So after last nights news that Alisher Usmanov had made a $1.3bn bid to take control of Arsenal about a month ago, today’s news is that majority share holder Stan Kroenke intends to stay at the club long term, according to Sky sources.

Since last night, one aspect of everything to do with Arsenal, the ownership, and moving forward has been bugging me.

Why does Stan Kroenke own Arsenal?

Love

Kroenke does not love The Arsenal. He barely attenda games, could barely name any of the current team, let alone have a clue who Tony Adams, Bob Wilson or Ian Wright are if they walked passed him in the street.

He go’s to less game at the Emirates than someone who says they are “boycotting the ground till Wenger leaves”. He has little, if anything, to do with the club, leaving the day to day running to Ivan Gazidis, the board, his son Josh and Arsene Wenger.

Stan Kroenke does not love Arsenal football Club.

Money

Many people will say Kroenke only owns Arsenal for the money. They will point to the £3million he has taken out twice (I think it’s now twice). They will claim he uses the club as collateral to buy stuff in America. they will call him greedy. And they are wrong.

Firstly on the £3million. At the time, this confused me. For someone worth a reported £5.75 billion, £3m is pocket change. He probably has that in his back pocket.

To put how little it is in real terms, imagine you live in a house worth £575,000, the equivalent to £3m is you boring £300 from a mate. Yes, a decent chunk of money, but not exactly a loads. I would have no hesitation of lending that (and more) to a mate.

If you want to see an example of greed in action at a football club, look at the Glaziers over at Manchester United.

Manchester United recently paid out a dividend to the family worth £18.3m. Last year, the 6 siblings got paid £15m. All this whilst Manchester United’s debt rose. Remember the Glazers bought Manchester United by leveraging the loans needed to buy the club against the club. Basically using the clubs own money to buy itself. They are greedy. Kroenke not so much.

You then have the rumours of him owning Arsenal to use the club as collateral against debts in America. There is ZERO proof in this. A lot of fuss was made when he bought a $725m ranch in Texas. Rumours were he had leveraged the debt to buy this against Arsenal. But he had bought it using cash.

Unlike the Glazers who use assets to buy more assets, Kroenke seems to use his own money to buy everything, from Arsenal to Texas.

And anyway, the old saying is true, no one buys a football club to make money.

Last year Arsenal had a turn over of ~£350m. The average Walmart store in America turns over £850m a year.

Whilst players make a lot from football, clubs rarely show profit. Last year Arsenal shows a pre-tax profit of just £3m.The simple fact is, there is very little, often if any, profit to take out of football clubs once costs such as wages, tax and player transactions have been offset.

The last place to make money from football clubs is trading on the share price. If Kroenke accepted Usmanov’s recent offer of Arsenal.

According to Angry of Islington, Stan Kroenke has spent approximately £424m on buying shares. Usmanov’s offer works out at £1 billion. So that would be Kroenke doubling his money.

As a trader/investor, he makes his money on the share price. Buys low, sells high. So over 100% profit, half a billion pound made, on a 10 year investment. An investor in it for the money would sell. But Kroenke hasn’t. Does he think the price will continue to increase (Usmanov has already offered well over the recent trading price shares)? Or is he simply not in it to make money?

If he owned Arsenal purely to make money, he would have accepted the Usmanov offer.

Ego

Why does the man with a $1.1b yacht commission the build of a $1.4b yacht?

Because his mate moored up next door to him in the harbour has just turned up with a $1.25b yacht.

It is all about ego. All about being ahead of the jonesys. Football clubs, like NFL teams, NBA teams, F1 teams, houses on every continent, 10 houses in London, super cars, and everything else a billionaire buys is basically an ego boost.

I do a lot of work in the luxury housing market. Billions are always buying a new property. Expanding their current property. Putting in a new iceberg basement. Buying the Chelsea townhouse next door and knocking the doors through. They barely live in this property, so why spend the money? Because they can, and because it means their house is bigger, better, more luxurious then their friends from Siberia, Qatar or Texas.

It is all for ego, and own sports clubs is exactly that.

In America, owning an NFL team is a sign that you have made it. Add in an NBA and NBL team and even better. NHL on top and you can boast about it when at the super secret meetings these people have.

Premier League sides are in that category. There is little difference between having $7.5b worth and $8b worth. But if your Premier League side has beaten a friends, or your NFL side wins the Super Bowl, it allows you to boast.

It is rivalry that all of us face at work with our colleagues, but just on a bigger, more expensive, scale.

The thing is Kroenke’s teams do not win things. They are all average. So what does he boast about on the Freemason’s yacht with his fellow Illuminati? He does not run successful teams. They are all failures. So maybe he does not own Arsenal (and his other franchises) for an ego boast?

 

Kroenke is a dangerous investor. He is an investor that no one really understands why he owns the teams he owns. It is not love, it is not money, it is not ego.

Why does Kroenke own Arsenal Football Club?

Keenos
Follow @KeenosAFC