Alisher Usmanov may repropose rights issue

[M+D]

Telegraph

According to Red and White's financial analysis, Arsenal's earnings are likely to fall next year, largely due to a 12-14 per cent increase in costs as a result of players being compensated for tax changes and some improved contracts for key members of the squad.

It estimates Arsenal's gross average annual spend on new players as £18 million, compared with £37 million for the 'Big Four', and the net annual spend, taking into account sales, as zero, against a £20.2 million Big Four average. Since the move to the Emirates in July 2006, Arsenal have spent around £70 million on new players and sold players to the value of just over £80 million.

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Red and White insists the rights issue is simply about releasing funds and it would be happy for it to be structured so that their shareholding remained at 25 per cent. It is considering its options but would be reluctant to call an extraordinary meeting or place an ordinary resolution in front of shareholders at the AGM if there was little chance of winning.

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The largest shareholder is Stan Kroenke, who has spent around £90 million on shares this year, including a £42.5 million deal to buy a chunk of fellow director Danny Fiszman's stake. "One hundred million pounds has changed hands among shareholders, not a penny has gone into the club," said Moshiri. "He [Usmanov] has offered funds to the club without any conditions, without board appointment. I think the strength of Arsenal is that it benefits from having a number of millionaires, billionaires among its shareholder base.

"Arsène Wenger is a complete genius. He must be supported - without further support I think he would lose motivation. It is a tragedy not to support the greatest manager of modern times to achieve the ultimate accolade in football to win the European Cup."

 

[Illusion]

Whatever the motivation behind this it's hard to disagree with it.

 

[Anzac]

Question:

If this went ahead, do you think they should:

a) use the funds to invest in the team;
b) pay off a lump sum of the debt; or
c) a bit of each as it is unlikely to pay off the debt amount.

 

[Illusion]

Question:

If this went ahead, do you think they should:

a) use the funds to invest in the team;
b) pay off a lump sum of the debt; or
c) a bit of each as it is unlikely to pay off the debt amount.

That would depend how much money is raised.

Since we may yet sell Eboue and Toure after already selling Adebayor for a good amount, it wouldn't be crazy to assume we're going to have money to spend on transfers.

I don't view the debt as that much of a problem within the club right now. It doesn't seem to be costing the club an obscene amount each year and the repayments are comfortable to make at a good interest rate.

I'd most likely favour the money going on players or staying in the clubs bank account to cover any expenses we need it to, be it players or their wages - especially if we really are going to raise every players wages to factor in the new tax rate.

It's not like it's a huge risk for any of the investors either since it's highly unlikely that our share price would fall and they would lose money. This is especially true of the long term shareholders who have made obscene amounts of money from the rise in Arsenal's share price since the 80's.

Still, I don't see it happening unless Kroenke says he'll go along with it and it may be that he doesn't want it to happen.

Once this club wins something we'll learn a lot more about which direction it's going in behind the scenes I think.

 

[progman07]

Question:

If this went ahead, do you think they should:

a) use the funds to invest in the team;

Very obvious. Not winning anything will start a chain reaction, Cesc and co. getting fed up and leaving, us not replacing them well (we never do) and falling out of the top 4, then it's free fall with Diaby and co.

Paying off the debt would be good, but if we don't reach the top 4, it means absolutely nothing.

 

[qs]

The thing is if the money was used to pay off the debts what percentage of the debt would that be? It might be worth while if it saved us more in the medium term as opposed to the long term.

 

[Anzac]

The original figures bandied about were in the region of 100m - that is the majority of the loan on the apartments isn't it, as this seems to be the more pressing concern re our debt structure.

Alternatively if Usmanov is so concerned about the club he can invest his money directly into the apartments himself, using Red & White to take on the debt & relieving the club.

 

[MDGoonah41]

Two things;

* I'd want to see the exact wording, but if he does not gain a single extra share, ie, his percentage of ownership remains identical, then fine.

* The long term debt on the stadium is not an issue. Its pretty obvious that the Board is tight with the money coming in because they are planning for a disaster.

If Usmanov really wanted to help, he'd simply buy up the remaining unsold Highbury Flats, then sell them slowly when demand comes back into the market. The Highbury project is what is weighing on the Board and what is limiting their willingness to splash money on the squad.

So, if Tubs is serious about helping, tell him that's the best method of action.

Edit > Just read Anzac's post. Right on.

 

[qs]

Why doesn't Kroenke underwrite a rights issue or even Danny Fizman?

None of these ****s are fit to run Arsenal. Stop the petty power battle and get us a real owner. **** it if we're going to end up with Jabba or Tashman then we might as well just be owned by a proper billionaire who'll just throw money at us like City and Chelsea.

 

[qs]

Two things;

* I'd want to see the exact wording, but if he does not gain a single extra share, ie, his percentage of ownership remains identical, then fine.

Well thats the thing about a rights issue, all the share holders get offered the opportunity to buy a percentage of the new shares as corresponds with their current holding. Usmanov is offering to underwrite this therefore if anyone doesn't take up their allocation he will buy them.

I don't mind if him and Kroenke going 50-50 on the underwriting.

 

[Gunner4life09]

I've always been against the big sugar daddy owning clubs especially when they come in hurling wads of cash at the club with no proper business plan or model to actually re-coup the money. These people or consortiums don't actually believe they can make money, at least the majority of them don't. Its just like a glorified rich-boys club, a "cool" new trend in the billionaires fraternity. This is pretty obvious with the ridiculous money they throw at transfers and money they offer as wages.

But if it seems nowadays, in the past 5 years at least, its everywhere. Man Utd, Chelsea, Liverpool, Manchester City, West Ham, Portsmouth and Newcastle about to join the list not to mention plenty of clubs outside the premiership are being bought over with the cliche maxim of "become one of the world's biggest club" or something of that sort.

We aren't exactly devoid from this trend with our two biggest shareholders being american and russian, all we are really missing is a saudi and we'd have the trifecta...

But I've come to realise that this is probably inevitable especially with the current economic condition it just speeds up the process with our shareholders looking to cash out and make some money. And I have also realise that this is the only we are going to be able to compete anymore.

I use to think that we could, I still believe that these unsustainable business models that these new "rich" clubs are floating on will run its course and these rich billionaires will come to their senses or get bored and then pull out leaving these clubs in debt and have to conduct a fire-sale with their players but it will be too late, too late for me at least and we will probably be in our 10th season without any trophies... I hope I'm wrong, I do.

My one hope is that we remain sustainable, I love arsenal and one of the reasons I do is because the club prides itself on being so, not spending out of our means on the "star" player, but rather we make these stars. Our players love our manager and not the money we offer that they just can't turn down. I just hope that even if we do have one single owner or a few that they pump in money, well with the lack of a better word - smartly. Relieve us of debt or help us strengthen our transfer kitty but at the same time having it all be sustainable in the long run not go out and turn Arsenal into something that we aren't like a Chelsea or a Manchester City.

 

[sabret00the]

I can see where the shareholders are coming from. To maintain their percentage, they'd have to fork out for what they own. That means that Kroenke would have to buy another £90m worth of shares. It's an awful lot of money and so the reluctance makes sense. However as fans who have large ambitions for our club, if there was a contract drawn up where by everyone maintains their current share and is forced to for an eighteen month period, then i'd be fine for it.

Of course, i'd be scared that Usmanov would try and up his share eighteen months later on the back of Kroenke's frailty after having just forked out so much, but surely eighteen months is enough to build a backbone to fend off Usmanov further?

 

[otfgoon]

Why doesn't Kroenke underwrite a rights issue or even Danny Fizman?

None of these c**nts are fit to run Arsenal. Stop the petty power battle and get us a real owner. f**k it if we're going to end up with Jabba or Tashman then we might as well just be owned by a proper billionaire who'll just throw money at us like City and Chelsea.

Agree this power battle is pretty annoying, I've decided to just ignore it. Still would not want a single owner though, don't like the idea of one person using Arsenal as their play thing and essentially being able to do whatever they want.

 

[kamikaze80]

i'm with you, oftgoon. all leagues should follow the german model of collective club ownership and cheap tickets. it's much more sustainable and community-oriented, while the english model is all about lining the pockets of billionaires and millionaires at everyone else's expense.

when is this fat blob going to choke on a porterhouse steak and die?

 

[Klaus Daimler]

i'm with you, oftgoon. all leagues should follow the german model of collective club ownership and cheap tickets. it's much more sustainable and community-oriented, while the english model is all about lining the pockets of billionaires and millionaires at everyone else's expense.

I'm with both of you. I think that's one of the valid points Platini does have in his witchhunt on english football. Too bad that it gets drowned in all the other less flattering stuff surrounding his ambiguous personality.

 

[qs]

Yeah nice in theory lads but the EPL doesn't have any such model so I'd just like us to compete in the league we're in. We'll be lining some ****s pockets no matter what, doesn't really matter if its Usmanov, Kroenke or Fizzman. They're all ****s at the end of the day.

 

[banduan]

Whatever the motivation behind this it's hard to disagree with it.

Local loan shark steps up and offers your struggling business cash. Loads of it. 'No strings attached'.

Deal or no deal? Hard to disagree with?

 

[Biggus]

Why doesn't Kroenke underwrite a rights issue or even Danny Fizman?

None of these c**nts are fit to run Arsenal. Stop the petty power battle and get us a real owner. f**k it if we're going to end up with Jabba or Tashman then we might as well just be owned by a proper billionaire who'll just throw money at us like City and Chelsea.

Now you're talking! I can't wait till the club is taken over, that'll give some a good kick in the arse that they need.

 

[irishgunnerz]

Why doesn't Kroenke underwrite a rights issue or even Danny Fizman?

None of these c**nts are fit to run Arsenal. Stop the petty power battle and get us a real owner. f**k it if we're going to end up with Jabba or Tashman then we might as well just be owned by a proper billionaire who'll just throw money at us like City and Chelsea.

Agree this power battle is pretty annoying, I've decided to just ignore it. Still would not want a single owner though, don't like the idea of one person using Arsenal as their play thing and essentially being able to do whatever they want.

Pretty much covers my thoughts on it too.

 

[qs]

Why the **** would we need a rights issue anyway. Once the sales of Toure and Eboue go through we'll have made £50m in the market this summer. It'll be a ****ing outrage if that money isn't used.