Why should or would Stan Kroenke sell Arsenal Football Club?

Here for long haul?

The narrative of late for our club, bar Wenger and the FA Cup final, has been the bid for the club by Usmanov.

This was rejected by Stan Kroenke, who has since said the club is not for sale for any price.

However, I am not a financial analyst nor an accountant, so these following points need to be taken with big pinches of salt. Even still, I do believe there are some sound reasons why he won’t sell:

• Holdings

Arsenal is part of a holding company, named Arsenal Holdings PLC. This trades on the Stock Exchange, and thus is a public limited company. This is at the root akin to large UK-based firms such as HSBC, Glaxo, Diageo, BP, Shell/BG, or Tesco. They all, like ourselves, trade their equity on the stock exchange to raise capital and thus anybody can buy their shares. It’s the best option for any firm of a given size, which requires ready capital to sustain its operations.

We are not on the main FTSE exchange though, so you won’t see us being mentioned on Bloomberg or BBC news as part of the FTSE 100 anytime soon. We are on the NXE exchange, which is a minor exchange within the wider London bourses. Nonetheless, our equity/share capital is still openly available.

Our firm is split into various sections, including football operations (inclusive of the stadium, first team, youth and women’s teams), and the Highbury Square property sales. This in turn is owned by KSE Sports, Stan Kroenke’s holding firm in the USA, which also owns the LA Rams and Colorado Rapids amongst other teams.

Colorado Rapids among others

Now a holding firm extracts value from differing arms. Apple bought Beats headsets a few years ago. Google bought YouTube also, and Kraft obtained Cadbury in a similar period. The reasons were simple. They were all prime brands in their various sectors, and had immense value to provide. KSE/Kroenke naturally sees the value in Arsenal, whether monetary or in terms of his overall brand, and thus will not sell.

Holding firms are valued in many ways by the strength of their specific sub-entities. This also has advantages in raising capital, sustaining new operations, and essentially being strong overall. Another example of a holding firm is Unilever. Since Ben and Jerry’s Ice Cream is a top seller, it is strong leverage to obtain new operations or to make investments in other areas. Banks would see this as a boon, given the overall health of Unilever.

Not just a football club but a brand

Arsenal as it stands has the seventh highest turnover in the world. Chelsea may well overtake us for 16/17, whilst Liverpool and Spurs even may edge closer, but little will change apart from that. Our brand and market values are comfortably within the top ten in the world, whilst our global fan base is only bettered by the truly largest global giants such as Real Madrid, Barca, and Man United. Even with a poor season, there is no way Kroenke will let us slip easily, given these overwhelmingly positive metrics.

• Metrics

Speaking of metrics, investments often do, and arguably should, meet some pre-defined parameters. For instance, if one buys a house to rent out, then there are some factors one has to gauge. If it is in a good area, then renting it out to professionals could accrue a large degree of revenue. If it’s in a

Or if one invests in stocks, shares or bonds, then one would do so with a desired return, or rate of fluctuation.

It’s the same when buying a business. Yes, we’re not in the Champions League next season. However, we may still make enough revenue to ensure we are a viable investment for Kroenke. He would have defined how much value we will add given defined metrics, and we’re hitting them.

Accordingly, if we are still within his scope or limits, why would he sell? Granted, we don’t know what those limits are. But then there is no reason to think that a lack of Champions League football for one season will limit his scope or worsen his investment.

KSE Sports seems to be geared towards building financially sustainable organisations that provide the fullest monetary value. If there is a positive of KSE’s ownership, it’s that the club is unlikely to be mismanaged financially. Our debt levels are sound, and our revenues will continue to grow. With the Premier League TV deals enlarging revenues, then this is another reason Kroenke won’t sell up quickly.

For those who are Wenger Out, there is a shred of comfort, prospectively. Kroenke did sack a manager in one of his US teams for bad performances. I am Wenger Out also, so maybe, maybe, he will do the same here.

Dynasty?

Nonetheless, he is here for the long haul. And generally speaking, most holders who desire a long-term strategy place close family members in senior positions. Isn’t Josh Kroenke, Stan’s son, on the board? We could be looking at a dynasty akin to the Hill-Woods, who owned Arsenal for decades in the 20^th century. Seems depressing? Well it could happen. The Kroenkes won’t go very easily, that is for sure.

Dave Seager

Passionate fifty-something Arsenal supporter who has been making the journey to N5 regularly since the early 1980s – although his first game was in 1976. Always passionate when talking about The Arsenal, Dave decided to send a guest blog to Gunnersphere in the summer of 2011 and has not stopped writing about the Gunners since.

He set up his own site – 1 Nil Down 2 One Up – in February 2012, which he moved on in 2016 to concentrate on freelance writing and building Gunners Town, which he launched with Paul in 2014.

The objective of GT was to be new and fresh and to give a platform for likeminded passionate Arsenal fans wishing to write about their team. Dave still of course, writes for the site himself and advises the ever-changing writing crew.