The Arsenal board should buy out Kroenke
It’s been a while since I last talked about Arsenal (the whole Usmanov vs bloggers thing has really taken off though), and with positive news to report this time, let’s not waste time and get right into it, shall we?
For starters, if you’re up for some reading, here’s the report from arsenal.com (PDF) (press release, rather) detailing the current financial situation. If you just want a short review, then here it is in four words:
Arsenal are fuckin rich.
In practical terms, the money will mean little in the short run. Arsene Wenger is not one to spend rashly, no matter what the amount of money available to him and he’s a creator, not a builder or a jigsaw puzzle artist. His vision for Arsenal is stubborn and it does not involve shelling out 25-30m for Samuel Eto’o, not when he sees Adebayor and Robin van Persie growing season upon season.
In the long run the money has benefits but not without potential problems. one hand, it means that Arsenal’s debt will be wiped out with ease and the club will always have money to reinvest. On the other hand it will only attract more billionaires (some like Usmanov, others like Kroenke) who will want the whole pie to themselves. It’s not something restricted to Arsenal but considering that Arsenal are the richest club in England that haven’t been taken over AND are playing in the ‘richest league’ in the world, the financial numbers are the strategic equivalent of painting a bright bulls-eye on Arsenal’s heart.
Usmanov’s faux pas (or that of his lawyers) has generated a lot of ill-will against him amongst Arsenal supporters and I doubt that he will be able to complete a hostile takeover, especially since the Arsenal board will be far more resilient to any takeover attempts as compared to the Manchester United board. The recent changes at Chelsea will also serve as a reminder for fans that rich owners do not always contribute to club harmony. The possibility that Wenger could be dismissed by the board is something the fans will not accept and as a result Arsenal’s chances of being taken over are quite low.
In that light then, the press release is a statement of intent for the current Arsenal board, their move to show the supporters that they are responsible for bringing good results (financially) to the club. But while this protects their current position it doesn’t do much for the future. Their next step should be a bold plan to secure more Arsenal shares under ‘friendly’ control - and if that means dealing with Kroenke, so be it. I’m sure that with the money being generated, the board can consider investing further into the club and offer to buy out Kroenke.
You can bet your house that Usmanov will do so, if he hasn’t already. Best for the board to move first and eliminate the possible threats to Arsenal instead of dealing with them later down the road.
- Why isn’t the Arsenal board going on the offensive?
- David Dein really loves Arsenal, doesn’t he?
- The Arsenal board are blind idiots
- In opposing Kroenke, is the Arsenal board acting in Arsenal’s best interests?
- Arsenal board choose Kroenke as lesser of two evils
Discussion - 7 Responses
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Wouldn’t make much difference mate, ok the club buys back Kroenkes shares but its going to cost circa 75m (all our current cash reserves) at the current share price, a price thats inflated anyway and could drastically drop 20% or so easily when the current situation settles.
In fact doing this could even play into Usmanovs hands as even after buying back these shares Usmanovs shareholding would increase from 21% to 24% and not only is he closer to the magic 50% mark but in fact it would cost him less to reach that figure and less again to get to the ultimate threshold of 75% that could enable him to wreak havoc with our balance sheet if he desired by placing his own debt on the clubs books.
The board can’t purchase any shares for the time being, as part of that year lock down agreement. Not only did it mean they couldn’t sell shares, it also meant they couldn’t buy shares.
RearGunner I think the author was meaning the club itself buy back the shares, this ‘lock down’ agreement probably isn’t worth the paper its written on anyway but irregardless I don’t think it would cover the scenario the author is talking about however unlikely I feel the suggestion is.
Its a tough decision to make. Better the devil you know than the devil you don’t? Where are the responsible members of the Arsenal gonna get the money to buy him out? Does he want to be bought out?
Maybe it’ll turn out to be an old school cold war b/w the american & the russky, duking it out for takeover bids. This is a good news/bad news time for the Arsenal board.
To be fair i think you’re over-exagerrating the ‘bulls-eye’ theory. It is a valid theory but you are basing it on a logical set of principles that you presume a lot of rich people have. There are a hell of a lot of unknowns at this point & the board has to tread carefully & keep its cards close to its chest.
One thing you didn’t think about, much less mention, is what happens when this ‘lockdown’ agreement ends next year & every share is fair game again? I’m sure the 2 billionaires will want to position themselves for the stampede that will result when the gates fly open in that horse race & they won’t mind waiting when that time comes.
I think the board does have to spend the time until then to convince the smaller shareholders to stay in it for the long haul & try to come to sort of agreement with Kroenke. You are definitely right about that & at least the guy has SOME experience dealing with sports clubs.
They only need to purchase shares to enable the directors to get to 50%+. Much more affordable and is the only thing required to stop him.
Why should they buy out Kronke? They should buy out Usmanov instead(which will be impossible). Keep both the devils to counter each other……….
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