If he is not back soon in some capacity then I don't expect Wenger to renew his contract or maybe even see it out.
Imagine him (Wenger) ending up at Chelsea or Man Utd! All very interesting if you like that sort of thing, which I do.
I dont know if Arsenal fans will agree but I think its a bit sad if Arsenal go down the billionaire Yank owner route.
A club with great history and traditions run in the right way but since their move to the Emirates the whole package has got a more American feel to it.
Top 4 will all be run by foreigners with ridiculous money to satisfy their latest hobby and the gap will get wider and wider.
they gave up their history when they left Highbury.
Would say that Arsenal fans will regret it in years to come, but i think they've been so swamped in recent years with the new-age Thierry Henry followers that they won't.
Agree with AFKA here. They've moved grounds to keep up with the times and in doing so left their history behind. A new American style bowl arena, soon-to-be American owner, and most weeks not a single English player turning out for them.
There has been a lot of overseas investment but in particular from the US. Perhaps they see the ownership of a sports franchise as fun or a status symbol that they can afford. There may well be benefits in terms of profile or connections to US franchises but it is difficult to make a profit on turnover even with the huge amounts of money coming from SKY and UEFA that would match what you could get from sticking it on the money market or in the Halifax.
Maybe they see it as an investment which they can sell on a profit in a few years or perhaps just want to milk the income and quit. Just can't see how the business model (other than at Man Utd where the club is effectively buying itself) works.
i thought Newcastle were already in the process of being bought ?
As you say, its a strange one from a business model perspective. Perhaps its a combination of having to park funds overseas, the ability to extend the debt on the club thereby not actually outlaying too much, ego, wanting to create a global brand, knowing that tv income at the top level is only likely to increase, i don't know.
Something to do with the ever increasing revenue of TV money perhaps, not sure its gonna last though, and after all there can only be one winner (or four-six) in terms of Europe, so there is perhaps scope for up to 10 teams to do this. Purely in terms of investment, some of the lesser clubs would be a far better investment, Chelsea and Westham for example, providing you are prepared to put some dough in.
"There has been a lot of overseas investment but in particular from the US. Perhaps they see the ownership of a sports franchise as fun or a status symbol that they can afford"
Follow the money Henry...
A combination of factors, American sport is saturated in terms of its earning power, Fox has taken over baseball, ESPN pays stupid money to televise sport - whether basketball, baseball, American football, Ice Hockey etc. The owners of these franchises (as they call their teams) have and continue to rake in stupid amounts of money. Where can they expand in America? There are few avenues left open once you've got your stake in a baseball/basketball etc team.
English football has suddenly become attractive with the new three year Sky/Setanta deal, which is for £1.7bn, bear in mind that the team that finishes bottom of the EPL next season will earn £30m in in prize money - more than Man U or Chelsea will get for winning this year's EPL, while next year's winners will earm £50m more than was on offer this year. The overseas rights to EPL games alone were sold for something like a collective £625m - over double the last contract, and again this is just a three year contract. With Champions League football more-or-less guaranteed for the top teams that's another revenue stream (Liverpool made around £20m in the year they won the CL) to add on plus the top teams have started touring Asia in pre-season friendlies, which is sales pitch to sell premium rate subscriptions to their TV channels.
My guess is that Dein wanted to sell to Stan Kroenke, who bought a 9.9% stake in Arsenal that ITV held and that the rest of the board have said no way. Currently Arsenal don't need the money, the Hill-Wood family and one or two other long-term investors own around half the club between them and apparently they have no interest in selling.
"There has been a lot of overseas investment but in particular from the US. Perhaps they see the ownership of a sports franchise as fun or a status symbol that they can afford"
This is a subject I have followed closely and written a lot of stuff on for work and its really quite simple: Cheap Money.
Banks are lending money to these private investors and private equity firms at historically low rates so the investor can buy the asset using borrowed money and not really have to risk too much of their own capital. The basic idea is the same as always, trim the fat off the asset and get it as lean as possible and then sell it on to someone else. The banks are happy to lend the money because they generate massive fees from arranging the loans.
The problem comes when the bubble bursts and all the potential investors get scared off, that's when the shit will hit the fan, quite literally in fact.
There is a lot of interest in the bigger EPL clubs from these type of buyers because these clubs produce a LOT of cash and are likely to produce even more cash when the next TV deal gets signed.
The only exception to the above would be Abrahmovich [he was rich enough to pay cash] and maybe Eggbertsson at the Spammers because he also seemed to pay with his own cash and does appear to be a football fan.
[cite]Posted By: AFKA Bartram[/cite]i thought Newcastle were already in the process of being bought ?
As you say, its a strange one from a business model perspective. Perhaps its a combination of having to park funds overseas, the ability to extend the debt on the club thereby not actually outlaying too much, ego, wanting to create a global brand, knowing that tv income at the top level is only likely to increase, i don't know.
There isn't much synergy as a brand between a European sport like football and American sports. I can't see say Arsenal fans rushing out to buy subscriptions to watch the Denver Nuggetts or any of the other teams owned by Kroenke, neither can I see Denver Nuggets fans rushing out to buy Arsenal shirts or feeling any kind of sporting kinship with them. It won't help sell TV rights as these are centrally controlled and negotiated by the EPL, so it won't give either the US or the English arm access to the other's markets. In essence it's about ego and making money and perhaps reflects that maybe US football (ie MLS) isn't really worth investing in just yet.
Phil Anschutz owns most of the MLS set-up and he's slowly selling his stakes in the clubs that he still has a stake in, while extending the league.
Plus the revenue in Football is better, in the US every bit of revenue is split, hence all teams in the NFL wear Reebok uniforms, all have the same drinks in the stadiums, etc etc, and that's why the NFL is an extermely competitive league. In this country, you do a deal with Nike and you pocket the cash, chose your own offical partners etc etc and why if your a big club, you stay a big club
With Arsenal, i thought it was Danny Fizsman who was the real power there. I thought it was him who pushed for the Emerites, and he holds 24% of the club, compared to the 0.5% Peter Hill-Wood owns.
I suspect the real problem comes from a difference of opinion between Fizsman and Dein.
This is a subject I have followed closely and written a lot of stuff on for work and its really quite simple: Cheap Money.
......
True, there's a lot of private equity capital washing about at the moment, they don't usually have shareholders as such to answer to, are cash rich themselves and like to invest heavily in cash generating machines and footie clubs are exactly that. With the new Sky/Setanta deal and other revenues you can be reasonably assured what revenue will be generated by the top footie clubs over the next few years and the cost base for football clubs isn't really that great.
[cite]Posted By: Rothko[/cite]Plus the revenue in Football is better, in the US every bit of revenue is split, hence all teams in the NFL wear Reebok uniforms, all have the same drinks in the stadiums, etc etc, and that's why the NFL is an extermely competitive league. In this country, you do a deal with Nike and you pocket the cash, chose your own offical partners etc etc and why if your a big club, you stay a big club
i think there is a lot in this argument. buying a franchise in a US sport and chucking loads of money at it does not guarantee success because of how the leagues tend to get their playing staff. This is very far from the case in Football. You chuck loads of money at a club and whilst you can't guarantee winning it certainly makes things a hell of a lot easier.
[cite]Posted By: Ormiston Addick[/cite]"There has been a lot of overseas investment but in particular from the US. Perhaps they see the ownership of a sports franchise as fun or a status symbol that they can afford"
This is a subject I have followed closely and written a lot of stuff on for work and its really quite simple: Cheap Money.
Banks are lending money to these private investors and private equity firms at historically low rates so the investor can buy the asset using borrowed money and not really have to risk too much of their own capital. The basic idea is the same as always, trim the fat off the asset and get it as lean as possible and then sell it on to someone else. The banks are happy to lend the money because they generate massive fees from arranging the loans.
The problem comes when the bubble bursts and all the potential investors get scared off, that's when the shit will hit the fan, quite literally in fact.
There is a lot of interest in the bigger EPL clubs from these type of buyers because these clubs produce a LOT of cash and are likely to produce even more cash when the next TV deal gets signed.
The only exception to the above would be Abrahmovich [he was rich enough to pay cash] and maybe Eggbertsson at the Spammers because he also seemed to pay with his own cash and does appear to be a football fan.
Interesting piece Ormiston. Would point out that Eggbertson has put in very little at Wast Ham, there is another Icelandic banker who has provided the bulk of the investment.
And the Americans at Millwall are also different as they have clearly bought into an urban regeneration project, not a football club.
But football in the UK is low or no profit on turnover, with high salary costs. There is also the uncontrolable risk of team performance having a major impact on income ie not reaching the Champions league or for another club relegation.
I see the point around cheap loans and cash businesses but still think it is high risk and potentially damaging to the "club" in the traditional sense of that word ie the team and fans.
[quote][cite]Posted By: AFKA Bartram[/cite]With Arsenal, i thought it was Danny Fizsman who was the real power there. I thought it was him who pushed for the Emerites, and he holds 24% of the club, compared to the 0.5% Peter Hill-Wood owns.
I suspect the real problem comes from a difference of opinion between Fizsman and Dein.[/quote]
According to reports Fiszman has sold a small chunk of his stake to Kroenke.
There are 62,219 shares in existence and Fiszman owns or owned just over 24%, Nina Bracewell-Smith owns around 16% (she inherited this from her grandfather), Kroenke owns nearly 12% and is thought to have a few more shares in the hands of supporters who bought small stakes recently. David Dein owns 14%, Richard Carr 4.4% and Peter Hill-Wood less than 1%.
unless this is all happening in advance of some Super League, where certain clubs are likely to become more like franchises. Thus, why the Americans in particular are getting interested ?
[cite]Posted By: Henry Irving[/cite]But football in the UK is low or no profit on turnover, with high salary costs. There is also the uncontrolable risk of team performance having a major impact on income ie not reaching the Champions league or for another club relegation.
I see the point around cheap loans and cash businesses but still think it is high risk and potentially damaging to the "club" in the traditional sense of that word ie the team and fans.
Arsenal made £16m profit last year (boosted by their run in the CL) and have a worldwide fan base of 27m. With players on long-term deals you have a rough knowledge of what the club will earn in a year and what outgoings will be, of course there is some variable revenue - Arsenal might not make the CL, or get KO'd in the group stages or screw up in the Third Round of the FA Cup etc. Salaries are a high component of the club turnover and an unfeasibly high one at that, but if you bring in new TV revenues and start tapping some of that 27m fan base then the equation looks a lot less shakey. As for the damage to the club...I always think it's cute the way one of the new directors confesses to always having been a long-term fan of the club that's being bought, despite being unable to find the place on a map the week before, and anyway I think football sold its soul a long time ago.
Naturally there's a lot of risk just as there is in any business venture, but I'd think there would be less risk in buying a top performing club with a large and loyal fan base than there would be in say buying Sainsburys. Look at us, we're there through thick and thin, relegation and promotion, do we have the same loyalty to other brands? If your local supermarket stopped offering a good service you'd happily go elsewhere, but we won't stop supporting the club, maybe we'd go less often, this new breed of owners are tapping into a great deal of emotional loyalty, and mercilessly exploiting it.
[cite]Posted By: AFKA Bartram[/cite]unless this is all happening in advance of some Super League, where certain clubs are likely to become more like franchises. Thus, why the Americans in particular are getting interested ?
As above, its a combination of the new TV deal, cheap money, the ability to rake in all the revenues going without having to share them with several other franchises and ego - one billionaire sees another buying a club and so he scouts around for the next club on offer. Never underestimate the power of people behaving in packs. Our football clubs look cheap in comparison to American sports clubs and these guys can't buy their way into clubs in Europe.
If it were a prelude to a European super-league, then you'd see stories of billionaires sniffing around Juventus, AC Milan etc. This appears to be an English phenomena, no doubt partly linguistic but mostly because this is where the real money lies, no other European league has the same global clout as the EPL.
[cite]Posted By: BlackForestReds[/cite]According to reports Fiszman has sold a small chunk of his stake to Kroenke.
According to the Guardian the other day, Fiszman "was approached by a broker to sell a few shares to make more of a market" and just rounded down his tranche to 15000 shares - the broker then sold them on to Kroenke.
Henry is right in saying that there are risks involved in investing in football but they are quite small in comparison to investing in, for example, a natural resources business where there might be all sorts of external factors at play. After all, apart from West Ham and Man City [who have always been yo-yo clubs to some extent] and Leeds [who over-capitalised disastrously] none of your blue-chip clubs [Man Utd, Arsenal, L'pool, Chelsea, Newcastle, Spurs, Villa, Everton] have been relegated from the Prem. The crucial selling point for the buyers here is that the TV rights will just keep going up and up, there is no way that they will be going down. That means that your essential revenue flow is secure because ticket revenues are now not the bread and butter, TV money is. The other point here is that a lot of the blue chip private equity firms [Bain Capital, Blackstone, KKR, Newbridge....] are fighting amongst themselves for the really huge private assets in the market like telcos and those kind of multi-billion dollar assets. That means that a lot of the smaller players, like these individual private investors, are forced to look a bit further afield at cheaper assets like football clubs to make their deals.
Oh yeah, to address another of Henry's points, I was told by a really, really senior PE man in Hong Kong about a telecoms firm being bought by a rival PE fund that most PE funds were not that bothered about the asset making huge profits as long as the revenues were there to pay off the interest on the loans with which the company was bought. The idea is to trim the asset quite fast and then sell it on within 18-30 months whilst the bubble still has enough air to another investor for a profit. The banks love this because they get an exit fee too when the PE fund pays back the loan. I am no expert but from what I know of the world of high finance and bankers most of them should be in the bloody nick!!!
Peter Hill-Wood, Chairman of the Company, would like to express his gratitude for the many years of loyal service given by David Dein to Arsenal Football Club and regrets that irreconcilable differences between Mr. Dein and the rest of the board have necessitated a parting of the ways.
In light of recent speculation as to the ownership of the Company, the remaining Board members (together, the owners of 45.45% of the issued share capital of the Company) would like to reassure the shareholders, employees and fans of Arsenal Football Club that they remain long-term holders of their interests in the Company.
To this effect, they have entered into an agreement not to dispose of their interests in the Company for at least one year and have confirmed that they intend to retain their interests on the expiration of this period.
...........
Apparently Dein has travelled to America and has met this investor a few times.
My guess is that Dein sees him as a safe pair of hands at the club and backed a sell off with the rest of the board disagreeing and so they have parted ways. From the last line of the the PR it looks like the Arsenal board, by entering into an agreement not to sell any shares for at least a year, have issued a pretty blunt notice that they aren't for sale.
would we be worried if a guy with a comedy syrup tried to buy us or would we welcome the investment. Me, keep the same guys running the show, or else on your bike.
Comments
looks like yet another big club is about to be passed over....
Imagine him (Wenger) ending up at Chelsea or Man Utd! All very interesting if you like that sort of thing, which I do.
A club with great history and traditions run in the right way but since their move to the Emirates the whole package has got a more American feel to it.
Top 4 will all be run by foreigners with ridiculous money to satisfy their latest hobby and the gap will get wider and wider.
Would say that Arsenal fans will regret it in years to come, but i think they've been so swamped in recent years with the new-age Thierry Henry followers that they won't.
There has been a lot of overseas investment but in particular from the US. Perhaps they see the ownership of a sports franchise as fun or a status symbol that they can afford. There may well be benefits in terms of profile or connections to US franchises but it is difficult to make a profit on turnover even with the huge amounts of money coming from SKY and UEFA that would match what you could get from sticking it on the money market or in the Halifax.
Maybe they see it as an investment which they can sell on a profit in a few years or perhaps just want to milk the income and quit. Just can't see how the business model (other than at Man Utd where the club is effectively buying itself) works.
And who's next? Newcastle? Charlton?
As you say, its a strange one from a business model perspective. Perhaps its a combination of having to park funds overseas, the ability to extend the debt on the club thereby not actually outlaying too much, ego, wanting to create a global brand, knowing that tv income at the top level is only likely to increase, i don't know.
Follow the money Henry...
A combination of factors, American sport is saturated in terms of its earning power, Fox has taken over baseball, ESPN pays stupid money to televise sport - whether basketball, baseball, American football, Ice Hockey etc. The owners of these franchises (as they call their teams) have and continue to rake in stupid amounts of money. Where can they expand in America? There are few avenues left open once you've got your stake in a baseball/basketball etc team.
English football has suddenly become attractive with the new three year Sky/Setanta deal, which is for £1.7bn, bear in mind that the team that finishes bottom of the EPL next season will earn £30m in in prize money - more than Man U or Chelsea will get for winning this year's EPL, while next year's winners will earm £50m more than was on offer this year. The overseas rights to EPL games alone were sold for something like a collective £625m - over double the last contract, and again this is just a three year contract. With Champions League football more-or-less guaranteed for the top teams that's another revenue stream (Liverpool made around £20m in the year they won the CL) to add on plus the top teams have started touring Asia in pre-season friendlies, which is sales pitch to sell premium rate subscriptions to their TV channels.
My guess is that Dein wanted to sell to Stan Kroenke, who bought a 9.9% stake in Arsenal that ITV held and that the rest of the board have said no way. Currently Arsenal don't need the money, the Hill-Wood family and one or two other long-term investors own around half the club between them and apparently they have no interest in selling.
This is a subject I have followed closely and written a lot of stuff on for work and its really quite simple: Cheap Money.
Banks are lending money to these private investors and private equity firms at historically low rates so the investor can buy the asset using borrowed money and not really have to risk too much of their own capital. The basic idea is the same as always, trim the fat off the asset and get it as lean as possible and then sell it on to someone else. The banks are happy to lend the money because they generate massive fees from arranging the loans.
The problem comes when the bubble bursts and all the potential investors get scared off, that's when the shit will hit the fan, quite literally in fact.
There is a lot of interest in the bigger EPL clubs from these type of buyers because these clubs produce a LOT of cash and are likely to produce even more cash when the next TV deal gets signed.
The only exception to the above would be Abrahmovich [he was rich enough to pay cash] and maybe Eggbertsson at the Spammers because he also seemed to pay with his own cash and does appear to be a football fan.
There isn't much synergy as a brand between a European sport like football and American sports. I can't see say Arsenal fans rushing out to buy subscriptions to watch the Denver Nuggetts or any of the other teams owned by Kroenke, neither can I see Denver Nuggets fans rushing out to buy Arsenal shirts or feeling any kind of sporting kinship with them. It won't help sell TV rights as these are centrally controlled and negotiated by the EPL, so it won't give either the US or the English arm access to the other's markets. In essence it's about ego and making money and perhaps reflects that maybe US football (ie MLS) isn't really worth investing in just yet.
Phil Anschutz owns most of the MLS set-up and he's slowly selling his stakes in the clubs that he still has a stake in, while extending the league.
I suspect the real problem comes from a difference of opinion between Fizsman and Dein.
......
True, there's a lot of private equity capital washing about at the moment, they don't usually have shareholders as such to answer to, are cash rich themselves and like to invest heavily in cash generating machines and footie clubs are exactly that. With the new Sky/Setanta deal and other revenues you can be reasonably assured what revenue will be generated by the top footie clubs over the next few years and the cost base for football clubs isn't really that great.
i think there is a lot in this argument. buying a franchise in a US sport and chucking loads of money at it does not guarantee success because of how the leagues tend to get their playing staff. This is very far from the case in Football. You chuck loads of money at a club and whilst you can't guarantee winning it certainly makes things a hell of a lot easier.
Interesting piece Ormiston. Would point out that Eggbertson has put in very little at Wast Ham, there is another Icelandic banker who has provided the bulk of the investment.
And the Americans at Millwall are also different as they have clearly bought into an urban regeneration project, not a football club.
I see the point around cheap loans and cash businesses but still think it is high risk and potentially damaging to the "club" in the traditional sense of that word ie the team and fans.
I suspect the real problem comes from a difference of opinion between Fizsman and Dein.[/quote]
According to reports Fiszman has sold a small chunk of his stake to Kroenke.
There are 62,219 shares in existence and Fiszman owns or owned just over 24%, Nina Bracewell-Smith owns around 16% (she inherited this from her grandfather), Kroenke owns nearly 12% and is thought to have a few more shares in the hands of supporters who bought small stakes recently. David Dein owns 14%, Richard Carr 4.4% and Peter Hill-Wood less than 1%.
Arsenal made £16m profit last year (boosted by their run in the CL) and have a worldwide fan base of 27m. With players on long-term deals you have a rough knowledge of what the club will earn in a year and what outgoings will be, of course there is some variable revenue - Arsenal might not make the CL, or get KO'd in the group stages or screw up in the Third Round of the FA Cup etc. Salaries are a high component of the club turnover and an unfeasibly high one at that, but if you bring in new TV revenues and start tapping some of that 27m fan base then the equation looks a lot less shakey. As for the damage to the club...I always think it's cute the way one of the new directors confesses to always having been a long-term fan of the club that's being bought, despite being unable to find the place on a map the week before, and anyway I think football sold its soul a long time ago.
Naturally there's a lot of risk just as there is in any business venture, but I'd think there would be less risk in buying a top performing club with a large and loyal fan base than there would be in say buying Sainsburys. Look at us, we're there through thick and thin, relegation and promotion, do we have the same loyalty to other brands? If your local supermarket stopped offering a good service you'd happily go elsewhere, but we won't stop supporting the club, maybe we'd go less often, this new breed of owners are tapping into a great deal of emotional loyalty, and mercilessly exploiting it.
As above, its a combination of the new TV deal, cheap money, the ability to rake in all the revenues going without having to share them with several other franchises and ego - one billionaire sees another buying a club and so he scouts around for the next club on offer. Never underestimate the power of people behaving in packs. Our football clubs look cheap in comparison to American sports clubs and these guys can't buy their way into clubs in Europe.
If it were a prelude to a European super-league, then you'd see stories of billionaires sniffing around Juventus, AC Milan etc. This appears to be an English phenomena, no doubt partly linguistic but mostly because this is where the real money lies, no other European league has the same global clout as the EPL.
http://football.guardian.co.uk/News_Story/0,,2059461,00.html
The crucial selling point for the buyers here is that the TV rights will just keep going up and up, there is no way that they will be going down.
That means that your essential revenue flow is secure because ticket revenues are now not the bread and butter, TV money is.
The other point here is that a lot of the blue chip private equity firms [Bain Capital, Blackstone, KKR, Newbridge....] are fighting amongst themselves for the really huge private assets in the market like telcos and those kind of multi-billion dollar assets. That means that a lot of the smaller players, like these individual private investors, are forced to look a bit further afield at cheaper assets like football clubs to make their deals.
Peter Hill-Wood, Chairman of the Company, would like to express his gratitude for the many years of loyal service given by David Dein to Arsenal Football Club and regrets that irreconcilable differences between Mr. Dein and the rest of the board have necessitated a parting of the ways.
In light of recent speculation as to the ownership of the Company, the remaining Board members (together, the owners of 45.45% of the issued share capital of the Company) would like to reassure the shareholders, employees and fans of Arsenal Football Club that they remain long-term holders of their interests in the Company.
To this effect, they have entered into an agreement not to dispose of their interests in the Company for at least one year and have confirmed that they intend to retain their interests on the expiration of this period.
...........
Apparently Dein has travelled to America and has met this investor a few times.
My guess is that Dein sees him as a safe pair of hands at the club and backed a sell off with the rest of the board disagreeing and so they have parted ways. From the last line of the the PR it looks like the Arsenal board, by entering into an agreement not to sell any shares for at least a year, have issued a pretty blunt notice that they aren't for sale.