What will Stan's terms be?
For the last year, ever since Arsenal begged Stan Kroenke to join their elderly board, and make them feel safe from Usmanov, the big Russian knocking on their door, I've wondered what Stan's terms would be.
Knowing that Danny Fiszman needs Stan more than Stan needs Danny, and knowing that the American turned them down last year, and knowing that he always negotiates from a position of strength, it was intriguing. On what basis would Stan join the board ?
Now we know. Friday's announcement said that E. Stanley Kroenke has joined the Arsenal board as a non-executive director but is NOT party to the lockdown agreement. That makes sense. Stan doesn’t want to sign up to that because he doesn't want to hand all his cards to Danny. He wants to play his own hand and maintain maximum flexibility. After all, he didn't get where he is today by allowing business associates to tie one hand behind his back. He is apparently free to sell his shares, but he can also buy their shares. In a worrying period of financial meltdown, Stan wants to protect his investment, so he needs to get closer to what’s going on in London.
So it begins to look as if Stan Kroenke is fighting the takeover, not Danny Fiszman. Looks like Lady Nina will sell her shares to Stan. Rich Brits who live abroad normally want to protect their privileges, the trappings of wealth, so if Lady Nina can sell her shares to Stan, and get two seats in the directors' box for life, she'll be happy.
Originally, Stan understood that if he bought the shares of ITV, Dein and Lady Nina, he would have 40% and control of the club.
Now we wonder : Why would a basketball fan want a soccer club 4,000 miles from his home? Sure, Stan could buy Arsenal and he would be a good owner, as I've said from day one. With his track record, and his billionairess wife, he could raise capital far more easily than the Glazers or Hicks or Gillet, even in a recession. His credit rating is very good. I'm sure it's A+.
Always remember this : Stan is a billionaire sports tycoon who lives in St Louis and goes to Denver to watch his basketball team play. His Denver-based executives joke that their boss has seen Arsenal play more often than he's seen the Colorado Rapids. The last time Stan saw Arsenal, he sat next to MD Keith Edelman, who was fired a few days later.
In 2007, Danny Fiszman and Peter Hill-Wood rolled out the red carpet for Stan, lunched him the Diamond Club, gave him a tour of the training ground, opened up the property portfolio, and said : Please join our board and our lockdown agreement. His attitude was : Why would I do that ?
In the future, if that invitation remained open, the question of his terms became crucial. I was told in June 2008 that Stan was ready to join the board, so it's taken them another three or four months to agree terms.
In 2008, Arsenal's position is weaker, so the English gentlemen seem to have said to this American gent: Please join our board, you can buy 29.9%, or, with our consent, the whole club.
Arsenal announced all this last Friday, so that it would be buried under an avalanche of Ryder Cup news and football team news.
There was no press conference to accompany this very significant announcement, partly because they still have no chief executive running the business. However, Hill-Wood talked to the Sunday reporters and again said :We want to stay British, Arsenal don't need any sugar-daddies, it has to be a sustainable business.
Meanwhile, the credit crunch is hurting everybody. Liverpool's new stadium is on hold, and insurance giant AIG, Manchester United's main sponsor, is now 80% owned by the Federal Reserve Bank. Big chunks of Manchester United's debt is to hedge funds who charge terrifying interest rates, especially if you do not repay within the agreed time-frame.
Arsenal's new Yank is a very shrewd long-term investor who almost never speaks in public or signals his intentions. Like Arsenal, Stan is opaque, so he can only be judged by what he chooses to do and what he chooses not to do.
Usmanov might be seething at this development, if he still cares. He knows that the Arsenal board is an invitation-only party. Maybe Usmanov will get bored. After seeing Kroenke join the board, he might shop around and find a buyer for his 25%. Somebody we’ve never heard of, who has a mountain of cash, who might want to buy the whole club.
Conclusion :
It's taken the credit crunch to make Arsenal to realise how they should use Stan Kroenke. They really needed the Yank to stand shoulder to shoulder with them against Usmanov. So, to get him on the Arsenal board, they've promised him something.
There are many future scenarios. Of those, I'm only going to consider two. In both, the starting point is 2011 because Arsene Wenger is under contract till 2011.
Stan Kroenke might look at Arsenal in 2011 and say : Wenger's not the only football coach in the world. OK, he's a lovely manager, he's transformed the club, he's done his thing for 15 years - but now we have to move on. I want to take Arsenal to the next level and we'll never do that with such a young squad.
So scenario A is : Stan will buy the club if Wenger goes. Scenario B, which is more likely, is that he’ll buy Arsenal if Wenger stays.
He now has an understanding with the board, so he’ll sit there till 2011. They’re on the same wavelength, at last. Stan is silent and very smart, but inaccessible. We can think of plenty of questions we'd like to ask Stan but what's more important are the questions Stan has to ask himself : Do I want Arsenal? If I do, at what price? Why would I buy Lady Nina’s stake unless I want the whole club? Should I wait till 2011 to see if Wenger stays? If he stays, should I buy the club? Do I want to work with this French guy ?
yazeez
** MiYaFuSHi **
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