What do Aston Villa , Liverpool and Manchester United all have in common? Yes, The common denominator in all these clubs is an American owner. And if Stan Kroenke has his way, Arsenal FC will join that ever growing list.

The opposition has been vehement, both from the fans and from the board. Although there has been some misguided thoughts that the takeover will allow Arsenal to mix it with the big boys. The takeover doesn’t make any sense. It does not make sense the business way, let me explain why.

For all of those misguided souls who think that Stan Kroenke is another Russian sugar daddy like Roman, face it, HE IS NOT. Period. He is not going to walk into the Arsenal boardroom with a blank cheque in hand and ask Peter Hill Wood or Danny Fiszman to fill out an amount they deem enough. As one person in put it “We (Arsenal) won’t be a rich man’s play thing, more likely we will be his wallet and washing machine”. Put in simple terms, he is simply going to burden the club with more loans and subsequent interest payments.

For all those people who know how businesses work you can skip this paragraph, for those of you who don’t read on. When a business makes money it puts money in the pockets of the owner. Then owner then decides whether he wants to buy a shiny new Mercedes and let the business stagnate or whether he wants to reinvest the money and make the business even bigger. The latter is the case with present board of directors of Arsenal.

The present board does not take home the profits instead they let club take whatever profits it generates. Will Stan the man do the same thing?? You are going to have a tough time to convince me that he will do the same thing. There is otherwise no incentive for him to cross the Atlantic.

And you saw this in our site first, Arsenal WILL be the richest club in the world next year this time. No, please stop laughing; I’m not delusional neither am I high. The half year figures for the month ending November is 100.8 million pounds. Compare this figure to the 57 million last year. 9 million pounds can be written off as non-football related income so that makes it 91 million pounds. Arsenal made 156 million for the whole of last year, if we were to extrapolate this figure Arsenal would end up with something like 200 million pounds this year. Add to this the cash injection of nearly 20 million to all premier league clubs the picture does look very rosy indeed.

The extra income is primary due to 3 million pounds match day income, naming rights and other merchandise. The 3 million is the highest anywhere in Europe. Obviously, being in London has its own advantages.

In layman terms

40 million extra in revenues + 20 million TV money – 17 million in loans repayment – Lot of money in increased player wages(Gallas, Henry etc) – Running costs of the stadium = A very rosy picture.

Of course the 260 million pounds is being repaid over 25 years and anything can happen between now and then maybe English football will face a total collapse like the Italian league. But by in large there are reasons to be optimistic.

Coming back to my original point, If at all Stan Kroenke takes over the club, the money is not going come out of his own pocket. He is going to borrow nearly 700 million pound which will be required to buy the club.

Who is going to repay all that money??? Of course its going to Arsenal Football Club.

Just because Kroenke has taken over are the clubs profit magically going to increase? Of course not!

So basically what will happen is that the repaying of the 700 million plus interests will eat into the profits that Arsenal will generate. Which means lesser resources to compete with, more loans to repay and in case some untoward happens its infinitely more damaging to the club.

This is not the last time we are going to hear of this story, I’m sure it’s going to take up a lot of column inches in the back pages in the summer. Most likely idle gossip but what make the equation interesting is Double-D (David Dein) has sided with the Yank and is his 14.6% stake in the club going to have a say? Time will answer that question. The other members of the board positively baulked at the very notion of an American owing the club and so have many of the fans.

So there, the fans, I think are far more concerned about the financial side of the Football Club rather than the sentimental side. Finally, for the fans, the welfare of the club is paramount. If Kroenke was good for the club he will be welcomed with open arms rather than with pickets saying “Go Away, Stan”.

Posted by Vi on Friday, May 4th, 2007 at 1:31 pm.