The reporting is not the issue - for example we know how much the Glazers raped Utd before taking it public again This situation is not a classic LBO like Utd but nevertheless we are moving from shareholders who are equity investors to a situation where the private owner has taken on half a billion in debt to finance the ownership. Personally I think it stretches imagination that Stan won't access cash flows to offset those interest payments in some manner. But let's see
.02c Matt Scott made a case a year or two ago that Stan actually has this stuff set up the other way round (likely because of the shareholder impasse). So in other words Arsenal is the low geared asset (it has relatively low net debt) and he has leveraged the value of his shareholding to borrow money elsewhere - so we won't see this within the Arsenal accounts if correct, this means that the equity in Arsenal is already highly leveraged - now with another 550m on top - he just has not been accessing the cash flows. In such a situation we won't see Stan's debt rolled into arsenal - but we might see dividends flowing out for example.
He's a UK sports journo - if correct this would suggest Stan has been using a different model - namely leveraging the fact that Arsenal has actually quite low enterprise debt in order to borrow elsewhere (acquisition of income producing assets). So he wins on leveraging his Arsenal equity - which keeps growing as the value of the club has risen on the tide. This was his original thesis Kroenke buying a £500m farm *is* linked to Arsenal not spending any money. By growing the cash pile in the club he grows the value of KSE.— Matt Scott (@Matt5cott) February 10, 2016 By growing KSE's equity he can increase the amount of money he can borrow. This is then spent on revenue-generating assets like the farm.— Matt Scott (@Matt5cott) February 10, 2016 He used loans to buy Arsenal, secured against KSE. The loans are serviced through revenue from eg the farm or the St Louis Rams.— Matt Scott (@Matt5cott) February 10, 2016
Thanks for the tip. I'll add Arsenal Vision to my pod subscriptions and check it out. p.s. BTW, I just finally jettisoned The Guardian Football Weekly... after James Richardson left last year I decided to keep listening to see how it'd go, but it just isn't the same quality/entertainment, and I really can't stand Max Rushden & Barry Glendenning. I think Jimbo's new home Totally Football is much better, and it seems that he's a big part of the why.
The point that GiantGooner was making negates this: he was saying this makes no sense, because Kroenke's real estate holdings (strip malls of which WalMart is the anchor tenant) are worth way more than Arsenal, and it's way easier to leverage those because they are far more profitable and have far more predictable cash flows. Finance puts me to sleep (and I'm a patent lawyer who's a procedure nerd!), but this explanation makes a lot of sense. Also consider that if one is trying to make money rapidly, sports probably aren't the way to go. Based on all this, my take is this: Kroenke is in this for asset appreciation, and while he wants his teams to win, he's not going to put money into his clubs. He's unlikely to take money out of Arsenal unless there's an enterprise wide disaster brewing and he needs cash quickly to solve it and financing is unavailable. Reporting requirements in the UK mean that we would know at some point if he took money out of the club. However, he's also unlikely to put money into Arsenal unless there's a disaster brewing, with disaster being defined along the lines of "relegation." In other words, meh.
it doesn't have to be one or the other - he can leverage both. The point is simply he likely took loans to buy his original Arsenal holdings which by 2016 were worth vastly more than what he paid for them. So this means he has more overall equity he can leverage I agree he has other far more valuable assets - but that does not mean he cannot or would not also use Arsenal as additional security to expand his acquisitions - so far as prudent. I see nothing wrong with any of this - it would just be a normal thing to do in order to realise your gains without selling down or taking money out - the later route being especially suboptimal if you have to pay the russian part of every $ In any event - in all these scenarios we won't see debt loaded on to the Arsenal balance sheet - he has no need to do this. Personally I think he will start taking dividend whacks if he can - why would you not?
Just finishing up listening to the Arsenal Vision podcast and what was most notable to me was that none of the interviewees were very alarmed by KSE owning 100% compared to 69%. Matt (GiantGooner) believes that Stan's power is not really much changed with this change, and that he's not likely to put more debt on Arsenal. Paul & Clive were not really negative on this new development. In fact, Clive was decidedly up beat and optimistic about it, even if his metaphors were a bit on the simplistic side. (BTW, it was nice to hear Clive outside of the context of Fan TV interviews, where the volume, vitriol & emotion surrounding that have always turned me off... Clive is so calm and soothing in a podcast like this one, it was very enjoyable) The other thing that I noted (metnioned by one or two of these folks) was the thing I'd been wondering a few pages back... that KSE owning 100% may just make a future sale easier. Although I still believe we've seen no real evidence that they've grown bored or dissatisfied with this "investment".
One thing that is true about the final buyout is that it doesn't change anything from a certain perspective. The "board" was an illusion because one guy had 70% of the votes. People who thought the board had any real use other than distraction were out of their minds.
Exactly. The damage was done when Ms. Bracewell-Smith sold her shares. This rest means little. However, these posts are kinda funny. No podcaster or poster knows shit about what Stan is doing. He has made so many moves recently across his businesses that it’s hard to know how it all fits together. With that said, I find it hard to believe that a very low leveraged asset like Arsenal would not be used - at the very least - as collateral for other Investments he has made and/or that the debt used to pay off Usmanov is solely serviced by other assets. That just doesn’t make a whole lot of business sense. I also find it hard to believe the his strip malls are worth more than Arsenal. Strip malls are dinosaurs and have been bad business for some time given the emergence of e-commerce and home delivery. I could be wrong, but I call bs. And the idea of transparency based on financial disclosures is naive. He can take out money many ways including soft debt to his other companies. There are lots of ways to move money internally.... The days of understanding the finances of Arsenal are over. The AST has had no teeth for a decade. The board is and was a farce. We all are just along for the ride; we just don’t need to pretend anymore. What I find funny is Stan’s business acumen. Remember Dein got booted from the board for suggesting that they sell to Kroenke in the first place. This must be a sour pill for him to swallow... The board thought Stan didn’t have the passion, understanding or love for the club. Then Uanov came in and made an ass of himself with talks of a hostile bid, and Stan took advantage. He played nice, joined the board, talked about the importance of the AST and all sorts of sweet talk and convinced them that he was the good guy and that they only should sell to him. He then systematically took over the club, let the team go into disarray, empowered his kid and finally delisted it and made it his private plaything. He turned out to be exactly what the board tried to guard Arsenal against. And it only took about 10 years to push everyone out the way. The guy is no dummy. I highly suspect that in retrospect all the major players and stakeholders would react differently now. This wasn’t what was envisioned.
Most of Kroenke's strip malls are anchored by a Wal-Mart, which his wife is a part owner of. Forbes says he's worth 8.1b (which I think is low), so Arsenal would probably be about 20% of his net worth.
Retail real estate is still a very lucrative business (look at SPG stock run up). It was the board that sold to him. Fiszman and Bracewell-smith were board members and Dein brought keoenke into the picture. If kroenkes takeover is something you detest, then look no further than the board.
Just google mall foreclosures and have a look. They are offering whole malls now for less than $100. Dying business
He didn't claim to know with any certainty what Stan would do and, in fact, readily acknowledged that Stan could initiate the parade of horribles folks have mentioned. Just like you call upon your background to explain/support your opinions on things, he just opined, based on his background as an investment banker involved in M&As in the UK, that he doubted that club would be run any differently and explained why he thought so.
Yes, some malls are dead especially the closed-air malls of 80/90’s fame, but this isn’t what he holds and also that doesn’t mean the retail real estate is dead or dying https://www.cnbc.com/2018/01/23/eno...loom-retail-real-estate-has-bright-spots.html Anyway, this is pretty boring stuff, so I’ll leave it with this. Like jitty said, he will likely leverage his arsenal investment because this is what any good business person would do (equity makes zero return). However, it’s a stretch to assume that he will inhibit the operations of AFC. That is, I don’t see us being in any more of a precarious position today than a week ago. At least with kroenke, he’s pretty steady. He waited usmanov out, didn’t overreact and fire everyone when we missed the CL money, hasn’t seemed to have meddled much in the operations, and has consented to paying large xfer fees lately plus a wage bill that’s top 3-4 in the league. While I doubt he will start pumping in money like a sheik, I see no reason to think he will milk the club of operational cash just because he can.
Yeah, Walmart is how he made his money. Buy the land and have Walmart anchor it. His strip malls aren’t anchored by K&G or Safeway lol.
I thought either he or Elliot said he was, but I won't swear to it. I have a couple of friends from law school who are in investment banking. Other than being ridiculously smart, they're fairly normal.
I recall that he worked in a law firm that handled mergers and acquisitions and that he personally specialized in UK mergers for the last 12 years. But I could have read the lawyer part into it. In any case he works in M&A for some firm or IB or consultancy or something.
Interesting thread from Swiss Ramble Arsneal's commercial revenue performance has been unimpressive under Gazidis And now with no CL football the club is burning cash As talk intensifies of a potential move of Arsenal’s chief executive, Ivan Gazidis, to Milan, I thought it would be interesting to look at how the club’s financials have developed since he arrived in January 2009. Some thoughts in the following thread #AFC #Milan #ACMilan— Swiss Ramble (@SwissRamble) August 23, 2018
Thanks, I had to hunt down that thread a little, not being a Twitter user. Here was his conclusion at the end: From a financial perspective Ivan Gazidis has not been a bad chief executive at #AFC, just not especially good. Whether his track record merits Milan’s eager pursuit is debatable. If he does leave Arsenal, the club should be able to find a replacement at least as capable.— Swiss Ramble (@SwissRamble) August 23, 2018 One other thing that this got me thinking about... Visit Rwanda pays us 10 Million a year. Although I don't like sleeve sponsorships in general, I'm all for helping a country with a troubled past, trying to make a good turnaround. But as a brand, Rwanda seems slightly risky... it wasn't that long ago that Rwanda = genocide. So I wonder: a) What is the term of this sponsorship contract? b) What is the club's ability to end the deal, if it were to become a PR liability?
More interesting: I just don't understand why you would incentivize a football club CEO the way you incentivize the CEO of a normal business. Unlike in a standard company, the club CEO has little control over the growth of the value of your business.— Giantgooner (@GiantGooner) August 21, 2018 Right, but that has nothing to do with Ivan's managerial acumen and everything to do with the rising price of Premier League TV rights. You could hire any passable smart guy outta McKinsey or the like to do that job.— Giantgooner (@GiantGooner) August 21, 2018 Real value from a CEO, IMO, is a CEO who keeps things running and makes sure everyone plays nice.