jirrion (blumenfeuer) wrote in ontd_football,

$rs $unday (tl;dr if you're not into newspapers)

Big Guns Are Aiming for Arsenal

LONDON—The battle of the billionaires has developed into a Cold War at Arsenal Football Club. E. Stanley Kroenke, a U.S. real-estate and sports mogul, and Russian oligarch Alisher Usmanov are the two superpowers locked in a tussle for outright control of the Premier League team.

The latest flashpoint in their power struggle came Friday when Arsenal disclosed that after months of inactivity, Mr. Usmanov—through his investment vehicle Red & White Holdings—had acquired 668 shares in the North London club, increasing his stake to more than 26%.

The news comes after Mr. Kroenke has painstakingly built up his shareholding to just shy of the 30% mark that, under British takeover rules, would oblige the American to launch a full bid for the club, which is reckoned by Forbes to be the third most valuable in football at $1.2 billion.

"It looks at the moment that there are two main people fighting for ownership of the club," Arsenal manager Arsène Wenger told reporters Friday. "Who will get the ownership I don't know." Mr. Usmanov's spokesman declined to comment. Mr. Kroenke's spokesman said the holding company Kroenke Sports Enterprises doesn't comment on any matters related to its owner's interest in Arsenal.

The man nicknamed "Silent Stan" by sportswriters in his hometown of Denver, Colo., is now just 42 shares short of triggering an obligatory takeover bid.

Alex Fynn, a football consultant and co-author of "Arsenal: The Making of a Modern Superclub," says it is most likely that the quiet American will emerge as the victor.

"It looks inevitable that he is going to take over the club because he is buying shares with the acquiescence of the board," he says. "Whereas Red & White Holdings have not been given a seat by the board even though they have a shareholding of more than 25%. They have a seat in the directors' box at the Emirates Stadium and a table in the directors' dining room, but no seat at the top table, as it were." Arsenal doesn't comment on club-ownership matters.

Mr. Kroenke's newfound influence in the corridors of power at Arsenal represents a major turnaround.

Peter Hill-Wood, the current chairman whose family connections at the club span nearly a century, once famously said of the American that Arsenal didn't need "his sort"; last month, Mr. Hill-Wood pocketed £850,000 for selling him 100 shares.

"The board have realized that they could no longer proceed in the way they had done in the past," says Mr. Fynn, who has worked for a number of Premier League clubs, including Arsenal and Manchester United.

"The first warning signs were when Roman Abramovich arrived [at Chelsea] and with the arrival of the Abu Dhabi Development Corp. at Manchester City, the writing was on the wall. The board have recognized that the game has changed and finance is now a prerequisite for success."

Mr. Kroenke has amassed a small sports empire around his home in Denver. Through Kroenke Sports Enterprises he owns the Denver Nuggets in the National Basketball Association, the Colorado Avalanche in the National Hockey League and the Colorado Rapids in Major League Soccer. He also owns a chunk of the St. Louis Rams in the National Football League.

As an owner, Mr. Kroenke has invested heavily in facilities and made his teams generally more competitive. "He's been a significant force in bringing the Nuggets and Avalanche properties back to respectability and in making the Pepsi Center one of the most viable venues of any city in the U.S.," says Steve Sander, director of strategic marketing for the city of Denver.

Now he is exerting his influence at the Emirates Stadium. Arsenal has brought in more professional management and top executives now have a U.S. pedigree. Ivan Gazidis, a former executive for MLS, joined as chief executive in January, while Tom Fox, a former NBA Asia executive, was hired this fall to head up marketing and revenue efforts.

By contrast, the Uzbek-born billionaire Mr. Usmanov has been unable to secure a board seat and his idea of a rights issue to raise money for the team was turned down by the board last July.

The club's fans are watching the battle carefully, especially after the American takeovers of Liverpool and Manchester United, which with Arsenal and Chelsea make up English football's Big Four.

Both of the American-owned clubs were purchased in leveraged deals and have cut back on player recruitment since the economic downturn, while domestic and European rivals such as Manchester City and Real Madrid have spent heavily on acquiring top stars.

There are also questions about how Mr. Kroenke would fund a full takeover of Arsenal in a financing environment that has become tougher since the Manchester United and Liverpool deals.

One banker who works in the private-equity space said more cash would certainly be required in a takeover, but it is difficult to estimate exactly how much more cash since every deal has its own quirks.

In the case of Arsenal, there is a "rarity" value, since it is the last of the Big Four clubs in English hands. It also has a modern stadium, something indebted Liverpool craves.

The banker, making a "ballpark" estimate, believed a buyer of an entity such as Arsenal would need to put up about 40%-to-45% compared with 25%-to-30% two years ago.

Based on British takeover rules, Mr. Kroenke would need to bid for the company at the highest price paid per share in the past 12 months, which was £10,500 in May, or £650 million. At that price, Mr. Kroenke would need to find about £250 million in cash—a lot of money even for an individual Forbes estimates is worth more than $3 billion.

Supporters are also split between Mr. Kroenke and Mr. Usmanov because they embody two sides of a simmering row over the running of Arsenal, which has created deep divisions among fans and within the boardroom.

While Mr. Kroenke has achieved success with his stable of U.S. sports teams, he has done so without spending vast sums. Arsenal has done similar, spending smaller amounts on young, promising players and then selling them to other clubs for a profit later.

Mr. Usmanov has said he wants the team to raise more cash to fund higher-profile player acquisitions. Despite announcing record profit of £35.2 million for the past financial year, Arsenal acknowledges it still must make substantial payments to finance debts associated with its new stadium.

Increasing the sense of urgency is the situation on the field. Arsenal is currently third in the Premier League and has closed the gap on leaders Chelsea to six points with Sunday's 2-1 win at Liverpool, but there is a strong feeling—articulated recently by the team's captain Cesc Fabregas—that the club needs to strengthen when the transfer window opens next month if it is to mount a credible challenge for the Premier League title or Champions League glory.

Arsenal has lost leading scorer Robin van Persie for up to five months with an ankle injury, and even the frugal Mr. Wenger has acknowledged the need to sign a replacement forward in January. Funds are limited, however, and much of this season's transfer budget was spent on the £16.9 million signing of Andrey Arshavin from Zenit St Petersburg last January.

A takeover ahead of the January transfer window, when new players can be acquired, is considered unlikely.

Mr. Kroenke hasn't fully paid for all the shares he has pledged to acquire, according to company announcements. Under British takeover rules, he would also have to launch a full bid at the highest price he has paid for shares in the past 12 months: the £10,500 figure last May. More recently he has paid £8,500 for shares, meaning he would save a pretty penny by waiting until the season ends.

i'd much rather have kroenke than usmanov if i was an arsenal fan. i'm not a huge kroenke fan, but he's less sketchy imo.

andddd, on the manchester city fun times:

Money can buy talent, but it cannot buy time.

On the last weekend before Christmas, Barcelona completed its full set of trophies in 2009 by winning the Club World Cup in the United Arab Emirates. It took a goal from Lionel Messi, who was nurtured in the Barça academy from adolescence, to score the winner in overtime.

Back in Europe, the two clubs that between them have spent, or squandered, $750 million trying to buy rapid success, went their different ways. Real Madrid overwhelmed Zaragoza, 6-0, in the Spanish league in the Santiago Bernabéu to show that its glittering individuals can, given time, gel.

Manchester City, the English club that had passed from Thai to Abu Dhabi ownership in the past two seasons, also won, 4-3, at home to Sunderland. But the sensation wasn’t the game, it was the cowardly way the club waited for the fans to leave the stadium and then posted a notice on its Web site: “Change of Manager at City,” it was headlined. It went on: “Manchester City F.C. can confirm that it has today terminated the contract of Mark Hughes.”

Khaldoon al-Mubarak, the chairman appointed to run the club on behalf of the Abu Dhabi royal family, issued a statement on the Internet that said: “A return of two wins in 11 Premier League games is clearly not in line with the targets that were agreed and set. Sheik Mansour and the Board felt there was no evidence that the situation would fundamentally change.

“This is a particularly difficult announcement given the personal investment over the past 15 months.”

With that reference to the cash investment, Mubarak’s statement announced that the Italian Roberto Mancini had agreed to be City’s new manager.

The grapevine knew this two weeks ago, but journalists were dismissed as rumormongers and told to stop trying to undermine the unity of the sheiks and their club.

Hughes’s last acts as coach were to drop from his line-up Robinho and Emmanuel Adebayor, two of the most expensive misfits thrown into his team pool. He won the match with them frozen out and then addressed the players behind the locker -room door.

He told them he had been fired. He apparently urged them to carry through the mission he was set, to make City a top-four team in England so that it qualifies for the Champions League next season.

When Hughes left the room, to walk silently past the media messengers waiting for a post-game press conference, a delegation of those players, led by the goalkeeper Shay Given and the midfield defender Gareth Barry, went to the boardroom.

They tried to confront Mubarak and Garry Cook, the chief executive, but were told the coup was irreversible. Players who were persuaded to join by Hughes were in effect reminded that this is now Abu Dhabi City — and, as some of the highest-paid players in the global sport, they will play for whomever Abu Dhabi appoints.

The owners know a great deal about money, and a little about soccer. Their new man, Mancini, played briefly in England, but has coached only in Italy. His three Serie A titles as Inter Milan coach owe much to the willingness and wealth of Inter’s oil-baron owner, Massimo Moratti — but the Moratti family is steeped in soccer. Two of Inter’s titles were handed to it after Juventus and A.C. Milan were punished for illegal contacts with referees during Italy’s 2006 match-fixing scandal.

Hughes may get full compensation for the 18 months that remained on his £3 million, or $4.8 million, a year contract. Mancini has reportedly agreed to a similar salary, plus a £1 million bonus if City qualifies for the Champions League, and another £1 million for each major trophy the team might win.

He inherits the team Hughes tried to blend, and in January can spend more Arabian wealth during the mid-season transfer window. Expect some Italian blood to arrive, because the new coach will require players he trusts.

A month back, Mancini might have replaced Manuel Pellegrini as Real Madrid coach because the new “galacticos” were taking too long to click. The romp Saturday eases the pressure and the impatience in Madrid.

Pellegrini said after the game: “It’s difficult to jump to conclusions in soccer. The scoreboard suggests a perfect match. We’ve tried different formations and we’re within two points of Barcelona, whose great performance lends even more merit to ours, because we are keeping up with them.”

Keeping up over half a season during which Madrid had borrowed to buy Ronaldo, Ricardo Kaká, Karim Benzema, Xabi Alonso and others for sums that even Abu Dhabi has yet to match.

They probably will do so, whether Mancini is their man, or their stop-gap until Guus Hiddink, José Mourinho, or even Arsène Wenger can be tempted by the scale of spending that the Arabian royals can throw at their “project.”

In all of this, one Englishman so far survives the cull. Cook, hired as City’s chief executive by Thaksin Shinawatra, the former Thai prime minister who briefly owned the club, oversaw the hiring and firing of Hughes.

Once a Nike brand manager, Cook boasted that he had to convince Hughes about paying £32 million for the inconsistent Robinho on the day Abu Dhabi acquired the club.

“I talked about this a lot to Mark and he sort of understands,” Cook said at the start of this year. “We are building a global empire here, we need a superstar.”

In the same news conference, Cook disparaged stalwart City heroes because, he said, their names “do not roll off the tongue in Beijing.”

Hughes wanted to go step by step, building a team of proven players in the Premier League — and later add foreign superstars.

“Mark’s a homegrown lad, very old school,” Cook said. “He’d rather sign players he knows. He doesn’t like the unknown because it takes him out of his comfort zone.”

What Cook said was more about what he understands: the brand rather than the sport. Some day, perhaps soon, the sheiks might conclude that they have removed the wrong man.

source, bustedflush pointed me to this
the fans are so screwed in this situation, as are the players who care about more than the money :/
Tags: $ £ €, article, club: arsenal, club: manchester city, league: english premier league (epl)

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