Arsenal would be third Big Four club to be U.S.-owned

BY Jamie Trecker • April 10, 2011

Stan Kroenke looks set to purchase iconic London club Arsenal, becoming the fifth American owner in the Premier League.

Kroenke will tender an offer of nearly $360 million to acquire a total 62 per cent interest in the team from two current shareholders, Lady Nina Bracewell-Smith and Danny Fiszman. With the purchase, Kroenke is then obligated under English law to make an offer to purchase all the outstanding shares. Other major shareholders include Russian billionaire Alisher Usmanov, Peter Hill-Wood, Sir Chips Keswick and Glasgow Rangers F.C.

The move means that three of the so-called "Big Four" English clubs would be held in American hands; the fourth, Chelsea, is owned by Russian Roman Abramovich.

Kroenke has been an Arsenal stakeholder since 2007, when he purchased a 9 per cent share from the television production company Granada. Since then, he has steadily increased his stake to 29.9 per cent, just shy of the 30 per cent threshold while maintaining majority control.

A wealthy property developer with ties to the Wal-Mart family, Kroenke is already the owner of Major League Soccer's Colorado Rapids, teh National Basketball Association's Denver Nuggets and the National Football League's St. Louis Rams. The publicity-shy Kroenke, nicknamed "Silent Stan," is well-regarded by his peers as a hands-off owner who prefers to concentrate on the business end of matters while letting his coaches and managers run the sporting operations.

But the purchase of one of global sports' crown jewels will catapult the Denver native into a spotlight that has previously burned other hopefuls.

Kroenke is only the latest in a stream of Americans to sink their money and hopes on the English Premier League - and for some of these moguls, it’s been a sobering experience. Tom Hicks and George Gillett Jr. were run out of Liverpool in disgrace. Milan Mandaric had a stormy tenure at Portsmouth, finally selling out. And, most notably, the Glazer family have been successful both on the field and in international marketing, but have alienated their fan base to the point that Manchester United CEO David Gill recently said some fan groups were "at war" with the family.

Yet a handful of Americans — John Henry at Liverpool, Randy Lerner at Aston Villa, and the little-known Ellis Short at Sunderland — have been welcomed with open arms. In a league where transfer fees have hit $80 million for a single player, many fans realize that to compete, owners need deep pockets.

Today's Premier League is increasingly foreign-owned: only nine clubs are fully in domestic hands, and only one of those, Tottenham Hotspur, is a big-time player.

Unfortunately, much to the chagrin of fans that seek passion and engagement in their owners, much of the interest in the Premier League is primarily financial. The fact is, these clubs look like an undervalued buy: consider that while Kroenke’s Rams are valued by Forbes at $773 million, they are in the lower tier of the NFL, far behind their peers like the Dallas Cowboys ($1.8 billion) and the New England Patriots ($1.4 billion), and the National Football League is facing shrinking margins and labor troubles.

Arsenal by contrast is valued at around $1.4 billion (according to their current share prices) and is seen as still having enormous global potential. In fact, the Premiership’s dramatic global growth has some analysts predicting returns of up to 30 per cent on the clubs — far in excess of the returns on all but the most blue-chip American sports franchises. In addition, while Arsenal has reported only modest profits this past year, it has been tremendously successful on the field while avoiding paying enormous wages and transfer fees - often to the dismay of their fans and at the cost of winning trophies.

Like it or not - and many fans don’t - the Premier League is now no longer English. The old First Division has a lot of nostalgic appeal for many Englishmen, but today’s league is seen in 200 countries around the world, with an estimated 660 million viewers a weekend. Once a largely British league, now the best players from around the planet now ply their trade in otherwise unremarkable cities like Sunderland and Birmingham, giving this small country outsized influence in world sports.

For American soccer fans, the move will likely be bittersweet: Kroenke’s purchase of Arsenal will likely have little to no effect on the game in the U.S. Arsenal is likely to play a few more summer friendlies on these shores, but hopes of club tie-ins to Major League Soccer teams and continental player sharing have been proven to be wishful thinking.

Many American fans will also rightly ask why the same kind of financial commitment Kroenke is showing in London couldn’t be brought to bear here. That’s a harder, colder question that suggests that MLS’s decision to play it safe for 10 years may have condemned it as an also-ran.

Jamie Trecker is a senior writer for covering the UEFA Champions League and the Barclay's Premier League.

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