Arsenal put Kroenke in position to take over club
Friday 20 June 2008
Stan Kroenke is in advanced talks with Arsenal's hierarchy about a deal to put him in pole position to take control. The American billionaire, who owns 12 per cent of the shares, will take a place on the club's board within weeks. Crucially, he will also be given first refusal on a majority of the club's shares for the next four years.
Kroenke will not own a controlling stake in Arsenal just yet. The "friends and family" group of core directors, headed by Danny Fiszman (24.1 per cent owner) and Lady Nina Bracewell-Smith (15.9 per cent) have shown no appetite to sell, immediately at least.
But the deal will put Kroenke in the box seat to buy control later, raising the chances that he will follow in the footsteps of his fellow American Premier League club owners the Glazers (Manchester United), Tom Hicks and George Gillett (Liverpool) and Randy Lerner (Aston Villa).
The Independent can reveal that Arsenal first tried to persuade Kroenke to accept a seat on the board last autumn, hoping to announce it at their October AGM. The board wanted to send a strong message to the Uzbek predator, Alisher Usmanov, that, given a choice of billionaire investors, they preferred Kroenke to Usmanov.
But Kroenke was in no rush, understandably given that Arsenal's chairman, Peter Hill-Wood, had at first been so sniffy about Kroenke's initial purchase of 9.9 per cent of the club.
As recently as April of last year, Hill-Wood said of Kroenke: "Call me old-fashioned, but we don't need his money and we don't want his sort... [Americans] know absolutely sweet FA about our football."
Relations between the board and Kroenke have since warmed, in no small part due to the bridge-building work of the influential Arsenal Supporters' Trust, which has the ear of all the major parties. The AST has been in dialogue with Kroenke for more than a year. Kroenke hosted the AST on a trip to Denver earlier this month, and, in recent correspondence, the AST urged him to seize the opportunity of a board role, as long as it is for the benefit of Arsenal.
Kroenke has talked privately of his "strong commitment" to football, and to Arsenal, long-term. His track record as a sports patron boosts his credentials. He owns or controls teams in America's NFL, NBA and NHL, as well as owning the MLS's Colorado Rapids. He has never sold a share of any team he has invested in. He has spent heavily on a stadium and youth facilities for the Rapids. He sees huge potential for the Gunners to be marketed worldwide, and appreciates Arsenal's excellent reputation.
When Kroenke becomes an Arsenal director he will become party to the privileges of the "lock-down" agreement governing the "friends and family" shares. That will give him first option on buying other "lock-down" shares (the 45 per cent owned by Fiszman and Co) until 2012, as and when they sell. It is highly likely portions of those shares will be sold to Kroenke in that time.
Kroenke's place on the board will send a clear message to Usmanov – who owns a fraction under 25 per cent – that the board will do anything to stop Usmanov getting a controlling stake.
"Stan's seat on the board is weeks away, it's just a case of dotting the 'i's and crossing the 't's," an insider said. That view is backed by sources on both sides of the Atlantic.
The news will be a major blow to the ambitions of the former Arsenal vice-chairman, David Dein, to return to the club. Dein sold Usmanov his shares in the club (almost 15 per cent) last August, hoping to return to Arsenal under an Usmanov regime.
But Usmanov has no track record in football and his intentions are unclear. He continues to buy up as many of Arsenal's 62,217 shares as he can. The Independent understands he bought a single share last Friday, four others last Thursday, and seven a week ago on Monday, at prices between £8,500 and £8,800 each.
It seems he is desperate to take his stock just above 25 per cent, at which point he would have a "blocking stake". That would not hinder any day-to-day club activity, but could become a nuisance if the board needs more than 75 per cent of votes to implement special resolutions, for example to restructure debt, or issue new shares.
Kroenke is attracted by a board role about which he has been informed: "Your experience in property development, sports marketing and TV rights will undoubtedly add value to the board."
He will have input on commercial, media and club development matters, and he will also be able to have a say on what kind of executives Arsenal require to replace Dein (who was an excellent "fixer" on all kinds of club business), and Keith Edelman, the recently departed managing director. Arsenal have already appointed City head-hunters to find candidates.
Most significantly, Kroenke will accede to the all-important "lock-down" agreement, which means board members can only sell to each other (or family) until 18 April 2009, and must give first refusal on their shares to each other (in effect, to Kroenke) until 18 October 2012.
Such a "kingmaker" pact in Kroenke's favour could put Usmanov on a civil war footing: he remains firmly on the outside, despite owning a quarter of the club. Preferably for Arsenal, it might force Usmanov out of the picture.
The billionaires with Gunners in their sights
Name: Stan Kroenke.
Nickname: Silent Stanley.
Wealth: $2.1bn (£1.07bn).
Made his money Mainly in real estate. Married to Anne Walton, independently wealthy as a Wal-Mart heiress.
Owns: 12.38 per cent of Arsenal.
Sports ownership pedigree: St Louis Rams (National Football League), Denver Nuggets (National Basketball Association), Colorado Avalanche (National Hockey League), Colorado Rapids (Major League Soccer).
Shady past? Absolutely not. Hard to find anyone with a bad word to say about this private family man who has a good record as a sports club owner.
Allies at Arsenal: The current board, it would now seem, who view him as a safe, steady investor who won't push too hastily for control.
Nickname: Hard Man of Russia.
Wealth: $5.5bn (£2.8bn)
Made his money Mining, metals, lumber, investments.
Owns: c24.9 per cent of Arsenal.
Sports ownership pedigree: None. But his Metalloinvest firm has a sponsorship deal with Dinamo Moscow (since Feb 2008).
Shady past? Says that a six-year jail sentence in the 1980s was because he was a "political prisoner". His London defamation lawyers, Schillings, will deal with any inquiries to the contrary.
Allies at Arsenal: "At Arsenal" no longer applies, but David Dein, the ousted former vice-chairman, is his main Arsenal-related advisor. Dein sold Usmanov 14.58 per cent of the club last year, hoping to return to the club in some capacity in anUsmanov buyout.
Who owns Arsenal shares?
Red & White Holdings (Alisher Usmanov) c.24.9%
Danny Fiszman 24.1%
Lady Nina Bracewell-Smith 15.9%
Stan Kroenke 12.38%
Richard Carr 4.375%
Other board associates, family and friends 4.7%
Peter Hill-Wood 0.804%
Lord Harris of Peckham 0.085%
Ken Friar 0.076%
Sir Chips Keswick 0.064%
Keith Edelman 0.040%
Remainder of shares (split between 1,400 individuals) 12.57%
Premier clubs in US hands
ASTON VILLA Randy Lerner took over in Aug 2006. Also owns the NFL's Cleveland Browns.
LIVERPOOL Tom Hicks and George Gillett took over in Feb 2007, but their relationship turned sour.
MANCHESTER UTD Malcolm Glazer gained control in May 2005. Also owns the NFL side Tampa Bay Buccaneers.
Latest in Sport
Floyd Mayweather vs Manny Pacquiao: The biggest fight of all time, or maybe just the most lucrative?
Andy Murray tells how coach Amélie Mauresmo revealed her pregnancy
What time does Floyd Mayweather vs Manny Pacquiao start?
Everton 3 Manchester United 0 player ratings: Who scored lower - Marouane Fellaini or Radamel Falcao?
Floyd Mayweather vs Manny Pacquiao: What time does it start and where can I watch it?
- 1 Migrant crisis: Greek soldier saved 20 people singlehandedly off Rhodes beach
- 2 Sofyen Belamouadden murder: The inside story of a crime that horrified Britain
- 3 UK weather: Britain braced for snow as arctic air mass moves in
- 5 'Isis' schoolgirls: Missing British teenager tweets picture of her Syrian takeaway
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove