Arsenal Finances

[Iceman10]

^ Do we know what exactly were the "strategic and advisory services" rendered and why those services could not be performed in house by executives on our payroll, i.e. Gazidis, etc.? It's important to know in part because one would want to know if those "services" were one off or whether they are likely to grow (or more accurately demand information out of him to put him on record). I read your link [1] but it's largely saying £3m isn't a big sum, esp. compared with what the Glazers have done with United, etc.

Looking at the company profile KSE LLC serves Kroenke's sports franchises exclusively so a sceptical mind asks whether KSE LLC is a means of siphoning money off. However, on the flipside there are commonalities in services rendered to his multiple franchises in the U.S., including operations, ticketing, etc. [2] so one could see how one umbrella can cut costs for overlapping operational functions required to support his multiple franchises in the U.S., but I would still ask what exactly KSE LLC has specifically done for Arsenal to justify £3m. I would suggest a theory that we are in essence helping to fund KSE LLC operational services of his various sports franchises in the U.S. because I don't see what KSE LLC could be doing for Arsenal outside what has always been performed in-house (and if KSE LLC is helping with operational efficiency then we should really see an accompanying offset in Arsenal in-house costs where duplication is avoided).

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[1] <a class="postlink" href="http://theshortfuse.sbnation.com/2014/9/24/6838667/arsenal-premier-league-stan-kroenke-payment" onclick="window.open(this.href);return false;">http://theshortfuse.sbnation.com/2014/9 ... ke-payment</a>
[2] <a class="postlink" href="http://www.pepsicenter.com/kse/company/about-kse/" onclick="window.open(this.href);return false;">http://www.pepsicenter.com/kse/company/about-kse/</a>

 

[entropy13]

Weird that you mention "siphoning money off" while also linking to the Pepsi Center.

KSE has already built the Pepsi Center before Kroenke even got full ownership of two of its eventual tenants, the Denver Nuggets and the Colorado Avalanche. But I'm guessing it's quite obvious that spending for the stadium is an obvious "siphoning off" scheme on two teams that he wasn't even sure he would be able to take full ownership of.

Do we know what exactly were the "strategic and advisory services" rendered and why those services could not be performed in house by executives on our payroll, i.e. Gazidis, etc.?

There are times when you have to get other people not necessarily from within the same company to provide a different point of view with regards to your own.

This would actually be quite interesting because Gazidis is also familiar with the "American way of sports" through his experience with the MLS, but not as part of an exclusive American sports team, unlike KSE.


And in the TSF link I posted I'm not just talking about the article, but also some of the comments.

 

[Iceman10]

@Entropy, the link address may be the Pepsi centre, but it is a profile describing what KSE LLC does. Probably KSE LLC is largely based within the Pepsi centre. Most of his franchise base is indeed in Denver but I would assume KSE LLC also provides some support for the St Louis Rams for example, although I'm not totally sure, can't find info. to say either way.

Regarding the comments section for the article you originally linked, thanks for pointing out that there is useful discussion there, I'll scan through the comments.

 

[MaestroCesc]

Having said the above, if next year he takes out £6m, then we need to be concerned.

I think we need to be concerned right now! 3m sets the precedent for the future, the worst thing about it is that it came from the 3% rise in ticket prices. He is just bleeding the fan's wallets for his own greed. His is a **** of the highest order. One of the worst decisions the board ever made, selling their shares to him.

 

[DanDare]

Why are people talking about the ticket price increase? Seems rather irrelevant to me. 3% is roughly inflation. If Arsenal don't increase them by that much then they are becoming cheaper each year. I'm sure people will claim that's what should happen but don't demand that in any other sphere of life.

Be concerned if you want because Arsenal paid a company owned by the majority shareholder but seeing some correlation between the coincidental similarity in figures between ticket revenue increases and the money paid to said company is just illogical.

 

[Anfield 1884]

Genuinely interested in people's opinions here, what would be the ideal owner for you guys?

I'm disgusted as most are with the news about Kroenke, but there's really not many alternatives in the murky world of Premier League ownership. Would a consortium or a local owner be a realistic possibility?

I like the German model.

The clubs of the German Bundesliga this week voted overwhelmingly to keep the rule that they must all be controlled by their members, and cannot be taken over by private investors. Even Bayern Munich, Hamburg SV and the other great names of the Bundesliga have to be owned 50% plus 1, a majority, by their members ( there are two exceptions, Wolfsburg and Bayer Leverkeusen, which were originally works teams).

Many fans treasure this system, believing it has been instrumental in keeping German football close to its fans and roots even in the slick, commercial modern age. Ticket prices are low, affordable to young fans and the grounds, among the best in the world, boast the highest average attendances in Europe.

I don't like that football clubs have become businesses in England (and elsewhere). Football clubs should exist for their fans, not to line some ********'s pockets.

Erm, theres a downside to that model, no players stay.

If you're a supremely talented player and you're not pulling on the Bayern jersey, chances are you'll leave your club eventually for a juicier pay check, whether that's France Spain or England it doesn't matter.

Just look at the players that have left Dortmund in the last 4 years. It's a matter of time before Hummels/Reus leave. If there is a glitch in the Matrix and they do stay their entire careers, it's because they genuinely love the club and don't care about the finances... but that's an exception to the rule.

 

[Anzac]

I think the player departures has more to do with their domestic FFP that has created Bayern as a financial league of their own, rather than anything to do with the 50%+1 ownership.

 

[Rex Stone]

<a class="postlink" href="http://untold-arsenal.com/archives/4646" onclick="window.open(this.href);return false;">http://untold-arsenal.com/archives/4646</a>

So much for Chelsea showing us how to have a sound financial model, f****g scumbags. If Putin vs the West intensifies, the sanctions could really hurt Abramovich. I'd love to see their c*nty club flushed down the toilet.

Oh and for all you guys sucking Abramovich and co off a few months ago

 

[bingobob]

Chelsea are debt free the holding company owes the debt not the football club. It will be interesting to know who owns the assets the holding company or the club. Also if the holding company went bust ie unable to pay back the loan an IVA will be created betweem the holding company and creditors in this case the majority creditor would be Roman and if he has a large enough say can accept a much reduced settlement ie 10p on the pound roughly 75m, that is also assuming Chelsea won't have repaid any of the loan in this unknown time frame. It seems to me they have essentially set up a good bank (the football club) and a bad/toxic bank (the holding company) and tried to separate the two.

I am not an accountant or an insolvency practitioner but do know of a good case study in Rangers whom still exist, trade and play. The holding company was liquidised the club bought the good will and assets and continued on.

 

[BobP]

That's ****ed up if true.

 

[bingobob]

There may be an expert out there who can better inform than I can, and certainly if there is please comment expand or critique my understanding, but it is not ****ed up legally, morally I'd say yes it is.

Ashburton Propery Ltd separate legal entity owned by us. Very similar to Chelsea, limited liability ownership therefore the parent company is not liable for debts or tax or regulatory responsiblity. The difference is the separate entity for us is property for Chelsea it is Romans loans. Corporate structure and ownership is a murky labyrinth but ultimately in both these instances the separate entities are there to protect the football club from risky business. The property market tanks the football club is insulated if Roman calls in his loans the club is insulated. It happens in lots of corporate entities. Legally it is fine morally it is systematic of a bankrupt system.

 

[Rex Stone]

Morally it is a disaster area, Abramovich has been converting debt into equity which is a f*****g stupid thing to do. Abramovich has lost around half his wealth since the recession hit, not sure he's that good with his money.

The club is still haemorrhaging money, he's just converted £700m of shares into debt. What happens when he needs to buy players in January or beyond, pump more money in and make yet more shares of it? That'll end well.

 

[bingobob]

Morally it is a disaster area, Abramovich has been converting debt into equity which is a f*****g stupid thing to do. Abramovich has lost around half his wealth since the recession hit, not sure he's that good with his money.

The club is still haemorrhaging money, he's just converted £700m of shares into debt. What happens when he needs to buy players in January or beyond, pump more money in and make yet more shares of it? That'll end well.

He is the only shareholder so any conversion doesn't dilute his ownership there can be 1 share or a million he owns all of them.

Let's assume he sells up in ten years during which time Chelsea repay 10m per season. That's 100m repaid. He then sells for 400m assuming a fair price based on land value of.stadium hotel bar and continued performance of Chelsea and increased sponsorship revenues that nets Roman 500m.

Has Roman derived 240m of utility from Chelsea? Certainly. He is one of a kind, he has increased his profile , his name will go down in football folklore, he has won European Cup and plenty of domestic trophies. What else can a billionaire spend money on another yacht at 200m fly beautiful 18year old prostitutes in on his top of the range helicopter to his luxurious yacht catered by Michelin star chefs. He can do that already. 250m is a drop in the ocean for the unique joy and status achieved through Chelsea.

 

[Toast]

Two of the wealthiest men involved in Premier League football have lost a fortune in the past 48 hours, reports Vanity Fair.

In news that will send chills down the spines of Arsenal and Chelsea supporters, Alisher Usmanov and Roman Abramovich have seen their wealth decimated in the last two days as the Russian economy had nosedived.

As Russia ruble has fallen to its lowest value in more than a decade, Chelsea owner Abramovich has reportedly lost $449.5 million. That has left Roman with a net worth of just $12.8 billion.

As for Arsenal’s second largest shareholder Usmanov, he has lost $809 million this week, leaving his net worth at $13.4 billion.

The figures were compiled using data from Bloomberg’s Billionaires index.

 

[Jury]

The options they have of clawing that back are endless. I doubt they're arsed.

 

[blaze_of_glory]

Yeah seriously, losing a couple hundred million hardly means much when you have over 10 billion remaining.

Sickening to look at those numbers though. No one should have even the amount of money these guys just lost, much less what they have remaining.

 

[Rex Stone]

Abramovich does seem to manage his money really poorly, since the crash in 08 he's lost a literal ****tonne of money, like half his worth. Not going to force him to leave the renties any time soon though.

 

[Jury]

**** Abramovich. Up the Arabs! Price of petrol here could be back to under pound soon at this rate. My promised land. A land I thought had been buried forever.

 

[bingobob]

I walked into work petrol was 1,16 walked home it was 1.09. That keeps up it will be s throw back to the 90s

 

[Jury]

The ****ing Jet garage (the one closest to me ffs!) was holding firm in the 1.20's the other day when everyone else was in the mid teens. Scumbags. I'm driving the extra half mile not to use them now they've got in line.