Stan Kroenke is one of the world’s wealthiest businessman, but what do we know about him and his intentions for Arsenal?
If you wanted to know anything about Stan Kroenke, the fact that his plans for Arsenal are still unknown after years of ownership should tell you plenty. Whereas many new football club owners arrive to much fanfare and bravado, Kroenke arrived as silent as his reputation suggested. Arsenal may have been under new ownership, but it was very much a case of “as you were”. The arrival of a man now worth $4.6bn was about as lowkey as the club signing an unknown kid from the French second division.
Nowadays, his name is on everyone’s lips, but not for the right reasons. Success didn’t follow his arrival, and many now wonder if it ever will come while he’s still in charge. Fans expected some of his overwhelming wealth to make a difference, but reality turned out very differently. A look into his background as a person and businessman, though, suggested this was always going to the case.
Kroenke is a well-educated individual. He has Bachelors in Arts and Science, as well as a Masters in Business Administration from the University of Missouri. In an interview with the Telegraph, he championed the value of good education and believes it’s been crucial to his success as a businessman.
His first lucrative ventures as a businessman were in real estate. He founded the Kroenke Group in 1983, and specialised in building shopping centres and apartment buildings. He had the considerable advantage of being married to Ann Walton, the daughter of James Walton and heiress to the Wal-Mart fortune. With this connection on his side, he could build and develop plazas near Wal-Mart stores. Then, he came even wealthier when James Walton passed away, and he and Ann Walton inherited a stake in Wal-Mart Stores Inc.
It was in 1999 that Kroenke started up Kroenke Sports & Entertainment and began investing in American sports franchises. It wasn’t until 2007 that he took an interest in an Arsenal. His primary motivation, according to Larry DeGaris, an associate professor of sports marketing at the University of Indianapolis and former head of research for a sports marketing firm in Denver, was to enter a market that has far more global growth opportunities than American sports did. Arsenal, a club at the time that had yet to embrace its status as a world-wide brand, was ripe for the picking.
Kroenke was introduced to Arsenal by former vice-chairman David Dein. Dein was concerned about Arsenal’s ability to compete with the financial might of Chelsea and Manchester United, especially as the club was hamstrung by the construction of the Emirates Stadium. He felt that Arsenal needed extra investment from the outside to give Arsene Wenger the best players possible and continue challenging for major honours.
The Arsenal board, though, were not keen on this idea. It was this incident that fractured the relationship between them and Dein, until the two parted ways in 2008. Dein’s response was to sell his shares to another billionaire: Alisher Usmanov. The Arsenal board responded to that by giving Stan Kroenke a seat on the board. Gradually, Kroenke’s amassed enough shares to become majority shareholder and gain full control of the club in 2011.
Kroenke’s portfolio of sports franchises was extensive before the takeover. American franchises Los Angeles Rams, Denver Nuggets, Colorado Avalanche, Colorado Rapids, and Colorado Avelanche were already a part of Kroenke Sports & Entertainment. A look at the management and successes of their franchises back then suggested that the American wasn’t about to usher in an Roman Abramovich-style era of heavy investment. In fact, it would be quite the opposite. Heavy investment wasn’t a part of the Kroenke business model.
“For me, being an individual owner, I have to have some sort of reality involved,” he said at the Evolution of Ownership panel in 2016.
“If you want to win championships then you would never get involved. I think the best owners in sports are the guys that sort of watch both sides a bit. If you don’t have a good business then you can’t really afford to go out and get the best players unless you just want to rely on other sources of income.
“Over there [in the UK] it was sort of like ‘well, we’ve got guys from the Middle East, the oil price is over $100, they can spend anything they want’.
“But the problem I saw with all of that; those people can lose interest. It doesn’t mean that they will, but I sort of threw that out there: ‘What happens when the Middle Eastern family, this thing’s costing a lot of money and they decide to go home?’ I said what really happens in those situations is the fans get hurt because the players get picked up and paid if they’re good, the front office gets other jobs.”
The nature of American sports makes it very difficult to compare them to English football. The two operate on very different systems and principles, such as the widespread usage of a salary cap and player drafts, and sustained success over a long period of time is difficult for one team to achieve. Nonetheless, it’s striking how little success Kroenke’s teams have had. Take, for example, Major League Soccer side Colorado Rapids. One MLS Cup in 2010 was followed by one play-off quarter-final, one knockout appearance, and three years without even qualifying. A 2nd place finish in the Western Conference and a play-off semi-final appearance in 2016 was an outlier; 2017 saw them finish 11th.
The salary cap and draft system are designed to bring parity to America’s sports. In the NFL, 40% of the teams reach the playoffs every year, but Kroenke’s St. Louis Rams was seldom one of them. In fact, the last time they reached the playoff was in 2004. Meanwhile, Kroenke has persisted with a coach who was moments away from breaking the record for most losses in NFL history, even rewarding him with a new two-year contract in 2016. Two games later, and after all the pre-season preparation had been completed he was sacked. If this is beginning to sound familiar, it gets even more uncanny: one of the Rams’ best players, Aaron Donald, doesn’t want to extend his contract with the club.
Kroenke’s club was not just failing, it was also screwing over fans. In January 2016, the NFL approved the relocation of the St. Louis Rams to Los Angeles, leaving behind an unpaid loan of millions of dollars for taxpayers to pay off. A breakdown in the Turf Show Times revealed this wasn’t an amicable move. St. Louis, as a city, was blamed for not having enough interest, despite Kroenke’s continued investment: he spent to the salary cap, and increased the coaching and scouting budgets.
For Kroenke, then, “fan apathy” was the reason behind moving the Rams from St. Louis to Los Angeles. He appears to have a dim view of supporters in general, if his interview with the Daily Telegraph is anything to by. He told the paper, just a day before he was due to “meet” shareholders at the club’s annual general meeting, that fans were both a blessing and a curse.
“Sports fans are wonderful,” he said
“The best thing is the rabid fans… the worst thing is the rabid fans.
“They are passionate about the club, they have the right to their opinions and the only part I worry about is how it affects the players and the coaching staff. It can have a bad effect on that group and that’s the last group you want it to have a bad effect upon.
“That’s how I look at it.”
It shouldn’t be a surprise, then, that Kroenke was in no mood to entertain the growing fan sentiment that Arsene Wenger’s time at the club should come to an end. While fans were gathering outside of the Emirates Stadium to let their feelings known, there was little doubt about how Kroenke felt about the situation. There was no danger of that long reported two-year extension ever leaving the table.
The self-patting on the back Kroenke did for his investment in the Rams sounds very much like the crowing of Ivan Gazidis about Arsenal’s “unprecedented” investment in their own squad. The questions about the lack of success on the pitch were nimbly dodged and then buried under boasting of how much the club has spent on players, how healthy its financial situation is, and how they were constantly improving behind the scenes.
The trend appears to be that despite abject failure staring him in the face, Kroenke refuses to be a man of action. Rather, the less he seemingly has to do, the better. He was likely delighted to have a manager like Arsene Wenger at Arsenal; someone who was prepared to look after everything, from the club’s finances down to the youth teams, and front up the media no matter what the situation. On paper, following a policy of non-interference and allowing the experts to have full control is a good plan, but it has a fatal flaw: Kroenke doesn’t have the ability to identify who those experts are. Arsenal haven’t quite reached Venkys-at-Blackburn bad yet, but are currently being driven by people who have the map upside down, while Kroenke sits in the back seat playing with his phone.
While Kroenke was disparaging of “rabid” fans, he was awfully keen to proclaim his love for Arsenal and long-term commitment to the club. He urged fans to look at his track record and see that he doesn’t sell. That selling for big money has no value to him now. Meanwhile, the club’s value has grown and grown, to the point where the number of businessman capable and willing to take over dwindles by the year. The club isn’t setting itself up for sustained success on the pitch, and the owners aren’t planning a big, juicy sale off the pitch, either. So just what is being planned for Arsenal?
The fears were that Kroenke would buy Alisher Usmanov’s 30% stake in the club and squeeze out the remaining shareholders as now seems to be happening. With full control of the club, he would make it a private business. The club would stop publishing its financial accounts for the public to scrutinise, and cease any dialogue with the supporters if it wanted. In effect, it could close off any connection between the fans and the administration, and, in the process, hide away from accountability.
In effect, it wouldn’t be too different to what the situation is now. The public financial accounts are useful, as it allows anyone the power to see just how healthy the club’s finances and bust the myth that Arsenal are somehow a poor and struggling club who can’t compete. Beyond that, though, accountability has never been something Stan Kroenke values. Shareholders have the privilege of experiencing this once a year at the general meeting. Questions are asked, but answers are either unsatisfactory or not given. Then the event is closed in farce, with Sir Chips Keswick letting his disdain for Arsenal fans the most memorable part of his rare public appearances. Fan influence is at an all-time low.
However, such a move would symbolise the ever-increasing divide between the club and the fans. Arsenal would feel more corporate than it ever has, its fate completely in the hands of someone who is neither competent nor trustworthy. This process arguably began the moment Kroenke became majority shareholder; the moment the club stopped being about the custodians and more about the whims of a dwindling group of big influencers.
The only thing that’s prevented such a thing from occurring so far has been the cold war between Kroenke and Usmanov. They’ve each had a go at each other’s shares, and have each rejected with the same sentiment: there’s no way in hell I’m selling to you. It’s in this scenario that Usmanov has become a reluctant saviour for the Arsenal fans. He himself is embroiled in controversy and dubious practices, but he was the only major influencer not on Kroenke’s side. It’s a precarious situation, to say the least.
On the pitch, predicting the future under Kroenke is a little more difficult. His track record of picking coaches for his American franchises is abysmal, but in football its new territory. In this case, much depends on Ivan Gazidis who could be leaving for Milan by the end of the month, the one figure at the club who has championed of change. Whereas American sports are limited by salary caps and drafts, football is a free market where heavy investment in managers and players often correlates with success. As long as the club remains wealthy and willing to spend – and if we’re being fair, it has spent a great deal since 2013 – it could stumble upon the right combination for success. At the same time, it could just as easily throw money away on incompetent people.
The future of the club is ironically uncertain, given how often stability and continuity are said to be key traits. Kroenke has said that the club’s aim is trophies, but actions speak louder than words, and the club’s action suggests it is, at best, confused about how to challenge for major honours.
In a volatile landscape where clubs from all around the world are actively pursuing success, Kroenke’s actions could ultimately hold Arsenal back, if it hasn’t done so already.
We can only hope that the foundations are being laid off the pitch to keep everything steady.