Does £300m worth of debt sound good to you? How about £500m worth of bank loans whose interest takes up a large proportion of a wealthy club’s profits? No, it doesn’t sound too appetizing to me either. These are the sum totals of debt that two separate American consortiums have saddled on two of the world’s most wealthy clubs. Now the same menace haunts the boardroom at the Emirates Stadium where a certain man from Missouri wants to buy an English “soccer team” estimated to be worth £400m.
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. Others would have you believe that there is no takeover imminent, such as board member Danny Fiszmann and Chairman Peter Hill-Wood.
Both assumptions are wrong; the real issue at hand is the dangerous rivalry which has been going on in the board room since the departure of David Dein as vice-chairman in 2007. The acrimonious split, based around Dein’s anger at the lack of spending power that the Arsenal board were prepared to hand Arsene Wenger, has grown ever deeper in the two year period. In recent times, Dein has described Arsenal of living in the “stone age” compared to other top flight clubs, that Arsenal’s conservative business model is allowing other Premier League clubs to catch up while they are standing still. An accusation disputed by others on the Arsenal board such as Fiszmann and Hill-Wood who believe paying off the club’s debt over the new stadium was the priority.
What has fuelled the rivalry is the share gathering which has allowed Stan Kroenke to acquire an almost controlling stake in the club. 29.6% is 0.3% away from initiating a takeover bid for the club. Danny Fiszmann started it all off by selling 659 shares to Kroenke two years ago. This inevitably led to a response from Dein who did not want Arsenal to fall into American hands. But to finance his own share buying, he needed a wealthy backer, a Russian oligarch by the name of Alisher Usmanov was the answer, a man who has acquired 23% of the club up until the present.
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.
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.