Payment to Kroenke roils Arsenal AGM

• by Ridge Mahoney  @ridgemax, Oct 15, 2015

What’s a few million pounds between friends?

Apparently enough that the Arsenal annual general meeting taking place this week is in danger of being shut down. Chairman Chips Keswick threatened to do just that Thursday after fans accosted club officials, demanding the details of a 3 million-pound payment ($4.65 million at current exchange rates of $1.55 = 1 pound) doled out to Kroenke Sports and Entertainment, a company owned by the club’s majority shareholder, Colorado Rapids operator-investor Stan Kroenke. 

Arsenal paid the same amount to SKE last year for “strategic and advisory services,” as reported by The Guardian, and shareholders pressing for specifics weren’t mollified by responses from Keswick. “I felt it was right to pay a fee for a wide range of services provided by KSE,” he said.

“We should not be in a position where we expect these things to come for nothing -- that would not be good governance. I would remind you that KSE is one of the most respected sports organizations in the United States. This has contributed to our positive evolution in a number of areas. Finally, I’d remind everyone that we have a majority owner [Kroenke] who is respectful of our traditions.”

Buyouts of shares previously held by Nina Bracewell-Smith and Danny Fiszman in 2011 installed Kroenke as majority shareholder with 67.3 percent of the club. Alisher Usmanov, who retained his stake during Kroenke’s takeover to stay on as second-largest shareholder (30 percent), reportedly asked the club prior to the AGM for clarification about whether “value for money is being obtained.”

The payment is an especially touchy subject for fans who pay the highest prices in the Premier League and regularly criticize the club’s hit-and-miss dealings in the transfer markets. Arsenal’s charges for season tickets ($1,500 to $3,000) and most-expensive match ticket ($150) are the highest according to a BBC survey that included 19 of the 20 Premier League clubs (Swansea City declined to participate). Arsenal’s cheapest match ticket, $42, is at the lower end of prices charged in the Premier League.

Arsenal went undefeated (26 wins, 12 ties) while capturing the 2003-04 Premier League title and finished second to Chelsea the following season, but has placed no higher than third in the past decade. The Gunners finished third last year and are currently second, two points behind Manchester City. Since losing to Barcelona in the 2005-06 Champions' League final, Arsenal has reached the semifinals only once (2008-9). It has lost in the round of 16 the past five seasons. Former MLS deputy commissioner Ivan Gazidis has been the club's CEO since January, 2009.

Keswick grew testy when questioned if there was a written agreement between Arsenal and KSE in place, “or is it like [Michel] Platini and [Sepp] Blatter’s verbal agreement?”

He replied, “I am not Mr. Platini, I am not Mr. Blatter, and there is not a written whatever-you-wanted because as I have explained, good advice is where you can get it and how you get it and if you get good advice then you succeed. If you don’t get the right advice, then you fail.

“I don’t know how many of you here run your own businesses but those of you who do will know that the best advice you can get is the quick advice from people -- and this is the point -- in other organizations know more about the problem than you do. If you are a humble enough to accept that then you go and you get good advice. That is precisely what we do at the Arsenal with KSE.”