It may turn out that this week will have been one of the most pivotal weeks in Arsenal history.
Maybe the point gained (or two points lost) at Anfield on Wednesday will decide the league title in our favour (or not). Maybe the signing of Mohamed Elneny will prove to be the extra boost we need to get us through the rest of the season. But there was an event that occurred last Tuesday evening almost 5,000 miles away from Arsenal that could potentially overshadow both of the above, even if they both lead to silverware.
Ever since April 2011, when Stan Kroenke became the majority owner of Arsenal, there has been little in the way of evidence shown as to what Kroenke’s long-term plans are for the club. Is it an investment based on rising TV money increasing the value of the club over time, or an opportunity to take regular dividends out of a company already profitable enough for such an action to be viable?
Almost five years of radio silence, bar the occasional paragraph at an AGM, hasn’t helped matters. A less than satisfactory explanation for the £3m payment to a company owned by Kroenke for ‘services’, certainly hasn’t done anything to dissuade fans from thinking that Kroenke will use Arsenal as a cash pot to dip into from time to time. What happened in Houston on Tuesday may have shed some light on this.
As we all know, Kroenke’s sporting interests go far past just Arsenal. His portfolio of teams include the Colorado Avalanche of the NHL, the Colorado Rapids of the MLS, the Denver Nuggets of the NBA and the St. Louis Rams of the NFL. For those of you not that familiar with American geography, the first three teams all play in Denver, the latter play in Missouri. The first three are all purely financial investments. The Rams… not so much.
Kroenke bought 20% of the Rams in 1993, and was the main catalyst for the Rams moving in 1994, from their then base in Los Angeles to his home state, Missouri. The home-town boy had come good, and he’d brought an NFL team back home with him. If there was ever a franchise that he had an emotional connection with, the St. Louis Rams were that team.
On Tuesday, after a long battle with the local council, and exhaustive negotiations with the other team owners in the NFL, Kroenke took the team that he brought home back to Los Angeles. Why? Because the St. Louis city government wouldn’t give him enough money to build a new stadium there. How much would have been enough to keep the Rams in St. Louis?
Basically, Kroenke wanted a new stadium in St. Louis, and he wanted the council to pay half of the building costs. It’s a ploy used by many owners in American sport in order to blackmail politicians into handing over public funds to keep the team ‘home’. Just take a look at this for an example. $645m of taxpayers money, spent on a stadium for a billionaire’s baseball team. It’s insane, but it frequently works. The Minnesota Vikings just got almost $500m in public money to build a new stadium. The Atlanta Falcons got $200m to build theirs. The San Francisco 49ers got almost $100m. The list is endless.
What has all of this got to do with Arsenal? Well, moving an NFL franchise is not easy, and is hugely expensive. It’s made this way by the owners themselves to stop someone from just moving a team from city to city every couple of years. It’s also to protect their own interests, as another team moving into their local market would harm their own bottom line, but they don’t mention that.
So for Kroenke to pack up the St. Louis Rams into a big box and move to Los Angeles, he had to write a cheque to the other 31 NFL team owners as a means of compensating them on any lost business they might have got in Los Angeles, but now won’t get because the Rams are there now.
He also has to put the funds for his new stadium in L. A. into escrow to prove that he has the money to build it. And whilst the L. A. council aren’t giving him any money towards the stadium, the land he and his investment company bought was so cheap, paying for the stadium himself is merely a small hurdle towards making a fortune down the road.
But that small hurdle arrived on Tuesday. This was when, after it was voted for by the owners that Kroenke could move the Rams, he had to write the cheque for the relocation fee to the owners AND the money required to fund the stadium.
That cheque was for just over $1.5 BILLION.
$1.5 billion to take his home-town team elsewhere. Will he make that money back in time? Almost certainly, but still, it’s a startling indicator to how Kroenke views the teams he owns, as investments and nothing more than that.
If he’s willing to shaft his own home state out of their team in order for personal gain, it doesn’t bode well for those of us who hope that he treats Arsenal better. And with $1.5 billion suddenly missing from his bank account, he may not want his most profitable franchise to be too extravagant with transfers for the near future. It would certainly explain Arsenal’s lack of transfer activity last summer if there was an instruction from above to keep spending under wraps for a bit.
Does this mean that Kroenke is about to asset-strip the club and fleece it dry? No. But all of his other franchises have been run in a way that is designed to make them financially successful, but not necessarily successful in terms of trophies. As long as a team doesn’t perform in a way that decreases its value, in the way that Aston Villa is costing Randy Lerner a fortune with every loss, then he’s okay with it.
That leaves Arsenal with an owner who doesn’t like spending money on his teams, unafraid of upsetting a fan base in order to make personal gains, and is down $1.5 billion since Tuesday.