The Arsenal AGM. What really happened (rather than the press make-believe)

The 13th AGM  of Arsenal Holdings plc was held on 16 October at the Emirates Stadium

This year I am sorry to say we are a little late in giving a full account of the Arsenal AGM to balance the rather whimsical pieces that appeared in some newspapers.

But fortunately we had our man in the hall Andrew Crawshaw, and here’s his commentary

The AGM followed the format of previous meetings with an introduction by Sir Chips Keswick our Chairman (Sir John Chippendale “Chips” Lindley Keswick to be exact) who brought the meeting to order with a loud Oi! when latecomers missed his initial invitation to take their seats.  I like Sir Chips – he has an excellent way of using humour to keep a potentially unruly meeting in order.  He confirmed that formal questions from shareholders had been invited in writing in advance of the meeting and all submitted were to be addressed by various Board Members as appropriate, some questions from the floor might also be taken if time permitted.

He then took the formal Ordinary resolutions

Resolution 1 – The Annual Report and Accounts.

There were three questions submitted relating to the Accounts and these were addressed by the Board before putting the Resolution to a vote.

Q1 & 2 – A sum of £3m has been paid to KSE (a firm owned by the Majority shareholder Mr Kronke) for services rendered, were the services put out to competitive tender and who effectively signed off the account for payment.  Sir Chips said that he and Lord Harris had agreed the figure and that no the matter had not been tendered as the firm were effectively ‘in-house’.  The Board were entirely satisfied with the services rendered for this sum.

Q3 – A sum of £2.165m had been paid for the acquisition of a firm now known as Arsenal Overseas LLC (see Untold’s background on this and other statistical matters here), the firm at the time had a nominal ‘book value ‘of £30k, why the discrepancy in values and had Arsenal paid too much for the company.  Ivan Gazedis reported that the sum paid reflected the true value of the company which does data gathering, as such the real value  exists in its staff, the computer systems and programming which are bespoke and therefore not reflected in the notional book value of the company.  The Board were entirely satisfied that the money spent was proper and represented good value for money and the information gathered was already being used across many aspects of Arsenal’s business.

Following these two questions and answers the 2013/14 Report and Accounts were approved by shareholders.

Resolution 2 – Deloitte were reappointed as Auditors

Resolution 3 – The directors were authorised to determine the auditor remuneration

Resolution 4 – At this point Lord Harris took over chairmanship of the meeting as Sir Chips had to be re-appointed following completion of his term of office.  He was re-elected to the Board and immediately resumed as Chairman.

Resolution 5 – to elect as a Director Josh Kronke – Sir Chips briefly outlined the skills and knowledge base that Josh Kronke (who is a son of Stan Kronke the majority shareholder) brought to the Board through his senior Board experience with the various American sports franchises and the fact that his appointment cements the long term partnership of the majority shareholder intends to have with Arsenal.  On a show of hands the resolution was passed although there were a smattering of hands raised against the proposal.

Those five resolutions concluded the first part of the meeting.

Sir Chips then introduced Stan Kronke who made a fairly brief address.  He said that he was extremely proud to be sharing the platform with the FA Cup, the Ladies FA Cup and the Community Shield and hoped that having cups and shields on display would become usual rather than exceptional.  He then said that this meeting was something entirely outside his experience in all of his American sports ventures and that were such a meeting to happen in the US it would probably take a fortnight as most fans would want to have a go at him.  He again praised Arsène Wenger as one of the main reasons that he had wished to become involved with Arsenal Football Club, rather than any of the other UK opportunities he had declined.  He was glad that Arsène had extended his contract and then invited Arsène to speak.

Arsène spoke for about 15 minutes, seemingly without notes, and summarised last season.  He said that for the most part we were committed and determined and did well to keep 17 clean sheets, however “when we lost we lost!” (I don’t think any of us would argue with his sentiment – when we lost we lost big was what he was saying).  He also said that at the top level if you concede first you have an 85% chance of losing the game as you have to commit more players forward and are vulnerable to a counter attack.  He said that the Club has worked on different aspects to strengthen our game this year and believes that we did well in the transfer market in summer.  He specifically mentioned strengthening the medical staff. A final point I noted was an emphasis on our need for players to be attached to the values of the club (rather than being mercenaries).

The Meeting then moved on to the previously submitted questions which were displayed and addressed by the Chairman or other Board Members as appropriate.

Q4 – Was effectively asking if Mr Kronke would de-list the company if he acquired 75% of the shares.  This was described as a hypothetical question, as with the current Company articles this is not possible.

Q5 – This related to Succession planning for the eventual retirement of Arsène and was referenced the issues that Man United have had.  Sir Chips said that he had no intention of commenting of any other club who had their own answers to the problem – this brought a laugh.  He also said that speculation on this matter was premature with Arsène having just signed a new three year contract.  He was sure that when the time did come, given the standing of Arsenal the board would be spoiled for choice with potential managers.

Q6 – This related to the allocation of Cup semi and final tickets.  Mr Gazedis said that we have 8 times as many shareholders and registered supporters as the ticket allocation and that there had to be a method of coping with the discrepancy.  They were continuing to have discussions with the FA over the size of the allocation and were setting an example by refusing ticket offers for games without Arsenal involvement.  The club will have further discussions with fan groups over the way that tickets were to be allocated at the appropriate time.

Q7 – Support for away fans.  Mr Gazedis said that he tried to get to all away games himself and praised the away support.  He also stated that the Club supported FA initiatives regarding away supporters but there was little else that the Club could do.  He did promise that away supporters would receive a £10 catering voucher for a match over the Christmas period as a token of the Clubs appreciation.

Q8 – Safe standing.  Mr Gazedis stated that this is an issue across the game and requires intervention by both Government and the FA before anything can be implemented.  The Club were broadly supportive of safe standing but would not lead on this issue.

Q9 – This related to the reported cash reserves in the annual accounts and why wasn’t it being spent on squad improvements, there was a supplementary issue relating to ticket pricing.  Mr Gazedis gave a very full answer to this question, he said it was probably the longest answer in AGM history.

Firstly he pointed out that the cash reserves in the Accounts are at an inflated level as they represent the period following the receipt of season tickets bit before the payment of many significant expenses.  A sum of £99m needed to be reserved for future spending, (53m for future transfers, £29m for general debt and liabilities and 17m for performance related costs).  The true figure for the cash balance should therefore be regarded as £109m not the headline £208m.  He said that most of the remaining balance were required to meet salaries etc.  There was money available for future transfers and associated salaries bet that of course the size of that ‘pot’ was commercially sensitive and the Club would never comment on the figure.

Regarding ticket pricing he displayed a graphic showing the Revenue Growth since the Club moved to the Emirates in 2006/7

 

Year	Match Day Income	Broadcasting Income	Commercial Income	Total Income (£m)
2006/7	91	44	42	177
2013/14	100	121	77	298

 

He also displayed a second graphic (sorry I don’t have the full graph) that showed how Arsenal Ticket prices and wages had gone compared with the top four (unspecified) clubs.

• Arsenal ticket price increase since 2006/6 – +11%
• Arsenal Wages since 2006/7 – + 86%
• Top four Wages since 2006/7 – +107%

He also re-iterated the steps that the Club have taken to improve the Ticket Exchange system (I can vouch for those improvements)  and that the Club have initiated a wide range of cheaper ticket options e.g £13 family enclosure tickets, £26 for Cat C games etc.

Q10 – this related to the Arsenal Board being predominantly White, Male and Elderly.  Sir Chips (Male, White and Elderly) gave a personal answer to this stating why he considered himself still suitable for the role.

Q11 – this related to paying the London Living Wage and got a very similar answer to the same question at last year’s meeting.  The Club pay above statutory minimum levels of pay across and will continue to do so.

Q12 – Fanshare.  Tony has covered this in his earlier article and I have nothing further to add.

Q13 – This related to the Club’s position on playing games overseas.  Arsenal weren’t one of the clubs pressing for this to be introduced, and the official position is that it is far too early to have a position yet as nothing has been presented.

Q14 – 442 – Arsene gave a response to the issue of adopting this formation, he said that it was a problem to find the right balance to fully exploit the potential advantages of this system, it was something to explore but we will see it sometime in the season.

Q15 – change in travel arrangements for overseas games – now no longer under the Club’s  immediate control.  This was to be looked at by My Gazidis and a direct response to the questioner would be forthcoming.

Those were all of the questions I noted and the meeting broke up.  There were opportunities to speak with Mr Gazidis, and have a photograph with the cups/shiels or with Mr Wenger.  Unfortunately Mr Gazidis was called away with me the next but one to speak to him so I didn’t have the chance to raise the ‘Elephant in the room’ question of referees with him directly.

One final note, I was interviewed by Sky Sport outside the ground, they asked me if I was happy with the answers given in the meeting which I was and then tried to press me if I was happy about the cash reserves not being spent on players.  As I gave a reasoned answer why I was happy and that 95% of the transfer stories were made up by the media I don’t suppose they will broadcast anything I said and as I don’t have Sky TV I have no way of telling.  I was wearing by black cowboy hat so if any reader saw anything of the interview then I would like to see how they have edited it to make what I said into something contentious.

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