Arsenal edges toward private ownership

News that Lady Nina Bracewell-Smith has decided to appoint US private equity fund Blackstone to find a buyer for her 15.9 percent stake in Arsenal raises questions over the future ownership of the club and could mark the end of the last English football giant in public ownership.

Bracewell-Smith is the fourth largest shareholder and her decision to sell could mark a return to the intrigue that has pitted Russian billionaire Alisher Usmanov against Stan Kroenke, the US sports franchise mogul. As yet she has not attempted to sell piecemeal on PLUS Markets, the specialist trading venue on which Arsenal’s shares are traded. This would have meant breaking up a tactically important stake in a desirable concern.

A buy-out of Arsenal by Kroenke or Usmanov would mark yet another twist in the increasingly international make-up of club ownership and a further stock market de-listing. Listed British clubs are now a rarity. The majority that listed did so in the mid-to-late 1990s following lucrative broadcasting deals with Sky. However these were hit by initial over-valuations and a lack of profitability, due in part to inflated player wages. Moreover the decision by clubs, such as Manchester United, to raise money by floating on exchanges has led to buyers swooping on these saleable commodities. Manchester United de-listed in 2005 following the successful (but highly unpopular) takeover by the Glazer family.

Consequently only a handful remain on the market. Arsenal and Tottenham represent the largest of these and are joined by Millwall and Preston North End in the lower leagues. For listed teams outside the elite Premier League investor relations does not seem to enjoy the same level of prominence displayed in other sectors. Preston North End’s investor information is woeful. I assumed for an hour they had de-listed but an interview I discovered with their chairman seemed to suggest otherwise. Comparatively Millwall actually possesses a site, and it was easy enough to find, but it hardly presents a milestone for attractiveness. Given that the majority of the small shareholders at such clubs are fans (the financial lifeblood and the teams raison d'être), it comes as a surprise that there is not a greater attempt to reach out via user-friendly IR sites to answer investor queries, or at the very least to encourage dialogue between the board and stake-holding supporters.

David Hatt
IR magazine