SBD/Issue 135/Franchises

Gazidis Endorses Stan Kroenke's Increased Role With Arsenal

Gazidis Believes Kroenke's Increased Role
A Long-Term Value Proposition
EPL club Arsenal CEO Ivan Gazidis has endorsed Kroenke Sports Enterprises Owner Stan Kroenke's "potential ownership qualities," according to Jeremy Wilson of the London TELEGRAPH. Kroenke, who last month increased his stake in Arsenal to 20.5%, also owns the Nuggets and Avalanche, and Gazidis said, "He is an excellent owner in the other sports he has been involved in. I think he does have an affection for the club, I think he believes that it is a long-term value proposition." Meanwhile, Gazidis also "signaled a willingness to heal divisions between the board and other prominent shareholders." Despite owning more than 40% of the club's shares, Arsenal investors Alisher Usmanov and Nina Bracewell-Smith are not represented on the club's BOD and reportedly were "surprised by Kroenke's" move to increase his shareholding. Gazidis has "already opened dialogue with Usmanov and his business partner," London-based businessman Farhad Moshiri, and "did not rule out the possibility of them receiving boardroom representation." Gazidis: "We are still getting to know Mr. Usmanov better, I have spent some good time with him." Also, Gazidis said of Bracewell-Smith, who "was ousted from the board" last December, "She is a significant shareholder and she deserves to be treated as such" (London TELEGRAPH, 4/1).

STAN THE TOP MAN? Kroenke acquired his shares from Arsenal investor and BOD member Danny Fiszman, but Gazidis indicated that the transaction will not have an "impact on the day-to-day running" of the club. Gazidis: "It's business as usual. It's a transaction between two Board members, both of whom believe in the philosophy of the Club, the self-sustaining philosophy on a day-to-day level." Gazidis said of Kroenke's role with Arsenal, "He has developed a good relationship with the other members of the Board. I think the fact that Danny has felt comfortable selling his shares to Stan speaks volumes. This is somebody that shares the same philosophy as the current board and will be influential as we go forward" (, 3/30). However, an Arsenal source said, "This is a major play en route to a scenario where Stan is the major shareholder in an Arsenal regime run by a Kroenke-Fiszman partnership" (London INDEPENDENT, 3/31). But Fiszman asserted, "I have no current intention to sell any more of my shares in the Club." Fiszman added, "I believe that Stan's increased holding is a positive development for the Club" (, 3/30).

BRACE YOURSELF: ESPN SOCCERNET's Phil Holland writes Usmanov "may not regard the current climate as the best time to launch a takeover" of Arsenal, and whether his relationship with Kroenke "develops into a full blown civil war looks set to depend" on Bracewell-Smith, who retains a 15.9% stake. The question is "whether Bracewell-Smith is prepared to sell and, if so, to whom will she choose to deal?" Will the "argument that saw her leave the board play into Usmanov's hands, or will she stay loyal?" (, 4/1).

Could Newcastle United Sink
Into Administration If Relegated?
STILL KICKING: Newcastle United Monday "dismissed talk that relegation" from the EPL would "see the club sink into administration." Newcastle Managing Dir Derek Llambias: "It's ridiculous, unfair and unfounded, and it's upsetting because there is no truth in it." The club currently is 18th out of 20 EPL teams, which would qualify for relegation, and Llambias said if the team is relegated, "We'd have to restructure our own business plan like everybody else. But our finances are strong, and there would be no threat of administration" (, 3/30). Meanwhile, English Football League Championship club Southampton's parent company, Southampton Leisure Holdings, today "suspended its shares as the cash-strapped company teetered on the brink of administration." The company "failed to agree [to] an extension of its overdraft" with Barclays Bank and accounting firm Begbies Traynor. The club "has struggled" since it was relegated from the EPL in '05, and it is understood it "will have to wait until the end of the summer to find a buyer or face bankruptcy itself" (, 4/1).

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