I read Le-grove.
Yes, I know; but Pedro a la Peter has been of immense help to me and I’ve known him for 4 years now.
What you see is what you get from the lad. Pretty straight forward; sometimes rescinds on some of his opinions but, who doesn’t? Did you ever think we’d be able to sign a Sanchez when we did? Did you ever think we’d do a Cech? See what I mean?
So, I was on Le-grove yesterday trying to get my daily tonic of vitriol from some Le-grove readers when I saw Pedro’s reference to an article on World Football. Could this be the reason Arsene’s not spending?
Read:
….”Before I go, this little snippet from the brilliant Matt Scott over at Inside Football.
‘The takeover added Arsenal to the other assets in the American’s Kroenke Sports Enterprises (KSE) holding company. This comprises a range of US sports teams: Colorado Rapids (soccer), Mammoth (Lacrosse), Avalanche (ice hockey) and Crush (indoor American football), the Denver Nuggets (basketball) and the St Louis Rams (American football). This multi-billion dollar portfolio of assets has not been built without recourse to debt. How much debt, it is impossible to see. Kroenke Sports Enterprises is located in Delaware, a secrecy jurisdiction that places no obligation on corporate entities to make their accounts public.
What is known is that at the time when Kroenke was fast growing his portfolio of sports assets (he completed his Rams takeover with an acquisition of 60% of its share capital in August 2010, less than eight months before paying £250 million to take his shareholding in Arsenal beyond 60%) the global financial system was in the depths of a crisis.
It is routine for lenders to impose covenants on borrowers that dictate the maximum permitted gearing in a business. Gearing is the ratio between a business’s net debt and its assets. This gives rise to the intriguing possibility that, by quickly reducing the overall indebtedness of Arsenal and keeping cash in the bank unspent, KSE was able to offset debts in other group companies. This would mean Arsenal’s tremendous capacity for cash generation was being used to satisfy lenders to the US sports conglomerate.
There is no way of knowing for sure that this is the case, because Delaware accounting is not transparent and a man known to US media as ‘Silent Stan’ is unlikely ever to make public sensitive details on his financing arrangements. But I once asked Gazidis about this theory and he said he “did not know”, adding he “would be surprised” if it were the case.
One thing is for sure though: Kroenke, who seldom attends matches, is not in Arsenal for the fun of it. It seems instead that making money is the motivation. For instance, although the club has never once paid a dividend since becoming a plc, there is nothing in the 2011 takeover document to restrict Kroenke from drawing cash dividends from the club in future. A close associate of his once asked me: “What is wrong with a sports owner wanting to take dividends?”
The answer, of course, is nothing – provided performances on the pitch are satisfactory. It is clear what the fans think about those, and even Gazidis admits seasons past have represented failure. “We were disappointed that we weren’t competing for trophies,” he said in the summer.
For now Kroenke is not overtly drawing dividends, unlike the Glazer family whose 2005 leveraged buyout of Manchester United has openly used the club’s own cash to pay takeover loans. But if on 3 September Arsenal’s cash sits unspent in the bank, the suspicion will grow that he is servicing a similarly debilitating LBO in another, almost-invisible way.’
“Makes you think, right? Have a great day.
What do you think? It probably was never Wenger’s fault.
