Previous names: Dial Square, Royal Arsenal, Woolwich Arsenal

Wednesday, February 06, 2019

When will Kroenke sell?

By 1970's Gooner

Arsenal's self sustaining financial model requires that a large proportion of any surpluses created can be reinvested back into the club. It therefore minimises the chances of injection of capital by the owner unless of course he opts to do so. Which of course does not look likely.

This would have been less of a worry in past times, when the large benefactors, pumping enormous financial resources into a team irrespective of its financial status, did not exist. It was then a much more level playing field.

It isn't now and therefore under the current owner our expectations for winning titles must be tethered somewhat otherwise our stress and anxiety levels will reach breaking points.

However if Kroenke decides to sell then I believe Arsenal will be ready to attract a major benefactor who will make available the significant resources to allow us to compete on an equal footing.

And I say this by looking at the financial position Arsenal is at right now. Kroenke is an investor and not a benefactor. He is not likely to keep his shares in Arsenal for longer than necessary. When no more significant financial growth can be squeezed out of Arsenal he will sell and move on.

And this moment will arrive sooner than we think because if you analyse Arsenal's accounts any profits that have been made in the last few years have come mainly from selling of players and not so much from internal recurring operational generation of funds (gate receipts, commercial revenues, TV money).

In fact the major substantial increase in the value of Arsenal and its shares has come from the creation of the Emirates and the subsequent paying off of the related debt.

So how much more can Kroenke make out of Arsenal? Not a lot more I say.