Ownership of Arsenal F.C.

The ownership of Arsenal Football Club is considerably different from that of other clubs in English football. It is owned by a parent company, Arsenal Holdings plc, which has relatively few shares which are infrequently traded. Historically, the club has been owned by descendants of the Bracewell-Smith and Hill-Wood families. The club attracted outside interest as two rival tycoons, Stan Kroenke and Alisher Usmanov, acquired significant share holdings in 2007.[1][2] In August 2018, Kroenke's offer of £550 million for Usmanov's share was accepted, and Kroenke bought out the remainder of the shares to become the club's sole shareholder.[3]

Overview

Arsenal's parent company, Arsenal Holdings plc, operates as a non-quoted public limited company, whose ownership is considerably different from that of other football clubs. Only 62,217 shares in Arsenal have been issued,[4] and they are not traded on a public exchange such as the FTSE or AIM; instead, they are traded relatively infrequently on NEX Exchange (AFC), a specialist market. The 2011 takeover bid by Stan Kroenke puts the club's market capitalisation value at £731m.[5]

Arsenal Holdings plc wholly owns twelve subsidiary companies, covering the group's activities. These include Arsenal Football Club plc (the football club itself), Arsenal (Emirates Stadium) Limited (which develops and owns Arsenal's Emirates Stadium), Arsenal Stadium Management Company (which manages the stadium on matchdays), and Arsenal Overseas Ltd (which manages retail operations). Other subsidiaries deal with property development on the site of Arsenal's former stadium at Highbury and the associated property holding and financing.[4]

Financial performance

The club made an operating profit (excluding player transfers) of £72m in the year ending 31 May 2010, from a turnover of £379.9m.[6] In April 2009, business magazine Forbes ranked Arsenal as third most valuable football team in the world, after Manchester United and Real Madrid, valuing the club at $1.2bn (£605m), excluding debt.[7] Accountants Deloitte rate Arsenal fifth in the 2011 Deloitte Football Money League, a ranking of the world's football clubs in terms of revenue, with the club earning £274.1m in the 2009–10 season.[8]

History

As an amateur club, Royal Arsenal FC, Arsenal started out as a mutually owned club but after turning professional, converted to a limited liability company in 1893. The company struggled in the club's early years, with its location in industrial Woolwich resulting in low attendances. The club was liquidated and reformed in 1910, and taken over by the owner of Fulham FC, Henry Norris. Norris owned the club for the next nineteen years, moving it to Arsenal Stadium in Highbury in 1913. Norris however was forced to resign as chairman and leave Arsenal in 1929 following an expenses scandal.[9]

By the time of World War II the majority of Arsenal shares were held by Samuel Hill-Wood and Sir Bracewell Smith, the MP for Holborn and a future Lord Mayor of London. In those days the shares were not considered to be valuable and had never paid a dividend, and were seen largely as a charitable exercise to provide recreational entertainment for the working people of North London.[10]

After his death, the shareholding of Sir Bracewell Smith was divided between his son and daughter and ended up in the hands of his grandchildren, Sir Charles Bracewell-Smith, Clive Carr (Life-President), Richard Carr (still a director) and Sarah Carr, now Lady Phipps-Bagge.[11] Samuel Hill-Wood's shares passed first to his son Denis and then his grandson and former Arsenal chairman Peter Hill-Wood; he sold much of his family's shareholdings in the 1980s to David Dein, who sold some of them on to Danny Fiszman (a London diamond dealer). In the early 2000s the club sold a 9.9% stake to Granada Holdings Ltd, a subsidiary of ITV plc,[12] and a significant stake was also bought by hedge fund Lansdowne Partners.[13]

Current shareholders

As of 26 September 2018, Stan Kroenke, owner of Kroenke Sports Enterprises (KSE), is the sole owner of the club.

Kroenke's holdings in the club began with an initial 9.9% bought from ITV plc in April 2007;[14] initially treated with hostility, he is now regarded as an ally of the Arsenal board and was appointed a non-executive director of the club in September 2008.[15] Kroenke brought his stake in the club up to 20.5% following a purchase of shares from fellow director Danny Fiszman.[16] On 1 May 2009, Arsenal announced that Kroenke had bought a further 4,839 shares from the Carr family, including Richard Carr, also a director, which made him the largest shareholder of the company with 28.3%.[17] On November the same year, this increased to the maximum 29.9% limit.[18]

A rival bid for the club came from Red & White Holdings, which was co-owned by Russian billionaire Alisher Usmanov and London-based financier Farhad Moshiri.[2] Red & White bought the stake held by former Arsenal vice-chairman David Dein, as well as stakes owned by Lansdowne and many other minor shareholders, and as of September 2011 own 18,204 shares (29.25%) of the club. This is the largest single stake owned by a non-board member. This led to press speculation of a bidding war between Kroenke and Usmanov.[2] However, Kroenke agreed not to purchase more than 29.9% of the club until at least September 2009,[15] while the rest of the board agreed not to consider a sale of their shares to "non-permitted persons" until at least April 2009, and had first option on each other's shares until October 2012.[19]

In April 2011, Kroenke extended his ownership of the club by purchasing the shareholdings of Nina Bracewell-Smith (15.9%), Danny Fiszman (16.11%) and other directors of the Arsenal board, taking his shareholding to 66.64%. Under the Takeover Code, Kroenke, as majority shareholder, was obliged to make an offer for the remaining shares in the club, which would include those owned by Red & White Holdings as well as any stakes held by the remaining minority shareholders of the club;[1] these include those owned by former players as well as three shares owned by the Arsenal Supporters' Trust.[20] Kroenke moved forward with this in August 2018 by purchasing Usmanov's stake. [21]

References

1. Scott, Matt (10 April 2011). "American Stan Kroenke to take full control of Arsenal". The Guardian. Retrieved 12 January 2021.
2. "Foreign cash 'can boost Arsenal'". BBC News. 31 August 2007. Retrieved 12 January 2021.
3. Conn, David (7 August 2018). "Stan Kroenke's £550m offer to buy outright ownership of Arsenal is accepted". The Guardian. Retrieved 12 January 2021.
4. "Arsenal FC Annual Report 2006-07" (PDF). Arsenal Football Club. Archived from the original (PDF) on 10 September 2008.
5. "DJ KSE, UK, Inc. Offer for Arsenal Holdings PLC". PLUS Markets Group. Retrieved 1 April 2011.
6. "Financial results - year ended 31 May 2010" (PDF). Arsenal.com. Retrieved 9 October 2010.
7. "Soccer Team Valuations". Forbes. 8 April 2009. Retrieved 2 June 2009.
8. "Deloitte Football Money League 2011" (PDF). Deloitte. February 2011. Retrieved 11 April 2011.
9. Spurling (2004). Rebels for the Cause. p. 48.
10. Kelso, Paul (19 April 2007). "Market trader who sat at game's topmost tables". The Guardian. Retrieved 12 January 2021.
11. Bond, David (19 April 2007). "Arsenal crisis as Dein is ousted from board". The Daily Telegraph. London. Retrieved 20 May 2010.
12. "ITV buy Arsenal shares".
13. "Arsenal Shares Buyout?".
14. Scott, Matt & Allen, Katie (6 April 2007). "Takeover gains pace at Arsenal with 9.9% sale". The Guardian. London. Retrieved 11 August 2008.
15. "Kroenke joins Arsenal's Board of Directors". Arsenal.com. Archived from the original on 19 September 2008. Retrieved 19 September 2008.
16. "Club Statement: Arsenal Holdings plc". 30 March 2009. Archived from the original on 16 May 2012. Retrieved 30 April 2009.
17. Kelso, Phil (5 January 2009). "Stan Kroenke ups his Arsenal stake again". The Daily Telegraph.
18. Kempson, Russell & Smith, Ben (5 November 2009). "Stan Kroenke moves to brink of obligatory Arsenal takeover". The Times.
19. "Archived copy". Archived from the original on 7 February 2009. Retrieved 27 September 2008.CS1 maint: archived copy as title (link)
20. "The Trust". Arsenal Supporters Trust. Archived from the original on 6 May 2008.
21. Conn, David (7 August 2018). "Stan Kroenke's £550m offer to buy outright ownership of Arsenal is accepted". the Guardian. Retrieved 8 August 2018.