the owner but I don’t think he owns the company.
From what I can gather SK neither puts money in or takes money out of the clubs he owns. But who knows the future.
Three problems with your theory my man:
1. Share issues don’t necessarily mean that the shares have voting rights, like what the Glaziers are doing right now with their Manu IPO. A shares, B shares, C shares and all that crap.
2. In most share issues there are stipulations on who can purchase shares and the percentile of shares which can be bought by specific entities.
3. Even if we expanded our share value by 25% Kroenke would still be the majority shareholder.
It’s not in Kroenke’s interest to have a share issue because although he is not collecting dividends, he is making a piss pile of money from from his 50% ownership in Arsenal Online and Arsenal Media. All money which will never come back to the club, but goes directly to Kroenke Sports Enterprises pocket.
Now, that’s a fact.
I have long said to people who want David Dein back, “What about the £75m Usmanov gave him? Shouldn’t he bring that back if he’s coming back?” Both he and Fiszman got lucky in getting into Arsenal when football took off financially, though to be fair to Dein he was there a decade before things suddenly warmed up. But I fully agree that for those two and Lady Nina, in the words of Dolly Parton, it’s all taking and no giving.
Lady N’s husband unfortunately can’t think for himself these days, or he might have had more to say about his cousins the Carrs and his wife selling out. (Lady N is not a peer, by the way – neither Baronets nor their wives are peers.)
As I’ve blogged before here http://wp.me/p1I44P-c2, PH-W isn’t really to blame for this – neither he nor his family wanted or expected to make money from Arsenal, and of course never did until very recently. He has made some, but peanuts compared to the newer arrivals who have come in and sold out around him.
I don’t fully agree with your take on rights issues (I’ve written about that one too!) but in general you’ve made a very good point.
Apologies for the ensuing novel.
As always, interesting piece Tim. I’ve always found the shareholder argument spurious, and it’s funny that you take it apart well, but arrive at the common conclusion. In fact, supporting Arsenal IS like being a Pepsi fan, but for argument’s sake, let’s say it’s Coke (it’s red after all and will make the point better). But let’s set the scene:
John Pemberton has a great idea – sell people cocaine in liquid form; they will become addicted and drink it in 38 weeks of the year – but doesn’t have the money to do so. He forms a company, and sells shares in the company entitling buyers to a share of the future cash flows. The company will reinvest these cash flows, and occasionally pay its owners as dividends. They can also make money back by selling those future cash flows (let’s say $10 over 10 years) to others who will value that share based on what it’s worth today (maybe $0.75 because I could take that 0.75, put it in the bank and get the same $10 from the bank in 10 years). The original money invested gets use to buy machinery to make fizzy cocaine wine, but any share trades in the secondary market after that are only barter between investors – none of that money gets put into the company. The only thing that may get put in is advice, as the shareholders try to ensure they get $11 in ten years time instead of $10.
What’s this matter? Well millions of shares in thousands of companies are traded everyday, and no one expects owners to add additional capital – if they did, they would perform a rights issue, but all owners would have the same chance to add capital so as to avoid dilution. This would then be used to buy new factories (players) to produce Coke with the hope that there is a greater return on all the money invested in 10 years. If you stared off with 10% of the company, you can, but don’t have to, buy 10% of the rights, so you still own 10% at the end, but you need to put in 10% of the money. The funds from the shares they purchased went to “enrich” the previous owners, but nothing goes into the company itself.
OK, sorry, for the Finance 101, but a lot of the discussion in the comments lately has totally missed the point of the rights issue. So, why is Arsenal like Coke? It’s a brand, and one that people love. When Coke brought out New Coke, there was a huge uprising. Consumers, who had no financial interest in the company, wrote letters, held boycotts & protests until the company changed it’s product. Pepsi (Chelsea, Man City, insert douchey team here) tried to capitalise. Ultimately, Coke caved to the consumer pressure and introduced Coke Classic. Interestingly, sales massively increased, to the extent that some believe New Coke (youth team?) was a marketing ploy though most attribute it to being a strategic blunder (similarly maybe Roy Hodgson at LFC = New Coke, and Kenny = Coke Classic?).
Ultimately, the share price of Coke tanked with the introduction of New Coke and shot back up when Coca-cola Classic was re-introduced. Different shareholders bought and sold along the way, making and losing fortunes. The larger ones, were able to influence the strategy of Coke’s board of directors, who in the end listened to the consumers. But they never put new money into the company – some profited, others lost.
There are only two ways change will come about at Arsenal 1) a) the board wakes the hell up perhaps by b) reading your TTV column and doing the modelling and scenario analysis, or 2) the fans get so pissed off they boycott like they did New Coke. Stop buying shirts, beer at games, or even match tickets (season tix renewals are down…). Some supporters will say this is not being a fan, blah, blah, blah, while others will recognise it’s the only lever that the fans can pull and it’s a legit way to bring about change. ONLY when the revenue lines on Matchday Income, Merchandising, and eventually, commercial deals (when the sponsors take notice) decline because of supporter boycott/loss, then will the board will be forced to put new inputs in their model and realise they have miscalculated and that it takes money (player investment) to make money.
Fans shouldn’t be angry with investors for making money on the club – they should be angry at themselves for continuing to hand their cash over to an indifferent company. Only when they protest, will Youth Arsenal be replaced by Arsenal Classic.
+100.
Admiration for the analogy and completely agree with your comment.
Totally agree.
Well said.
Very well said. Actually fans are so polarized that its actually helpful for board to run things because they know there is a majority of fans who would see no evil and hear no evil no matter what.
I never quite understood shares. When shares are first issued, it’s to raise capital, right? After that “investors” are simply purchasing shares in the hope that their value will go up in the future and someone else will buy them for a higher price. Apart from initial share issues, the money spent purchasing shares never goes into the business but into the pocket of the person selling the shares.
This is how I see it anyway. Kroenke hasn’t put £300m into Arsenal but given it to the previous share owners to buy their stake in the club in the hope he can sell on in the future at a profit. Ironically his stake has increased in value because Usmanov has been paying over the odds to increase his share of the value of the club.
The club will be able to borrow more money because its relative value has increased when shares are bought at higher prices but the money paid is never intended to be used by the club itself. Club’s are run on operating profit and revenue. Isn’t that so? Well it was until the sugar daddies introduced bottomless wells of oil money which they never intend to get back.
I know my view is simplistic but the difference lies in the players taking money out of the operating revenue of the club whereas previous shareholders take their money from someone else outside the club hoping for a profit of their own further down the line.
@jenkinson. I agree with all you have said . Arsene is saying ‘If you want RVP prove it put our price on the table’. I guess nothing will happen till near the end of the transfer season. So we can ignore all these rumour blogs.
Tim. It was my understanding that Mr. Fiszman did put in money out of his own pocket in the late 90′s, to the tune of
50m
This is a daft article… It beats me that you think you can sit down and write an article instructing people who earned their money legitimately on how to use said money or live their lives.
These guys don’t owe the club anything. The reality is that it’s a business and there’s nothing wrong in them “taking money out” as you claim.
If they choose to sell their shares and not reinvest it, you’re in no position to demonize them for that. It’s theirs for a reason. Get with it.
Of course there is nothing wrong with acquiring capital gains, certainly the right of any stockholder in any enterprise. the lamentation and the condemnation arises from the demonstrable fact that in non-franchise club sport, one whose leading giants are all run irrationally these days, owners who do so hurt their former property’s ability to compete. obviously this is their right, but then it is similarly the right of adherents of that sporting club to condemn them for doing so. or to lionize them for doing so, this being an election year ideology should come to the fore! bland recognition of their rights and responsibilities as shareholders is also an option, but this is a sports site, and of the three options, this most obvious one is also the dullest, and a nonstarter.
Great admiration for your work and efforts.
Hello my lady.
Great to have you back. truly missed your wit and take on matters.
Hope all is well.
Best point to keep in mind from this excellent post: holding shares in AFC not like holding shares in other corporations, e.g., Pepsi, Intel, 3M, etc. Risk of loss minimal as customers/supporters not inclined to leave for another corporation with better products (i.e., trophy-winning seasons).
Ignoring this difference is just as misguided as SK ignoring the difference between US-based sports leagues and the English Premiere League. But he seems to think what works in NFL or NBA can work in Prem. Biggest flaw in his ownership and biggest worry for me, and why I don’t see AFC moving forward with him, beyond slight uptick from commercial renewals in next few years.
European football is just a different animal from US leagues that have complete monopoly on talent and do not compete with other leagues for the elite talent. Which is why US teams can “trade” players, distribute player rights to weaker teams for overall benefit of league competitiveness, and set salary caps/wage ceilings that tie wages to league revenue.
I’m not so sure about fan loyalty, Ohio. You’re right in that the key issue here is about branding and whether or not we can separate the brand from the business. Certainly, the guys running the business want you to believe that the two are inextricably linked and that they’re sporting cannon tattoos under their suits because it makes you more inclined to buy the other shit they’re selling.
In fact, Soccernomics devoted an entire chapter (#10) to the myth of fan loyalty: “Are soccer fans polygamists: A critique of the Nick Hornby model of fandom.” Brands, whether in football or elsewhere, come and go. It’s a form of Availability Bias – we remember first the companies that last 100 years, but the overwhelming lifetime for a company (brand) is under 30 years. Similarly, we here heroic stories about lifetime fans in football, but the facts are that 50% of people switch allegiances in their lifetime, or have multiple teams, etc. I’m not advocating that by any means, just saying the better story is the one people remember.
Google “New Coke” and look at people’s reactions – 400,000 people took the time to bitch out the company. One dude came out of retirement to form a PR company dedicated to lobbying Coke to bring back the old formula. People get just as nuts over brands as anything else (celebs, football, etc.) – it’s psychology. The ironic thing about psychology though is that we’re prone to forget that fact!
The difference between team shares and other companies is that owners sometimes buy into the brand as well. Owning a team defies the traditional risk/reward balance in that it’s high risk/low reward – totally illogical, but people buy into them for prestige – another byproduct of branding if you will. They are like most other companies in every other way. Good branding produces strong consumer loyalty regardless of whether the product is sleek attacking football or canned sugar water.
Thanks for the reply, Wang. I just picked up a used copy of Soccernomics last week, so I look forward to reading that section.
Still, I think the investment risk is different, since even gross mis-management, like Leeds or now Rangers, doesn’t lead to the company dissolving. And I think if/when either club gets back to the top flight, they could regain many of the old supporters.
Could a reconstituted Pontiac or Netscape regain old customers as easily? Maybe, depending on management of the brand, as you point out. But it does seem an easier proposition with a football club.
I just wish SK and AFC board weren’t as risk averse as they seem. It seems like they know commercials will take a big leap without upping level of investment and are content with that. But couldn’t that leap in revenue be even bigger with a Prem title, or at least a genuine run at one?
Invest, say, 30m now of what you know you’ll get in two years time, and you could get a much bigger return in the long run.
I think you’re right to highlight the passion associated with football teams (brands), though I would contend similar situations do occur with other more conventional brands – cars come to mind immediately, going bankrupt then being bought & sold and brought back to life – Mini, Jaguar, etc. The advantage football clubs have is geographic, but this is more historical – the whole point of an Asia Tour for us or the US for others is that non-locals can be sold on the brand and that in the coming years this will make up an evermore significant portion of the fanbase (& revenue) of the big clubs.
You’re second point is the key one, however. I simply cannot understand how the business people at Arsenal do not see that trophies generate incremental revenue for merchandise sales and sponsorship deals. The only way you can rationalize their approach seems to be that they believe the probability of winning a major trophy is so low in an increasingly competitive environment, that said probability times the incremental revenue it generates equals and expected lifetime value less than the 100% certainty of investing £X million in present value pounds.
But again, this seems hard to believe, particularly when you factor in the first point – fanbases are going global – but the further one is geographically from the club, the more one is likely to be influenced by winning and trophies than by grand-dad’s stories about the club. The club should be able to come up with an accurate assessment of the incremental revenue resulting from winning a trophy (TV & prize money is simple, then add an estimate of increased shirt sales, plus lifetime value of new fans captured, etc.). This leaves the key variable being the probability of winning after additional investment in the squad, and perhaps they think it’s low? Oh, ye of little faith…
Arsenal is a privately owned company, as are the other teams with whom we compete for the league title. I don’t know what kind of idealistic drivel would have you believe that these owners owe the fans anything! I suspect your problems lie more with the world in which we live.
Grow up, and perhaps expend your considerable intellect in comparing our club to other clubs, rather than some utopian vision you’ve concocted for the sake of your own vanity.
Please forgive the acerbity of my tone. You write a good blog.
It’s a business – the shareholders could have lost all their investment – they have a right to do what they want. Players get injured too – they have a right to ask for the highest salary possible.
Management matters…can’t someone get better performance from the money they have? AW does pretty well…wonder if we’ll see innovations like Moneybag come to soccer. To me, the Euros are not innovative enough…happy with not winning.
Being a sports fan is all about utopian visions of your team. That said, I find it odd that everyone focused on that rather than my rather realistic coming to grips with reality in the final paragraph
I suspect the reason is that the utopian vision is too similar to all of your utopian visions of how people like Robin van Persie “should be loyal to the club.” That’s surely my second point, why should we have so much outrage at the greed of van Persie and none at the greed of Lady Nina? At least van Persie did something on the pitch for Arsenal. What, exactly, did Lady Nina do? Not sell to the wrong guy?
Sorry, but it’s all the same to me. None of them have the loyalty that they claim to have.
Short of classifying football clubs as charitable or quasi-public institutions, which I think in itself is an interesting discussion, these football clubs have the same legal status as any other incorporated company. The Man Utd debacle is a perfect illustration of the virtually untramelled power of ownership in a free market economy.
Once this is accepted as factually correct, talk of ‘loyalty’ or benevolence is nothing more than an exercise in public relations. If these people fool you into expecting they share the same loyalty you claim to enjoy, then that’s your fault.
That Usmanov’s pathetically adolescent statement can strike a chord with some fans only tells me that some fans are stupid. No less stupid than those who swallow the propaganda of parsimony and claims of loyalty from a man (our gaffer) who is probably,courtesy of Arsenal, worth over 50m pounds and is, apparently, the highest earning manager in the country.
And, ultimately, we who fill the terraces and the club’s coffers, are only loyal to the extent of our enjoyment and self-interest. That is the reality in football as it is in politics and economics. Denying that, with false notions of magnanimity and piety, is merely the sign of a hypocrite.
Things are getting a bit financy here these days. What happened to Shakespeare and drugs and naked ladies and booze and crazy speculation about transfers? And Van Halen?
You left out Bob Marley and the Spliffettes.
You cab’t buy weed & pussy with Disney dollars!
I dunno. I invest an awful lot monetarily in a lot of different things. I am very dispassionate about it all, as one must be, of course. I love only three things in life, one is my family, the other is my girl, and the third is Arsenal. These things i can never be dispassionate about. I hope Arsenal gets a bunch of money, an a bunch of players, and were I ever in a position to give to Arsenal myself, I would.
I don’t think the board have escaped criticism as you seem to think. But even if that is so, compared to players who want to enrich themselves, perhaps it is because nobody really thinks they love the club.
There are also some examples of them not making purely self enriching decisions. Not taking dividends out of the club, not selling to someone paying the higher price, and even their initial opposition to selling to Kroenke. ( I feel they sold to Kroenke only to stop Usmanov’s hostile takeover)
I disagree with the contention that them making money off of shares is akin to them taking money out of Arsenal. Arsenal has their own money, the board have theirs. If it’s purely about Arsenal getting extra funds. Sure, how can anyone object to that. Except it would make me a hypocrite, because I don’t expect or want anyone to gift Arsenal anything. I don’t believe in free lunches, and I don’t believe anyone would just give money to Arsenal with no motive of personal gain. Which is also why I don’t trust Usmanov.
Kroenke aims to make money out of Arsenal. He already does through the online business. Fair enough. At least he’s not promising us funds for no reason. He has an incentive to at least keep the fans interested. As you say, he’ll have no interest in a rights issue. Why would he want to spend more, or risk diluting his stake. Should he? That would be akin to giving Arsenal something at personal cost. Which again, I don’t believe ever happens. If he puts in that much money. He’ll have to find a way to take at least that much more out.
I don;t have a problem with the board making money. They haven’t taken Arsenal’s money and put it in their account. The only way they have done that is through their salaries, which I’m sure must be substantial. But I don;t expect them to work for free either. I don;t think they love the club like fans, but I do think being involved for a long period, in some cases, for generations, does give them, the closest thing that can come to love. Some of their decisions, and their drive in planning and seeing through the stadium move, deserves credit.
I haven;t really looked to understand how the TTV is calculated, because I suspect I wouldn’t understand it anyway. I just feel you are wrong about how big the gap is. How much difference would a few referee decisions make? The TTV probably disregards the impact of that. And well, despite everything, we finished third. Yes, 19 points behind, but 12 of those points were lost within the first 45 days of the season. If we get in most of our signings early, we have a realistic chance at the title.
I agree with everything except:
“enticed Robin van Persie”, personally I don’t think this is possible. Even if we had “invested” more last year (£50 million aside) and this year (Podolski and Giroud aside) I still believe he’d have been swayed by City anyway. They have a exceedingly talented squad, huge wages and his close friend Nasri. Hell, even if we had and we’d finished easy third/second, what would prevent a club like Barca deciding to make an offer, they also have a incredible squad, the largest wages below money-bag teams and his good friend Afellay?
Unfortunately it’s getting harder and harder to keep our best players, and sure “investing” might help, but unless you are winning/challenging you really can’t say anything for certain.
The lastest interview by Wenger almost made me phsically sick. ‘Arsenal policy works’ he said. How? By selling our best players every year? By replacing them with inferior players? This self sustainable model is well and good but at some point we have to invest in quality or we’ll be just another business enterprise and worse we’ll also be left behind on the footballing front. There is no doubt he is 100% behind the board’s self financing nonsense going by his latest statement. He does not have one hand tied behind his back nor has someone put a gun against his head. He is simply stubbornly against the idea of buying a world class player as it’s an insult to his coaching ability and possibly against his principle too. I’m sure the profit sharing clause in his contract has got nothing to do with this ‘profit first’ policy. After all he’s a man of integrity or so L’m told. All this moaning by Wenger reminds me of a child in a playground who got his toy snatched away and sand kick in the face yet would not do anything because it’s against his principle. The board and Wenger are a greedy bunch of cowards.
“profit sharing clause in his contract” ?
Sorry Tim but your understanding of cogo and finance seems like it was derived from multiple viewings of Wall Street. It would have been an interesting argument if you said that RVP has a greater incentive than the board to be “greedy” given the relatively short career-lives of pro footballers.
However, I think you were being a touch paradoxical by saying you like how the club is run responsibly yet you admonish board members for profiting from their investments. Taking money out of the club is completely different from selling shares to outside investors for a profit.
I don’t think Tim’s understanding of finance is wrong at all. He’s got the mechanics of it right, and I understand the argument (I, like Wenger, have a Masters in Economics, *toot toot*). The thing most people are getting in a twist about is the idea that the board members have ‘taken money’ out of the club. They haven’t – they’ve capitalized on the increased size and profitability of the club by cashing in on their shares. Which they are entitled to do. To not take dividends out, I think, is a credit to them.
However, I see Tim’s point that a club is not just another business, it is a labor of love, and that reinvesting those profits made from selling their shares into the club would’ve been a wonderful gesture and one befitting a thing that they say they love. But I don’t know if something like that has precedent in sports – does it? Has there been a situation where regular shareholders and owners cash out, only to invest part of that profit back into the club which they now have no stake in?
Football is a business. You apparently know nothing about a business. Business should not be emotional and this is an emotional appeal
Tim, you are very, very wrong about Danny Fiszman!
He was a dying man, who had to decide between, Kroenke (whom he knew, A.B. Usmanov and the devil he did not know, when the executor would be told to sell his remaining shares. The selling of shares has no effect on The Arsenal cash balances.
In MVHO, Mr Fiszman in order to defend his faith and the future in The Arsenal, chose the lesser of two evils.
David Dein bought HIS shares from the much derided (by morons) Peter Hill Wood. In turn, David Dein with the problems of his futures market in sugar, had to find a buyer for a block of his shares, which proved to be Mr Fiszman. If David Dein is applauded for Mr Wenger, then Mr Peter Hill Wood should also be anointed for taking Mr David Dein into the Board room.
Tim, you need to look at with whom, you fraternize with? Check AST Board, look at Tim Payton and then check the sportsthinktank.com link! What oilmen would call a “blowout”?
Agree with u wholeheartedly with all the points in this article. Been a while since that happened.
The biggest problem is the lack of knowledge anyone has. Any paper can pull out a story with a “club insider” – The Mail tend to do this best, when they publish a totally unverified pile of tosh on which they don’t even have the guts to put the name of their journalist, just a blanket of “Sportsmail Reporter”. But you can’t really blame these hack journalists (yes I am writing an article having been sat in my bedroom for four days in my pants like a true blogger!) because they want to write about it but can’t because of the club’s lockdown on information.
Red and White Holdings have obviously caused a storm with their open letter, but I don’t want to get bogged down in the details of that because I am not aware of enough of the facts or truths of it, and it would be irresponsible of me to do so. However, from an uninformed perspective, a number of the points did strike a chord, even if it was deemed opportunistic.
The club’s lack of transparency is the real problem. I understand that Mr Kroenke has this “Silent Stan” reputation to protect, and he doesn’t want to open himself up to abuse, but I really feel his silence is damaging his own reputation more. Most importantly it is damaging Arsenal Football Club. There was an excellent article by Amy Lawrence about the damage done by the boardroom rift. (Ed’s note – for html coding reasons I won’t bore you with, I can’t link to the article, so just google ‘Amy Lawrence Arsenal Owners’ and it will show up at the top of the list) It is obviously causing the players to feel that the club is unstable, and I don’t even know if Arsène Wenger is fully aware of what the plan is.
The worst thing for the supporters is not knowing. You just have to look at any forum or comments section to see people tearing strips off each other about various hypotheses and what might happen. A lack of information tends to lead to people becoming hysterical.
The Club are their own worst enemies, though. Arsenal.com seems to win awards hand over fist for being such a good website but, if Alistair Campbell was half as good as the Arsenal spin team, Tony Blair would still be grinning smugly and probably be facing 98% popularity ratings as he becomes PM of Europe and the Euro problems have disappeared because they have accepted the Pound! There are a number of things that stink about the current Arsenal setup – the ‘new’ badge was the start of commercialisation but a necessary evil; at least we still play in red and white (and blue) unlike the Cardiff situation.
The real pet peeve of mine is the stadium announcements of seat numbers. This has been addressed by the Chief Executive and he said it is because “the club get complaints from fans who couldn’t get tickets. With all due respect, this is utter nonsense. I bet the first thing Mr Gazidis looks at on a Monday morning is the REAL attendance. This is about the most important factor for the club because it is such a key figure in terms of revenue and fan satisfaction. After all, if people are shelling out £30-60 on tickets and not even turning up, it speaks volumes. The club don’t want this information to be shared because it can be interpreted. This sums up the club’s media policy. Oh, and anyone who ‘likes’ Arsenal on Facebook will be aware that they only update on the score when Arsenal score. This is so pathetic. A good example of this would be the 8-2. You would have got an update at half time saying “GOAL Walcott has scored, 3-1”, then have to wait until the 74th minute for “Goal RvP has scored, 7-2”. I take back pathetic, pathetic doesn’t cover it. How about pitiful, tragic or moronic.
It is slightly different with transfers, I like that Arsenal keep quiet about how much they spend on players, sell players for and the salaries; it shows class.
Whether Stan Kroenke is looking to asset-strip Arsenal, make a tidy profit by hovering in the Champions League positions, or just build up funds for if Financial Fair Play does take hold, then spend the enormous profit we have been making recently on making Arsenal unstoppable, it would be very nice to know.
Robin van Persie said it best when he said “This is an update for the fans about my current situation. I have kept quiet all this time out of respect and loyalty for the club and as agreed with Mr. Gazidis and Mr. Wenger, but since there is so much speculation in the media, I think it is fair for you guys to know what’s really going on at the moment.”
Come on Mr Kroenke, Its good to talk!