Arsenal investor Alisher Usmanov "failed with two dramatic late offers on Sunday night to prevent Stan Kroenke from taking control" of the club, according to Jeremy Wilson of the London TELEGRAPH. Usmanov was "completely unaware of Kroenke's move to take full control of the club until Sunday," and when he was informed that Lady Nina Bracewell-Smith "had agreed to sell her pivotal 15.9 per cent stake to Kroenke, he attempted to derail the deal." The deal with Kroenke will value her shares at $189M (all figures U.S.), though she would have received a total of $209M for her stake "had she accepted Usmanov's late offer." Usmanov will now "carefully study the wording of Lady Bracewell-Smith's commitment to Kroenke but is understood to be 'livid' at the way club directors past and present have delivered control" to Kroenke (London TELEGRAPH, 4/12). The GUARDIAN's Matt Scott reports Bracewell-Smith rejected Usmanov's offer, worth about $2,030 more per share than Kroenke's, "because she had given her irrevocable agreement to sell her 15.9% stake in Arsenal to Kroenke." Kroenke "has not used the club's assets as security to raise the money for his purchase, unlike Malcolm Glazer's 2005 buyout of Manchester United." But there is "nothing in a long list of undertakings to prevent Arsenal's new owner using multimillion-pound annual dividends from the club to service any debts he may have secured against other assets in his investment portfolio." In addition to the "possibility of using dividends, Kroenke will have access to Arsenal's unrestricted cash reserve, which is approaching" $163M. A source close to Kroenke "sounded a supportive note for the American, saying he had not used debt to finance acquisitions in the past." The source: "Kroenke is not a Glazer." Scott notes Usmanov "has yet to decide whether to sell his stake" in Arsenal (GUARDIAN, 4/12).
DOES KROENKE HAVE GOOD INTENTIONS? The GUARDIAN's David Conn notes the sale is happening now "partly" because Arsenal investor Danny Fiszman is "seriously ill." But there is "reason to be cautious" about the deal. Kroenke's company is "registered in Delaware, where there is no tax to pay and next-to-zero transparency." There are "no guarantees" that Kroenke will not take money out of the club, nor does it appear Kroenke "intends to put money into Arsenal itself, only to pay his millions to the outgoing shareholders." Conn: "The American may indeed turn out to be a long-term, competent owner of this club of grand tradition. He may not turn a quick fortune for his Delaware holding company. But the word 'custodian' is being debased and its principles need to be reclaimed" (GUARDIAN.co.uk, 4/12). The FINANCIAL TIMES' Roger Blitz writes Kroenke "appears keen to keep the fans onside and, on Monday, his Kroenke Sports Enterprises company began the task of placating them, albeit with caveats." KSE said that it "would not seek to delist Arsenal from the Plus exchange, London's third-tier market, but that there might be insufficient liquidity to maintain a market in shares." The company added that it "would not squeeze out minority shareholders." But "what will cause most anxiety among the club's supports is how Mr. Kroenke will finance the takeover," as "full acceptance of the offer requires him to stump up" $640M in cash. KSE said the offer would "not be funded by way of any debt finance ... for which the payment of interest on, repayment of or security for any liability ... will depend on the business of Arsenal" (FINANCIAL TIMES, 4/12).
KEEP FANS INVOLVED: The London TELEGRAPH reports the Arsenal Supporters Trust "will not be selling their shares" to Kroenke. More than 100 AST members "met in London on Monday night to discuss the proposed takeover." An AST spokesperson said, "Arsenal is too important to be owned by any one person." The AST is "not against Kroenke's takeover but their support is strongly dependent on the retention of fan involvement in the ownership of the club." AST officials met with Arsenal CEO Ivan Gazidis and "received assurances that Kroenke recognises the importance of a supporters' stake in the club" (TELEGRAPH.co.uk, 4/12). U.K. Secretary of State for Culture, Olympics, Media and Sport Jeremy Hunt "has urged" Kroenke "to retain and strengthen fans' involvement in the club's ownership structure." Hunt: "I have no problem at all with foreign ownership. I think we have the best Premier League in the world partly because there have been some very rich foreigners prepared to invest in making it the best in the world. What matters is not the nationality of the person investing but the intentions of the person investing" (GUARDIAN, 4/12). Meanwhile, in L.A., Grahame Jones wrote, "In case the English have not been paying attention -- always a good bet -- that means one-quarter of the Premier League is now in American hands, with the top three teams each being in U.S. control, Liverpool (John Henry) and Manchester United (Malcolm Glazer) having previously been acquired." Jones: "Add in Aston Villa (Randy Lerner) and Sunderland (Ellis Short) and it makes a mockery of the long-espoused MLS argument that American money would never invest in a league that allowed promotion and relegation" (LATIMES.com, 4/11).
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Kroenke becomes latest American to take
control of one of EPL's marquee teams |
STRONG, SILENT TYPE: The GUARDIAN's Owen Gibson notes both Kroenke and Glazer are "media-shy U.S. moguls," but Kroenke "will insist that it is there any similarities with Malcolm Glazer end." And so far, Arsenal fans "believe him." Over the past two decades, Kroenke "has strategically assembled a portfolio of U.S. sports franchises and related businesses, and set about trying to make them work together in a coherent way." Kroenke is "well regarded in American sports business circles for his long-term investment decisions." His "fellow NFL franchise owners in effect amended their rules for his benefit, allowing him to take full control" of the Rams (GUARDIAN, 4/12). The WALL STREET JOURNAL's Clegg & Futterman write Kroenke is the "anti-Mark Cuban, an owner who rarely speaks out and does all he can to remain out of the public eye." Inner Circle Sports Principal Rob Tilliss: "He's known for having really good managers and letting them do their jobs." But Kroenke also "appears to be shying away from overspending on glitzy stars," as the Nuggets "recently traded high-priced All-Stars Carmelo Anthony and Chauncey Billups" to the Knicks (WALL STREET JOURNAL, 4/12). MLS Commissioner Don Garber said Kroenke is a "strong, silent type." Garber: "I think that's not necessarily the worst thing when it comes to sports team owners. He's very loyal. He's a very quiet and a strategic thinker. He doesn't make rash decisions." But in N.Y., Jack Bell wondered, "Is Kroenke likely to agitate for changes not only in the board room, but in the manager's office? Has Arsenal in recent years lost some cachet as it has avoided long but lucrative preseason tours to the United States and elsewhere?" (NYTIMES.com, 4/11).
