Following the European Super League debacle, Spotify co-founder Daniel Ek tweeted that “If KSE would like to sell Arsenal I’d be happy to throw my hat in the ring”.
Daniel Ek will not be buying Arsenal – at least not on his own.
The tweet was no more than a bit of PR. Some attention seeking. And we have seen it before with other billionaires tweeting, writing open letters, etc.
Lets work through the maths.
In 2018 Stan Kroenke bought out Alisher Usmanov’s 30% share in Arsenal for £550million. This would value Arsenal at around £1.83bn – or $2.5bn.
Now a few will say “some internet website has valued Arsenal at less than £1bn”, whether it be Forbes or some blog.
These values are what that individual outlet value Arsenal at as a business. Not how much it would cost for someone to buy them.
Just because a company might have an internet value of a certain price, does not mean that is their sale price. This is not the supermarket where a price of milk is listed on the shelf and as long as you have your 89p you can buy it.
It is more akin to owning a house.
Now Zoopla value my house at around £450,000. But that does not mean that if someone knocks on my door with and offers me £450k, I would have to sell it.
The buyer would have to meet my price. My value. Not Zoopla’s.
Now if they offered me £550k, I would think about it.
And it is the same situation with Arsenal.
KSE are the sole share holders. Ek or any other person would have to meet Kroenke’s valuation on the club. Not Forbes, etc.
So when buying out Usmanov, Kroenke showed his hand slightly.
The price he paid for it showed what he valued the club at back in 2018.
“But Arsenal have got worse since 2018 so the price would have gone down”. No.
Remember, it is Kroenke’s value of the club that is important.
My best guess is that it would take an offer around $3bn for Kroenke to consider cashing out. This would generate a nice profit on his investment.
“So Ek has $4.7bn. He could easily afford to buy Arsenal”. No.
There is a difference between net worth and available capital.
Ek’s net worth is almost wholly influenced to the share price of Spotify.
“ Spotify is worth $58bn and Ek owns Spotify ”. No.
Ek does not own Spotify . He was a co-founder and only has around 10.3% of the companies shares. This puts his net worth at $4.5bn.
So for Ek to buy Arsenal outright on his own he would either:
1) Have to sell his Spotify shares to free up capital
2) Take out a loan using his Spotify shares as leverage
Realistically, neither of these two are going to happen. And if they somehow did, Ek is not sitting on billions more that he can then pump into the club.
The only chance Ek has of buying Arsenal is to form a consortium.
A group of people coming together, setting up an investment fund to purchase Arsenal. But is this likely? Not very.
So lets not spend anymore time discussing a bored billionaire sticking out a tweet saying he would like to buy something he can not afford.
I would like to buy a Ferrari.