R&W's letter to the board

[Jay29]

http://news.arseblog.com/2012/07/full-text-of-usmanov-letter-to-the-arsenal-board/

or

http://www.bbc.co.uk/sport/0/football/18725835

Shit, meet fan.

It's an amazing coincidence that this letter comes out a day after van Persie's statement, isn't it?

Let us not forget that we have invested circa £200 million of cash in the equity of the Club. We are part of this club and naturally want the best of it, but our investment is less important than the fact that we are loyal supporters and would never do anything to destabilize or "create conflict" at the club.

Hilarious, really, since that is exactly what Usmanov and his crew are trying to do. The rest of the letter goes on to accuse the shareholders of planning long-term and squeezing the fans to fill their own pockets and not help the club. They then lay out their own vision of the future - to spend a lot of money in order to win things, citing the need to match the likes of Real Madrid, Barcelona, Chelsea, Man City and Man Utd financially.

It shouldn't escape anyone's notice that those are viewpoints shared by a lot of fans.

Evidently, this is a PR stunt designed to win the favour of the fans on the eve of a statement that already has some fans in doubt about the club and its board. On the surface, it looks like genuine concern, but it really is just a power-play; an attempt to gain control.

And it might have worked, because some of those concerns are real, even if we don't want to admit they are. However, the timing of this letter makes their intentions horribly transparent. That doesn't work well in their favour.

This whole thing concerns me. Not because it's Usmanov, but because this whole thing will create further division in the fans. The last thing this club needs right now is conflict, but yet here we are, with two public statements that have served to do just that.

And this summer started off so well.

[Sri]

i cant access the link Jay..

[Jay29]

Sorry about the link. I've provided an alternative. Should work.

[RealGunner]

Usmanov striking the iron while it's hot

The letter was written long time ago but they just published it at the time where it would suit them the most.

I agree with half the letter personally, This is what all the fans have been saying. But obviously he has a double agenda, he is playing with fan's emotion to win a place for himself.

But there is not a lot wrong with what he said. I hope for the fan's sake our board do something which proves Usmanov wrong. It can be a win win situation for us in the end. But Usmanov isn't wrong when he says the board isn't exactly having a great time with the fans and the players.

Finally, i am against a Rich owner. But If Usmanov can work with Kroenke, that may be the best outcome for all of us

[Mudcat]

Totally self-serving, even if it makes a few valid points along the way. Usmanov is simply taking this opportunity to do a bit of grandstanding in his effort to sway public opinion in his direction as he tries to wrest control of the club from Kroenke.

Personally, I do not want Arsenal to become a billionaire's plaything like Manchester City and Chelsea. It seems that the club has the intention to be more proactive this summer as indicated by the early acquisitions of Podolski and Giroud. Was this the result of the club being fairly certain that Van Persie would leave? I don't know. But either way it is a step in the right direction. Let's see where the rest of the summer leads us; how much Arsenal gets for Van Persie and others destined to be offloaded, how they spend that money and whether or not they're willing to chip in a bit over that. I do not think the sky is falling, but this letter will certainly feed the impression that it is among those who are inclined to think so.

[MJ]

The ulterior motives at work here are painfully obvious but this letter will hit home with those unable or unwilling to acknowledge the timing of it's release. It does make some valid points but the underlying agenda is much more dangerous for Arsenal's future.

[Raptorgunner]

Everyone is saying we dont need a rich owner but how long will you go losing player after player to richer teams. This will never end and every year we will struggle to keep our best players.

I want a owner that will go after other teams big players and will show teams like City and Chelsea if you come after my players I will come after your players. We are a joke the way we losing players, how long will this board sit there and do nothing about the players leaving.

I knew something fishy was going on when we signed Podolski and giroud so fast. I dont really care much about RVP and I really thought its a big gamble to sign him and we would be stuck with him for another few years.

I want the best for Arsenal and I want a owner who would give take us to next level. Stan is not the right man for Arsenal and he has no love for the game, if he did he would show some ambitions.

[Mudcat]

It makes no sense to me to blame Stan Kroenke for whatever troubles Arsenal may be perceived to have. The guy has only been the primary owner for one year. As for his "love for the game," well, the guy does own two clubs, so the game must hold some interest for him.

Arsenal should not be run like a toy for feeding a wealthy man's ego. Arsenal is one of the few clubs that is in decent financial shape these days. Manchester City lost nearly 200 million pounds last year -- and the year before. That might not mean anything to the owners, but it does mean something to FIFA as the financial fair play rules kick in. Manchester United is about to float the club on the New York Stock Exchange to raise cash. Arsenal made a nice, healthy profit and should be in good financial shape for many years to come. Arsenal is looking to the future, not mortgaging it.

[TalkingReckless]

How long as Stan been our owner?

[Raptorgunner]

It makes no sense to me to blame Stan Kroenke for whatever troubles Arsenal may be perceived to have. The guy has only been the primary owner for one year. As for his "love for the game," well, the guy does own two clubs, so the game must hold some interest for him.

Arsenal should not be run like a toy for feeding a wealthy man's ego. Arsenal is one of the few clubs that is in decent financial shape these days. Manchester City lost nearly 200 million pounds last year -- and the year before. That might not mean anything to the owners, but it does mean something to FIFA as the financial fair play rules kick in. Manchester United is about to float the club on the New York Stock Exchange to raise cash. Arsenal made a nice, healthy profit and should be in good financial shape for many years to come. Arsenal is looking to the future, not mortgaging it.

I agree with you but I still want an owner that will stand up to other big spenders. We dont need to spend crazy money just hold on to our big name players.

Losing RVP is nothing to me, but what it will do to others players will bother me. We have great young players who are coming up and will be big stars and if we continue to allow them to leave because other teams give more money not sure what is the point of having Stan.

[Sri]

*bleep* Financial Fair Play. When a team can get 400million for naming a *bleep* stadium, who gives a hoot about this shit any more.

[Jay29]

Regardless of any loopholes, we have to comply with the rules since UEFA aren't going to change their minds at this stage.

[Sri]

Regardless of any loopholes, we have to comply with the rules since UEFA aren't going to change their minds at this stage.

Yes, but you see, there are loop holes. And us adopting a holier-than-thou attitude is not particularly helpful. Lets be realistic here, there is no trophy for playing by the rules.

I am not saying I agree with R&W and a change. But I think it is high time this board gave some answers. They can not hide behind the 'financial restrictions caused by new stadium' for ever. Its a paper thin defense as it is now.

God save the fans from the impending shit storm now.

[Jay29]

What answers are you looking for? You can just check the club's financial results to see where the money is being made and lost. The club has never hid the fact that commercially they're far behind their rivals, and have had to up ticket prices to cover the deficit. We know full well when that situation can be resolved. Also, it's plainly apparent in recent results that the only reason why profits have been made is because we've sold players for high fees.

I understand the frustration of losing our best players, but you can't just say "screw FFP". Not as this point. I'm not saying it's going to be our holy grail or anything like that, but rules are rules, and I'd rather we play by them and not risk the potential repercussions. By all means, expose a few loopholes along the way, but we're too far in for any radical change in business model.

[Sri]

What answers are you looking for? You can just check the club's financial results to see where the money is being made and lost. The club has never hid the fact that commercially they're far behind their rivals, and have had to up ticket prices to cover the deficit. We know full well when that situation can be resolved. Also, it's plainly apparent in recent results that the only reason why profits have been made is because we've sold players for high fees.

I understand the frustration of losing our best players, but you can't just say "screw FFP". Not as this point. I'm not saying it's going to be our holy grail or anything like that, but rules are rules, and I'd rather we play by them and not risk the potential repercussions. By all means, expose a few loopholes along the way, but we're too far in for any radical change in business model.

Don't get me wrong - I am not suggesting in any way that we should go along the same path. I still have (waning) belief in our model. Nor do I endorse R&W issuing this open letter PR stuff.

My point is, people should stop thinking of FFP as the solution. It is an ideal, and as with the case with most ideals, far removed from reality. There are obvious loopholes. And nobody, not even Arsenal, will say no to exploiting a known loophole.

R&W letter mentions Arsenal approaching a Russian phone company owned by Usmanov for shirt sponsorship. Who is to say that we won't accept a shirt sponsor who may pay 10x of Emirates, even if its Usmanov's company? If a bidder for shirts or stadium naming is owned by Usmanov, and makes the highest sponsorship offer, would the board say no, just because its Usmanov?

I am not saying Usmanov is so altruistic that he would do that just to pump in money into the club. But if I were a multibillionaire Arsenal fan with huge resources at my disposal, I would try to give money to the club in some way possible. Today I can afford to buy 2 shirts a season. In ten years I can buy a season ticket maybe. If I strike a fortune, I would use my company as a sponsor for the club. And each of you would do the same. Because we all love the club.

Mind you. Again. I am not approving of Usmanov or R&W or the money spending. I am just saying that if commercial deals can be the loop hole of FFP, people will look to exploit it. And if everyone does that, then FFP is worthless.

[Sri]

And btw, Jay, the answer I seek is simple.

We have known we are lagging commercially because of the long term deals we are in. And that is hurting us. But clubs which are rich without oil money, the likes of Real Madrid, Manchester United or Bayern Munich, are reliant on their branding and commercial engagements as well. These clubs have had onfield success which has helped to promote their brand. We want to build a brand on the basis of our ideals for football and our idealist business model.

The competition is selling its brand based on success. We are selling a brand based on ideals, and promise of future success. All of these clubs have rich history to draw on. All these clubs have massive global fan bases.

These competing clubs also have globally acclaimed mega stars. The likes of Rooney, Cronaldo and Schweinstieger to name some. These names help drive revenues further.

How do the names like Fabregas or RvP drive our revenue year after year if we sell them? It isn't a sustainable revenue stream commercially when you sell your best players year after year. And then you stop portraying yourself as a super club, and the masses look at you as a feeder club which sells its star players. That hurts the brand image. And when your brand image is hurt, so are the commercial revenues you are looking to build up.

We are saying the new deals will rectify a part of the problem when that time comes. I say that is a convenient way of postponing any thought on the matter. There is absolutely no guarantee that any business oriented sponsor would want to invest the same money in Arsenal as they would in Chelsea or Man Utd, because these clubs have sustained their success in the recent time. You can bank on our history to get us major sponsorship, a la that Liverpool kit deal, only to a certain extent. Don't forget, on local turf, we have two other relatively big clubs in Spuds (YUCK) and Chelski, in London itself. I don't live in London, but I see this as a three way split in the London fan base. (I don't mean the people who have lived there for decades). Anyway, I digress here.

Btw, you know anything of the non divident equity stuff? I have no clue about economics and I want to know what that deal is about and why our board is against it. R&W letter paints it as a golden egg. IIRC; they promoted that idea last summer as well, when they said it would give AW a 100 million war chest and made quite a few jaws drop.

Could someone explain that part to me?

[beatrixasdfghjk.]

I thought we hadn't paid dividends in years anyway?
.

[kiranr]

Srigooner, the board is against selling equity to get rid of the debt because it dilutes the shareholding of the existing investors.

Diluted shareholding means less stake in the club and hence lower potential value of the existing holdings.

[Sri]

Srigooner, the board is against selling equity to get rid of the debt because it dilutes the shareholding of the existing investors.

Diluted shareholding means less stake in the club and hence lower potential value of the existing holdings.

Thanks kiranr! Explains a bit. Still need to dig more into this to understand exactly what is implied..

[Raptorgunner]

Srigooner, the board is against selling equity to get rid of the debt because it dilutes the shareholding of the existing investors.

Diluted shareholding means less stake in the club and hence lower potential value of the existing holdings.

Thanks man.

[Jay29]

Mind you. Again. I am not approving of Usmanov or R&W or the money spending. I am just saying that if commercial deals can be the loop hole of FFP, people will look to exploit it. And if everyone does that, then FFP is worthless.

FFP was designed to prevent owners from investing mass amounts into the club in one go, not spending altogether. Clubs probably will sign a bunch of commercial deals to get the money they would have had from their owners otherwise, but at least that money comes in overtime and not straight away.

You also have to bare in mind that clubs like City and Chelsea aren't making profits right now, so even with a couple of lucrative deals, their spending power won't be nearly as great. If that turns out to be the case, then FFP has done its job.

I agree with you that we should not be dependant on FFP, but as I've said before, it's happening. By all means, if we can exploit a few loopholes, we should. I have nothing against that.

We are saying the new deals will rectify a part of the problem when that time comes. I say that is a convenient way of postponing any thought on the matter. There is absolutely no guarantee that any business oriented sponsor would want to invest the same money in Arsenal as they would in Chelsea or Man Utd, because these clubs have sustained their success in the recent time. You can bank on our history to get us major sponsorship, a la that Liverpool kit deal, only to a certain extent. Don't forget, on local turf, we have two other relatively big clubs in Spuds (YUCK) and Chelski, in London itself. I don't live in London, but I see this as a three way split in the London fan base. (I don't mean the people who have lived there for decades). Anyway, I digress here.

I don't think anyone can reasonably expect us to get commercial deals on the same level as Man Utd.

There will be brands out there willing to pay us a lot of money, simply because we're a very popular club - probably more so than Spurs, Liverpool and Chelsea. Ultimately, what we need is a better deal that will catch us up with the rest. It will take years before we can even come close to United, Barcelona, Real Madrid and Bayern Munich.

To put it another way, the problem isn't that we're not earning the same as Man Utd, it's that our current deal falls woefully short of everyone else.

[Jay29]

Some typical Hill-Wood quotes on the situation:

http://www.guardian.co.uk/football/2012/jul/06/peter-hill-wood-arsenal-alisher-usmanov?CMP=twt_gu

The Arsenal chairman, Peter Hill-Wood, has staunchly defended the running of the club against the vitriolic criticism levelled against the board by the 30% owner, the Uzbek billionaire Alisher Usmanov. Hill-Wood maintained that Arsenal's policy of spending only what they earn is correct, as is the stance that the American majority owner Stan Kroenke, and former shareholders such as Hill-Wood who made millions selling their shares to Kroenke, should not be expected to put money into the club. Hill-Wood described Usmanov's attack on this approach, which Arsenal call a self-financing model, as "not at all helpful".

The chairman, who made £5.5m selling his shares to Kroenke, said the club provides Arsène Wenger with as much money as possible for players, but cannot compete with Manchester City's Abu Dhabi-backed wealth. At the end of a week in which Arsenal's captain, Robin van Persie, announced he will not sign a new contract, citing a lack of ambition for success, Hill-Wood said: "We don't have the same oil wealth that [City's owner] Sheikh Mansour has. He is prepared to pay astronomical figures for players; we cannot pay that sort of money, and we can't compete."

In his open letter to Arsenal's board on Thursday, Usmanov was scathing about the self-financing model, arguing it was, in effect, engineered by the former English shareholders, including Hill-Wood, to make personal fortunes. The owners' policy of not investing their own money in the club, Usmanov argued, meant Arsenal borrowed to build the Emirates Stadium (£260m), charge supporters very expensive ticket prices, yet still leave Wenger short of money to retain and sign star players.

"The self-financing model … allowed the major shareholders of the time … to benefit from [an] increase in the value of their holdings," the letter said. "All of these shareholders and board directors sold 100% of their holdings and cashed out at vast profits."

Alongside Hill-Wood pocketing £5.5m, the longstanding shareholder Richard Carr made more than £40m selling to Kroenke in 2009. Lady Nina Bracewell-Smith, who also inherited her Arsenal shares, made £116m selling them to Kroenke last year. Danny Fiszman, who bought into Arsenal in the 1990s, first with a portion of the former vice-chairman's David Dein's stake, made £160m, the final sale to Kroenke made just before Fiszman died last year.

Hill-Wood said making so much money from selling his shares was "nice", explaining: "You wouldn't say no to a few million pounds." But he rejected as "complete and utter rubbish" the accusation that the club was run deliberately to increase the value of his and the other owners' shares, at the expense of supporters and a robust budget for Wenger.

"It was nice to make that money, but I was never involved in Arsenal for that reason," Hill-Wood said. "I was involved because I have been brought up to love Arsenal and that is my only concern."

Of Usmanov's intervention, the Arsenal chairman said: "I do not know what is trying to do really, I don't think he is right."

Arsenal's summer has been disrupted by Van Persie's public announcement that he does not intend to renew his contract after, he said, being left unconvinced by the club's plans to compete for trophies. The departures of Gaël Clichy and Samir Nasri last summer to City, where they did win the Premier League, and of Cesc Fábregas, the previous captain-talisman, have left Arsenal looking like a selling club in the age of big-spending plutocrat owners. Usmanov argued that the owners should invest by paying off the stadium debt, which was still £98m and cost £15m in interest last year.

However Hill-Wood argued, as does the chief executive, Ivan Gazidis, that the financial penalties due for early repayment make that unviable.

"It's simple to say we should put some money in, but it doesn't make any sense," Hill-Wood said. "We can't pay off the debt without huge penalties, and putting money in for any other reason doesn't make any sense at all. We give the manager as much money as we possibly can, and all we can do is continue. We have run the club sensibly, and we haven't done badly; it's not as if we have been relegated."

Usmanov, with whom Kroenke does not communicate, is also critical of the executive team, who brought in £33m commercial income last year, £70m less than Manchester United. He points to the board too, saying it would benefit from younger people with more football and major sports club experience. Gazidis, 47, is Arsenal's youngest director; Kroenke is 65 this month, Hill-Wood 76, Sir "Chips" Keswick 72, Lord Harris of Peckham 69 and the long-serving administrative stalwart Ken Friar is 78.

Hill-Wood acknowledged: "It would be good to have some young people on the board, but it is not as easy for young people who have full-time jobs to do that now as it was when I was a young man. However I do not think there is anything different we can be doing in the running of Arsenal."

[SamuelJayC]

Arsenal chairman Peter Hill-Wood: "We give the manager as much money as we possibly can. We run the club sensibly." - http://bit.ly/N61X7f

[Mudcat]

This is pretty much on the money...

The man to trust at Arsenal is not RVP, Usmanov or Kroenke... it's Wenger

[Jay29]

Very good article that by and large sums up my own thoughts on the matter.

‘No! No! How can we lose him?’ they cry like giddy, teenage Justin Bieber fans. They demand ‘Wenger must answer for this — or go!’, summoning up all their ignorance and parading it on Twitter. These people are cretins. They should be ignored.

The problem at Arsenal lies all around Wenger. He is beseiged by squabbles in the boardroom, ungrateful whelps in the dressing room and idiotic comment in the chatrooms.

Here here.

He has no right to tell Wenger how to run the club. The Arsenal manager gave him his chance when Feyenoord dumped a young Van Persie on the transfer list for being a cocky pain in the backside.

The Dutchman has now repaid that debt by effectively trashing the quality of Wenger’s summer signings, Germany striker Lukas Podolski, a 27-year-old striker with more than 100 caps, and the France international and Ligue 1 top scorer, Olivier Giroud, for a combined total of £24million.

By any measure, that’s great business. And it is also worth reminding everyone at this point that these excellent acquisitions have been added to a squad that finished third in the table last season.

That’s right, poor Arsenal. They finished ‘only’ third in the most lucrative and competitive league in the world, behind a Manchester City that spent more money than Croesus to claim the title.

The things that most fans have conveniently forgotten in all this mess.

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