Arsenal and Stan Kroenke: This is a sad, sad day

Stan Kroenke has made a £600 million offer for sole ownership of Arsenal football club, which Alisher Usmanov will accept. This is a sad, sad day indeed.

Stan Kroenke is set to become the sole owner of Arsenal football club. The American, who has been the majority shareholder of the club since April 2011 and has held a place on the board since 2008, submitted a statement to the stock exchange confirming a £600 million transaction to purchase the remaining shares of the club, including the 30% owned by Alisher Usmanov.

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For those who find this financial ruse quite confusing, the basic details are this:

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• Kroenke owns 67% of the club
• Usmanov owns 30% of the club
• The remaining 3% are owned by a wide range of minority shareholders, all of which will be forced into a compulsory sale once Kroenke tops 90% worth of shares, which he will do with Usmanov accepting his offer.
• The offer, to Usmanov, is worth approximately £550 million. The remaining shares cost a further £50 million, bringing the total to bid to £600 million, which values the club at £1.8 billion.

That is the basic meat and bones of the process. It is the ramifications of it that make it so troubling for the future of the club.

As the Arsenal Supporters’ Trust stated, ‘this marks a dreadful day for Arsenal football club.’ And in their excellent statement, they detail some of the enactions that Kroenke will now be able to achieve as sole owner of the club:

"Pay management fees and dividends without any check or balance.No Annual General Meeting to hold the Board to accountRemove the Independent DirectorsPlace debt onto Arsenal to support his other business interests"

All that is true. It must be said that some of the things that fans have complained about, like being able to make decisions without being held accountable, are things that Kroenke has already done anyway. The Annual General Meeting, for instance, is a brilliant way for fans to voice their concerns, but it doesn’t really have the influence on the running of the club as some would like to believe. But Kroenke will certainly have more autonomy to do what he wants now, and, given his history, that’s not something to be happy about.

Another major issue is that this bid is a leverage buy-out. Basically, Kroenke will use a loan to buy the club. If he can keep up with the repayments, then it is not really an issue. Anyone who has a mortgage has used a very similar mechanism to afford a substantial purchase. But as we have seen time and time again with owners in the past, when they make loans to buy clubs, it often signals a greater, underlying problem that comes to the fore years down the line with disastrous effects.

A final point to consider is the potential exit of Ivan Gazidis and the growing power, influence and position of Josh Kroenke, who could be positioning himself to be Arsenal’s Chief Executive if/when Gazidis departs. For all those that are concerned that Gazidis is not a ‘football man’, those worries are compounded ten-fold when it comes to the son of the owner and someone who has shown little football acumen thus far.

This is a momentous day for Arsenal football club. And not in a nice way. It will change the very fabric of this organisation, from the top down. It will shake the very foundations that it is built on, it will change every minute detail, all now being sculpted in Kroenke’s image. This is a sad, sad day indeed.