There have been some insightful discussions on the topic over the past few days on AA. Now that Crystals is back to the fold, I thought maybe we could do a “Kelsey” and put comments by AA patrons together to try and generate some consensus, or better still, some disagreement.
September 24, 2014 at 6:26 pm
Bad PR, whichever way you look at it?
Arsenal owner Stan Kroenke angers fans by taking £3m out of club
• Payment matches 3% rise in season ticket prices
• Kroenke has dodged issue of receiving dividends
Amy Lawrence, The Guardian, Tuesday 23 September 2014
Excerpts: “Arsenal’s majority shareholder, Stan Kroenke, has taken a payment of £3m out of the club according to the latest company accounts.
“Having never taken dividends from his American sports franchises, … this is a move that has gone down badly with Arsenal supporters. Coincidentally, the £3m figure tallies with the amount the club raised from a 3% rise on season-ticket prices for this season.
“The money has been paid to Kroenke’s company, KSE LLC, for strategic and advisory services which relate to Arsenal’s broadband division, the media department which raises funds by selling a three-hour block of weekly content to the lucrative international market.
“No doubt the Kroenke payment will be a subject on the agenda at Arsenal’s AGM on 16 October.”
This then generated insightful comments from the AA in-house accountants.
September 24, 2014 at 6:53 pm
Can one of the plethora of accountants that frequent this site please comment on the article in the Guardian about Stan Kroenke taking dividends out of the club. Thank you in advance.
September 24, 2014 at 7:23 pm
[F]rom what I briefly heard on a local radio station, the fans are upset that Kroenke took £3m out of the club as expenses, and justified it, by saying the Glazers were brilliant owners and had taken very much more out of Manure than he was taking out from Arsenal for his personal expenditure. this would not be a dividend – as it would have had to be issued to the other shareholders, like Usmanov, and any fans who are still holding shares.
His salary as a director is peanuts too.
This might be a straw in the wind? Perhaps he is going to want a return on his investment in the club, though he has never previously done this with his US franchises.
September 24, 2014 at 8:15 pm
I think it’s a piece of misleading journalism (surprise surprise) to suggest it was a ‘dividend’. The bad PR aspect of it for me was the fact that the amount taken out more or less equals the ticket price increase.
Gööner In Exile says:
September 25, 2014 at 7:26 am
Where I stand on £3m….it’s a Non story.
It’s literally at the arse end of the Accounts under a section called Related Party Transactions where any dealings with companies related or Directors related have to be disclosed. It is required to demonstrate that a fair value has been placed on those transactions. It can also be used to show services that were provided but not charged (eg KSE could provide Contracts Lawyers, but never charges for them….this would have to be reported so that Investors would know a change in ownership could increase costs of running company if they had to pay for it themselves).
There are about £260m of Operating expenses, a large portion is player wages, the accounts do not provide a full breakdown of these expenses, the £3m paid to KSE for strategic, consultancy advice is in reality peanuts compared to our overall costs, would Arsenal fans be happier if this was paid to Bodgeit Flogitrun & Co for Marketing advice? Or to WeChargeEverySecond & More Lawyers…..we wouldn’t even know.
Not sure Stans answer was the best, but in a season where our player trading was £32m out compared to consistently in, and wages went up £12m, is it a surprise that the media find something else to focus on?
September 25, 2014 at 7:34 am
“would Arsenal fans be happier if this was paid to Bodgeit Flogitrun & Co for Marketing advice? Or to WeChargeEverySecond & More Lawyers”
I think the answer is a resounding, ‘YES” 🙂
September 25, 2014 at 7:50 am
I would not believe a story stating that Kroenke takes nothing out of the club. Why shouldn’t he? Had I invested millions I would want to see some returns, even if it was from the AFC
September 25, 2014 at 8:01 am
Up until recently, Eddie, it is true that Kroenke has taken very little out of the club.
His director’s salary really is minimal, no dividends have been paid to shareholders, of which he is the major shareholder of course, and he seems content to see the value of the club rise due to good fiscal management and therefore when he eventually sells Arsenal, and in due course he will, even if it is in many years time, he will reap the rewards of his investment then.
On the other hand he may get peed off with the constant sniping about the club and his stewardship and start taking a huge salary, and authorise huge dividends to the shareholders to shut them up. 🙂
September 25, 2014 at 8:09 am
I doubt he’d authorise huge dividends to the shareholders because it would mean giving money away to Mr Creosote.
Big Raddy says:
October 3, 2014, headline post “Friday’s Rant”
Complaints about Stan Kroenke taking money out of the club: Why? When I owned a business if one of my customers told me that I couldn’t take a smidgeon out to enjoy a self-finding mission to the Berkshire countryside I would have given them short shrift (whatever a shrift is?). The man has invested heavily into AFC and yet to take a dividend, his company did some work for the club, they got paid. So what?
Anyone who thinks Silent Stan is in it for anything but profit is beyond naive.
October 3, 2014 at 6:02 pm
Agree about Stan. I’d of thought he’s about the perfect owner. Hasn’t leveraged the company, takes nothing out and doesn’t interfere with football matters.
October 3, 2014 at 8:49 pm
I too think that Kroenke is a perfect owner. He keeps his views to himself, doesn’t go to all the games sitting there like Abramovitch with a teenage girlfriend and a face like a slapped arse; doesn’t attempt to run the team or impose transfers. And last but not least – does not want to change our name to Arsenal Lions/Donkeys or Giraffes or shirt colour to blue. Perfect, he has my vote of confidence.
I have unashamedly pilfered material from these discussions and just put these together. So what do you think?
Here are some questions for you ………
1. Has silent Stan been a good owner for the club?
2. Is Stan Kroenke a better owner than the likes of Abramovitch and the Glazer family?
3. Was it wise to pay KSE LLC £3m for strategic and advisory services?
If your answer to 3 is yes do any of the following apply?
- Stan deserves some return on his investments in the club
Stan has been a good director and he deserves to be rewarded
These services had to be procured, better pay KSE because they have a stake and will deliver
Better than paying dividends which would then go to unworthy shareholders as well
If your answer to 3 is no do any of the following apply?
- This is poor publicity for the club
The club is not providing good value to fans, better invest every penny in developing the squad
This is just a clever way of fleecing fans and redistributing their money to the owners
Over to you, readers, contributors and patrons.