Alisher Usmanov is selling his shares in Arsenal FC, meaning that Stan Kroenke’s shares of the club reach 97.11%. As a result, this puts the remainder of individual shareholders at threat. Kroenke could soon have complete ownership of the club, to potentially disastrous effect.
Stan Kroenke To Gain More Arsenal Shares
Window
There is no doubt that Kroenke will attempt to buy the remaining shares. However, due to stock exchange rules, he must make an offer for the remaining shareholders to buy the final shares. This provides a short window in which shareholders can make offers. If no offer is made for the remaining shares, then Kroenke could make a compulsory purchase to get the remaining shares.
Consequences
After Kroenke has 100% shares, he would be able to re-register Arsenal as a PLC in Delaware. Arsenal Supporter’s Trust released the following information. They state that Kroenke will have the power to “implement the following detrimental actions:
Pay management fees and dividends without any check or balance
No Annual General Meeting to hold the Board to account
Remove the Independent Directors
Place debt onto Arsenal to support his other business interests
Essentially, Kroenke can privatise Arsenal Football Club. Through his company KSE, he claims that this would help to build on the club’s “strategy and ambitions”.
The AST also notes that this purchase is being “funded by a loan” raising further questions about the sustainability and legitimacy of the deal.
Verdict
In short, this is a terrible move for the club. Just one individual could soon own the club, with free will to use it as they please. Kroenke can buy out individual shareholders putting the future of the club in jeopardy. With 100% ownership, Kroenke will no longer be held accountable by other shareholders, since there won’t be any. Similarly, the new club owner will lose any traceability. Kroenke will run the club and there will be little opportunity to oppose whatever he plans to do next.
This marks an extension of the new era in football, with the ownership of clubs growing increasingly more complicated. Football clubs are now huge assets to the richest people on the planet. There is little consideration of the club itself, its fans and the moral fabrics of the game itself. Instead, it is all about those profit margins.
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