Silent Stan Set to Make His Move?

By: Martin | April 11th, 2011

Arsenal’s ownership structure, unlike that of most of our competitor clubs, has been held by a plurality of shareholders, making management by the board of directors a much more democratic process. According to many sources, tomorrow that may all be about to change.

Everyone is reporting that “Silent Stan” Kroenke is set to launch a takeover bid. Kroenke currently owns just less than 30% of the club’s shares, and the law requires him to launch a formal takeover bid if he gets to 30%. But apparently he has an agreement in place to buy the shares of both Danny Fiszman and Nina Bracewell-Smith, each of whom own 16%, so he will at least be doubling his ownership share and taking over control of the club. So who is he?

A Missouri native (he is actually named after St. Louis Cardinal (baseball) legend Stan Musial, and graduate of the University of Missouri, he made his fortune developing commercial real estate. Then he made his fortune even greater by marrying an heiress to the Wal-Mart fortune.

He’s come to prominence through his sports activities. He is the full owner of the National Hockey League’s Colorado Avalanche and the National Basketball Association’s Denver Nuggets. He is a minority owner in the National Football League’s St. Louis Rams, Major League Soccer’s Colorado Rapids, and several minor league sports franchises as well.

What can we expect?

Ego? Negative. By all appearances, the “silent Stan” moniker isn’t something that’s come just from his involvement with Arsenal. He’s been very discrete in his dealings with his other teams, too. This is not a Roman Abramovich/Jerry Jones/Mark Cuban type. He’s not going to act like he’s the face of the franchise, I think it’s pretty safe to say this is a guy who’s pretty content to stay in the shadows.

Involvement? Despite the lack of ego, it does appear that this is going to be a guy who is involved. He has been credited for being instrumental in the “American-ization” of Arsenal, bringing in America executives like Ivan Gazidis to help run the club. And he’s apparently attended just about every board meeting, flying in from the United States to do so, since becoming involved with the club. This is clearly a guy who wants to know what’s going on and wants to be involved in making decisions.

Change? Well, that’s a bit complicated. I think one of the reason Kroenke has gotten so involved with the club is because he likes the club’s ethos and current management. So I would be pretty surprised if he comes in and instituting a big house-cleaning in terms of personnel. And Wenger has certainly been respectful towards Kroenke, and vice versa, so I doubt this is going to be a situation where Kroenke gains control and immediately kicks out Wenger so he can put “his guy” in the manager’s chair.

But one area where Kroenke has been fantastic in his prior sports ventures is expanding the scope of a team’s operations. In addition to owning teams, he has also gained ownership of the venues/arenas, and used them for concerts and other events — don’t be surprised if we start to see more international friendlies or matches, or even concerts, at the Emirates after Kroenke gains control. And he’s expanded his clubs’ media presence, starting television and other multimedia platforms to increase fan access to the clubs. I would expect a major overhaul of Arsenal TV if Kroenke takes over, and he’ll probably at least want something akin to Manchester United TV, which is an actual channel that features a lot of original content. And he’s been somewhat of a marketing wizard as well, who has spoken in the past about the need to expand Arsenal’s global and marketing presence — I think we’ll start to see more aggressive marketing and some international friendlies on Kroenke’s watch. All of this will hopefully increase Arsenal’s revenues and improve the bottom line for the long term.

More money? Well, maybe, but probably not in the sense that most people think. As I said in the previous answer, I think he’s a very smart man who has some great ideas for improving Arsenal’s long-term financial potential and growth.

But I don’t get the sense that this is a guy who’s going to start pouring millions of his own money into the transfer kitty. He has not done so in any of his previous franchises, although maybe those situations were pretty different because most of those franchises involve teams in sports which have salary caps, which restricts how much spending a team can do. But he may also refrain from doing so because, as ludicrous as this sounds, he doesn’t have THAT much money. He’s worth about $3 billion, which, you know, obviously, that’s a LOT of money. But he’s worth a lot less than Sheikh Mansour or Roman Abramovich, and worth less than 1/3 as much as fellow Arsenal shareholder Alisher Usmanov. And almost all of his assets are apparently tied up in other non-liquid assets, like real estate and his other teams, so it’s not like he has hundreds of millions of dollars sitting in a vault, Scrooge McDuck-style. Anyone thinking that he’s going to come in and open up his personal checkbook to pay over the moon for players will almost certainly be disappointed.

Trophies Ultimately, that’s the question, isn’t it? His soccer team, the Colorado Rapids, is the defending MLS champion, so there is some track record of success. The Colorado Avalanche won the Stanley Cup in 2001. The St. Louis Rams did win the Super Bowl in 2000. The Denver Nuggets have not won the Championship, but have fielded some pretty decent teams under his ownership. So he’s had some success, but you don’t necessarily get the feeling he’s one of those guys who dies a little inside if his team doesn’t win. Ultimately, he seems like more of a businessman than a a guy who’s obsessed with on-field success.

So is this a good thing or a bad thing? Well, depends on your perspective. If you want an Abramovich who is going to come in, pour money into the club to buy elite players to win immediately, I think Kroenke is not what you are looking for. But I do think he’s a guy who will respect the club’s history and ethos while trying to improve the club’s long-term financial prospect. In other words, I don’t think this is a guy who’s going to be disruptive — coming off of the month we have had, many fans were pushing for the whole thing to be blown up and start over, but in my personal point of view, that isn’t what is needed. I was perfectly happy with the plurality ownership structure we had in place, but if it does have to go by the wayside, I think we could do a lot worse than Silent Stan.

What say you?

How Do You Feel About Silent Stan’s Takeover?online survey

(NOTE: For a much more in-depth look at Kroenke from someone far smarter than I, I highly recommend this piece my Swiss Ramble from a little over a year ago).

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Category: Arsenal News, Backroom

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Darren_V

I don't like this poll as it doesn't give voice to how I feel.
Homey_Mills

So then please tell us how you really feel.
Darren_V

I feel like it's rather impossible to know what's going to happen exactly. I would prefer that the ownership had stayed status quo, because it was familiar and consistent. But this doesn't mean I think having Kroenke is a bad thing necessarily. It's simply unknown, and the fear of the unknown could in reality sway my feeling either way, depending on what I want to make myself think.
AJ

I can't decide how I feel about this move. While I'm not overwhelmed by the performance of the St. Louis Rams or the Denver Nuggets... they've both made some moves in the last couple of years or so to bring in some talent and improve their teams. I suppose we'll just have to wait and see. I agree that we'll probably not see too many big changes in how things are run.
Homey_Mills

Despite his "Silent Stan" nickname, I assume he'll still have a formal press conference, where he'll talk about his vision for the club and so forth?
CSD

The first thing he's going to do is sack Wenger and bring in Mourinho. I've seen it in the tea leaves.
FredJacob

dude hope you not smoking those leaves
Martin

Ha. If that's what the leaves are showing you, I'm pretty sure that's some other kind of leaf.
Perry S.

I've been a long time Quebec Nordiques/Colorado Avalanche fan and based on how he's handled that team, I have to believe his priority in team ownership is far leaning towards Arsenal. Seems to me that he is going to try to grow this brand, put more "eggs" in this basket, and might try to coerce AW to spend more on better players.

Look at the amount of $$ he spent on the Avalanche, for instance, prior to the salary cap era of the NHL. We literally had the Western Conference All-Star team as our cast. I think he will let AW manage as he does, but don't let his notoriety of being a silent owner fool you, he's going to want to spend $$ on bringing in some big name players to the club.
sarah

Curious LFC fan here--I'm getting the general sense that of the possible takeovers, this one is much more preferred by the fans than a potential takeover by Usmanov (which seemed possible a few months ago). Is that because you guys are concerned about the possibility of Abramovich 2.0?
Homey_Mills

Why should we be concerned about Abramovich 2.0? All they've done since he took over is win various titles and compete at the highest level.
Benjamin Dockter

never mind the retarded amount of debt they have and how screwed they would be if he ever left.
Georgedb1

absolutely agree here - Chelsea have emerged as a power recently but they are nowhere near big enough to handle a 700+ million debt on their own (any club would have cause for concern with that sum).

As for Abramovic 2.0 - he's over at Man City. Guess whats going to happen to a club with NO international fan base or name once the Sheik gets bored? Chelsea might somehow be able to deal with it but Man City are going the way of Leeds without a shadow of a doubt. If I was a City fan I would curse the day the Sheik came in because that team has League Two stamped all over their future.
Homey_Mills

Could anyone clarify something for me? The Martin said that Kroenke doesn't have a lot of liquid cash to dump on a team or whatever. Ok, but my question is if this purchase is at least being done with real cash, rather than a giant loan that we've seen in other situations. It would be really bad news if he had to sell players to pay off loans. I don't think that's the case though.
Martin

All accounts, including the club and the directors' official statements, have specically said that this is not being financed with debt, so I don't think it's a Manchester United/Liverpool situation.

I'm sure he's got more liquid cash than you or I (I've got $3 in my wallet right now), but it just seems to me that if he's worth $3 billion, but owns an NFL franchise, 60% of an EPL club valued at about $1 billion, all those other sports franchises, plus real estated, this isn't a guy with hundreds of millions sitting in the bank. I think he probably had to sell some assets or move things around to get the liquidity to buy the shares he has bought, and will likely have to buy more now that he's been forced by law into offering to purchase all outstanding shares at the same price he paid Bracewell-Smith and Fiszman (it's hard to see why Usmanov, for one, would really want to hang onto his 26% share, now that he'll have no inpute whatsoever into the club and can sell to Kroenke at a pretty substantial profit).

I just don't see him as being a guy who would be able to write a $50 million check at a moment's notice to buy an elite player.
Homey_Mills

I think it would be much better for the club to have Usmanov keep his shares. If Kroenke is already the one who can make all the decisions, it would be better, in my view, for him to keep his extra money to use for the sake of the club. Going from 62% to 88% doesn't really change anything, except make him less rich (in terms of liquid cash). Right?
Martin

Right. But as I understand the law (and for once in my career, I think I actually do), now that Kroenke has crossed the magical 30% threshold, he is legally obligated to make an offer to all other shareholders at the same price as the recently-purchased shares, which I believe was 11,700 pounds per share. And if any of the remaining shareholders agree (which Peter Hill-Wood and the board have recommended that they do), they can effectively force Kroenke to buy shares at that price.

And if he goes over 90% ownership, Kroenke then has the option to force all remaining shareholders to sell their shares to him at this price.

This is very different than United States takeover law, but from what I've read, I'm pretty sure this is how it works.

And yes, I understand none of this necessarily contradicts or is even relevant to your point that the club might be better off with Usmanov retaining his shares. You may very well be right about that -- but if you were Usmanov, why would you want to? If you are going to have no voice anyway, why not cash out at roughly $500 million, making a tidy profit, and either use that money on another football club or something else that interests you? Just doesn't seem clear what he would really get out of keeping his shares at this point.
sofreshnsoclean

Martin has it right...we have a similar set up for takeovers in Canada (I just wrote my Business Associations Exam, so it's fresh on my mind)...if you own 20% (30% in Canada), then you can make an offer to take over the rest of the company..and once you hit 90%, the rest of the shareholders are essentially forced to sell their shares to you.

I think it's a shrewd business move by Silent Stan. As Lupe Fiasco said "my net worth is basketball, their net worth is soccer games, look how far my pockets hang." So it's a sound move for Stan and we all know that, I'm sure if any of us could afford buying more shares in Arsenal (or a share for that matter), we would.

He has done a great job with the teams he's ran here. He was very classy with his acquisition of the Avs, and has done a great job with the Nuggets. I think it's good he comes from leagues that have salary caps, because he knows how to win without breaking the bank. He'll spend the money when he has to; I can't speak much on anything besides the NBA, but the Nuggets were over the luxury cap prior to the Carmelo Anthony trade, so he'll spend an extra buck to put together a team that can compete.
Homey_Mills

For what it's worth, the ESPN report on it shows some other interesting "nuggets" about his sports ownership. Did you know he owns a lacrosse team too? And he used to own an Arena Football team? And he apparently has to sell off some of his majority holdings by 2014 to comply with NFL rules about ownership of the Rams.
Anyway, I'm cautiously optimistic, but I don't see much changing in the near future.
DanKing9

I'm pretty sure he's handed over most of the Nuggets and Avs to his son to comply with that rule. I'm sure the NFL could care less about the Rapids as the MLS isn't a threat.

My feeling is that the club will be run the same. He's more focused on increasing the brand that is Arsenal, much like Man U, Chelsea, Real Madrid, and Barca have been doing recently
Mike Howells

"I was perfectly happy with the plurality ownership structure we had in place, but if it does have to go by the wayside, I think we could do a lot worse than Silent Stan."

Sums up my opinion perfectly. If something had to happen, I'm glad this was it.
Robert Hay

What do we think about the North American presence of Arsenal with a U.S.-citizen owner? Do we think we will see more efforts to usurp Manchester United's hold on the states with more targeted advertising, player movements, and (gasp) maybe even a few Arsenal friendlies in the U.S. and Canada?
Normin

Not that it really matters, but I believe he became the majority owner of the St. Louis Rams in August of 2010. He had first right of refusal to buy the majority shares, so he bought it when somebody else was going to buy them.
Perry S.

He did. And he also (as someone else noted) gave up his "rights" to the Colorado Avalanche to his son so that he could purchase the Rams shares as NFL rules disallowed it, otherwise.
Sven Oberg

Yep, agreed. Nicely timed as well, before the usual season break mayhem. If the club can end the season with a settled management team and no threat of Usmanov rocking the boat, it allows the club to focus all its energy on the stuff that matters.