The Lombard column in today’s Financial Times asks what Stan Kroenke sees in the UK football business. The column continues, ‘The industry is dominated by its customers (the fans) whose forceful demand for a rare product (trophy winning team) push shareholders into paying astronomical sums to their staff (the players). The net result is that the customers are rarely happy, shareholders rarely make any money and the staff run off with the takings. Good luck, Mr Kroenke.’
The Lombard column in today’s Financial Times asks what Stan Kroenke sees in the UK football business. The column continues, ‘The industry is dominated by its customers (the fans) whose forceful demand for a rare product (trophy winning team) push shareholders into paying astronomical sums to their staff (the players). The net result is that the customers are rarely happy, shareholders rarely make any money and the staff run off with the takings. Good luck, Mr Kroenke.’
So what is ‘Silent Stan’s’ game plan? Capital appreciation, it seems. He made his money in real estate. He is at heart a basketball fan who likes owning sports franchises, in particular for the long-term value of their real estate assets. He spends most of his time on his ranches, doesn’t appear at the Emirates that often and his initial grasp of the rules of football was sketchy.
He will keep in place the current board, although many Arsenal fans see them as ageing and old-fashioned and wouldn’t mind a clearout. Some reports suggest that he thinks that Arsene Wenger has too big a say at the club.
Arsenal made pre-tax profits of £44.8m last year, but a quarter of that came from the Highbury re-development. The wage bill has grown faster than expected and is now £110.7m. Wenger’s philosophy has been one of developing players and it will be interesting to see how much money will be made available for new signings in the summer.