Meet Mr Usmanov


Alisher Usmanov owns about 24% of Arsenal, which makes him close to being the biggest shareholder – Danny Fiszman has just about the same level of shareholding. Mr Usmanov is what the newspapermen (in that funny sort of shorthand way that they have) a “metals magnate” which presumably means he’s made of iron or something like that. His fortune was once said to be $5.5bn but what with these pesky bankers screwing up its probably now 4p. Well, maybe a bit more.

The shares he owns came primarily from David Dein after he was kicked off the board for holding negotiations about the future of the club without the rest of the board knowing. In company terms this is the equivalent to high treason – as a board member you are answerable to the board and the board of directors alone. Except of course you don’t get hanged.

So at this moment Mr Usmanov is a shareholder – almost the biggest one – but he is not a director. Mr Kronke has a smaller shareholding but is a non-executive director – so Mr Kronke is within the club, attending the high table, and Mr Usmanov has no more rights than the average red member, although I think he has a box which must be nice when we win.

Arsenal’s position as a club is that there is no need for a wealthy individual backer, and they have made various efforts to ensure that they don’t sell to Mr Usmanov – something that is perfectly legal. While no shareholder could legally say, “I don’t want to sell to him because he is a Jew or a Muslim”, it is perfectly legit to say “I am not selling to him because I don’t like him” (although of course I am not saying that anyone has actually or would actually ever say such a thing).

So where does this take us?

It is often said in the papers that if Mr Usmanov got 25% of the shareholding he would have enormous power – but I really don’t think that is true. In my real life beyond hyperspace I am chairman of a plc – not a very big or important plc, but a plc, and as I read our rules nothing much happens at 25% apart from the ability to call an emergency general meeting of shareholders. But having called such a meeting what then? Just because he you 25% it doesn’t mean you can win any votes – so you can’t start demanding dividends based on the profit of the club, you can’t choose the team, you can’t change the colour of the strip, and in fact all you can do is be heard.

Now of course my company might be different from that of Arsenal – in fact I am sure it is, but I would say that in law nothing much happens at 25% ownership and I doubt that Arsenal have anything special in their rule book.

If Mr Usmanov was to get 30% of the shares he would have to launch a formal takeover approach, which would mean he would have to offer to buy everyone’s shares at a certain price. That is a legal requirement.

But then people don’t have to sell him any shares. And by the time he gets to 30% he will have eaten up all the little shares lurking around which are owned by people who either disagree with the board’s stance, or who have no interest in the club. If he did get 50% control he would obviously be able to vote through a lot of stuff, and eventually we move up to a position where he can forcibly buy all the shares at a set price, once he is near the 100% mark. But my point is 50% is a long way from where he is now, and unless one of the big owners sells to him it is difficult to see how he will get there.

Meanwhile, the other long term story about Mr Usmanov is that Schillings, his lawyers with the most unfortunate name (to me it makes them sound like accountants), have over the years been “in touch” as we like to say, with several websites and blogs (like this one, but not including this one) asking them very nicely and politely to take down articles that relate to allegations made against Mr Usmanov by Craig Murray, the former British ambassador to Uzbekistan.

Mr Usmanov was put into prison by the USSR, which can’t have been a pleasant thing. Mr Usmanov says that he was a political prisoner and that when the very nice Mr Gorbachev became president Mr Usmanov was pardoned, they found the key, and let him out.

The last I heard of the former ambassador it was in a news report earlier this year in which he says that “he has contacted Schillings to ensure they know where to send any writ.”

Quite obviously, I have no inside information on Mr Usmanov, I have no knowledge of what happened to him under the USSR, and I have a hard enough time trying to come to terms with how the FA have allowed Theo to be crippled in training, and then just walk away from the situation so he is not even mentioned in their press briefings. So if I can’t make head nor tail of that, I certainly can’t give real insights into anything good or bad about Mr Usmanov.

But I can say that the finances of Arsenal (and finances are more my thing – for although my job within the company has always been that of a writer I do have to chair the board meetings that look at the numbers) look very solid to me. The club receives so much money per game that the match day income alone pays off the mortgage, and leaves a lot left over. In other words even taking the mortgage into account we are much better off than we were at Highbury.

The money from the apartments has never been accounted for as potential income. We’ve paid for the work to be done, so that is gone out of the club. But when the sales money comes in, is pure profit, and will probably be used to reduce the mortgage even more. Unlike every other club Arsenal makes a profit on its transfer dealings most years, and unlike clubs such as the Tiny Fantasists down the road, it owns and has paid for its training ground.

True some of the redevelopment around the Ems is not selling, but the purchases of those old sheds and buildings has been paid for. It will be good when they sell, but we are making more than enough to allow them to sit there until the recession ends (I am told that will be June 30 2010).

Of course if the club suffered a terrible slump in its playing fortunes it might suffer financially, but the club will break even by getting into the group stages of the Champions League once every four years, and selling 50,000 tickets per match. It is obviously doing far better than that and with 40,000 on its waiting list for seasons, I think such a slump is a long way away.

If Mr Usmanov did come into the club big time, it seems certain the Lord Wenger would not want much to do with the money that Mr Usmanov offers, since the Lord Wenger is happier bringing through young players whom he can mould.

Personally I don’t see too much to worry about at this stage. If we have a problem it is years and years away – unlike Manchester Bankrupt, Everton-Bolton, and Liverpool Insolvency who face an immediate crisis and could be either bust or completely destitute within 2 years. Certainly recent league games at the very old Trafford have only managed to sell out because they went on general sale and the club is being challenged in court over its pricing policies.

3 Replies to “Meet Mr Usmanov”

  1. Hiya Tony, how’s it going?

    Good article. Some people are determined to panic about our finances, when we are ironically, in just about the best position of any English club.

    Another point to mention regarding the bid threshold is that by law, Usmanov would be forced to make a bid for all of the shares when he reaches that threshold; that bid does not have to be accepted (as you said) and if it is NOT accepted, Usmanov would then have to SELL enough shares to take him below the bid threshold (again, by law).
    Also, concerning the flats, about six weeks ago, Ken Friar confirmed that only two of the purchasers had pulled out, due to changes in their personal circumstances. That was earlier this year.
    Finally, and not such good news, the stadium receipts cover the INTEREST on the “mortgage”, not the capital repayments. Apologies if you were aware of that, but the way you phrased it above doesn’t make that clear. However, as you say, Emirates is so profitable that the board can easily save up to pay off the principal, in the highly unlikely eventuality that the profit from the developments is significantly less than expected. But I can’t see the flats not selling. If anyone wanted to pull out, the credit crunch would have given them the perfect excuse. So even if the profit from the property dealings comes in over a greater number of years than was envisaged, it should still all come in, I reckon.

  2. I’m not as complacent as you are about this. Read this:

    “In a staggering flurry of trades on Plus markets, Usmanov has acquired 149 shares in 4 weeks raising the price of shares in Arsenal Holdings to £8,125 per share. He now needs around 50 shares before he is able to announce his 25% holding. At the current rate of Gooners selling their shares to Red and White, he will comfortably have this before Christmas.”

    That’s from:

    Usmanov has quietly been buying up lots of small shares over the last two years at premium prices. There are lots of small shareholders very eager to take up his offer for their shares because they can’t turn down his crazy prices. There’s no sign that any of these small shareholders will stop selling to him. At the speed he’s going, he will reach that 25% very soon.

    Yes, he may not have a lot of power then but it still means he owns an awful lot of Arsenal. I think it’s naive to just shrug one’s shoulders and think “25%, so what” he won’t get any more than that. How can you be so certain of the other shareholders?

  3. A captain doesn’t seek to shift responsibility to the other players in his side, as this latest outburst from Gallas has done. He is obviously trying to make other players the scapegoats. I hate John Terry, but his actions last night speak volumes of why he is the Chelsea captain and why Gallas was demoted down the ranks and subsequently sold.

    Last night, in his post match interview, Terry took full responsibility for his mistake, admitted he was wrong and should have done better, and took all the pressure of Scott Carson, which may just spare him a second international exodus. Terry took one on the chin, accepted responsibility, and behaved in general as the captain should.

    Compare this with his old accomplice Gallas. Arsenal’s first 3 conceded goals this season were all from corners and were all scored by men Gallas should have been marking. Was Captain Bill’s response one of responsibility and leadership. No, just like on the pitch, he sought to blame other individuals and in the press afterwards stated how certain members of the team had to defend better. Gallas clearly spends more time speaking to the press than his own team-mates.

    Much has been made of Arsenal’s problems, and I for one, do wholeheartedly believe that the team had no unity, no leader and no heart. The matches against Fulham, Sunderland and Stoke were some of the worst of the Wenger reign. As the two figureheads of the club, the manager and the captain, have to hold their hands up high and say that there is no collective desire in this team. (Even more so Wenger for persevering with Gallas for a second season, his choice of captain directly relating to the lack of brotherhood and teamwork on the pitch).

    Would Tony Adams, Martin Keown, Ray Parlour, Dennis Bergkamp or Patrick Vieira ever have behaved in the way Gallas has done, NO. Whatsmore, with anyone of those players in the team you could be sure that any of our young players wouldn’t dream of, let alone consider, stepping out of line or showing any signs of disrespect. Wenger has taken the best team in the world, a side which was invincible, and replaced them with a group of individual players with no particular allegiance to the club, whose best hopes of silverware is the Carling Cup. All of this to supposedly save money, yet we have the second highest wage bill in the prem?!

    Not only should Gallas be stripped of the captaincy, he should be dropped. Bring in the ‘real’ Captain, Kolo Toure(someone who was around with the all conquering Arsenal legends of 04), partner him with Djourou at the back and see what happens. It surely can’t be as bad as the 9 goals in 4 games conceded by Gallas and Silvestre. (Chelsea and Untied rejects who are apparently still good enough for Arsenal though).

    I hate to be so negative but the club has become a joke, and its choice of Captain is the punch line. They need to re-install some figures at the club that represent Arsenal and can actually galvanise some unity and respect. Why Keown was never made permanent defensive coach after guiding a back four of Eboue, Toure, Senderos and Flamini to the best ever defensive record in the Champions League remains a mystery.

    It’s been said before but Wenger needs to buy a clear, proven, experienced quality centre back and defensive midfielder in January. I don’t have much hope as aside from Campbell and Toure, Wenger has never signed a decent centre back. Can you imagine any of Stephanovs, Tavlaridis, Luzhny, Cygan, Senderos or Song ever playing for ManUre, Chelsea or Liverpool. Not a chance. Its dark days to be an Arsenal fan, and while Gallas is captain and his team of whiners and individuals carry on as they have been, the situation doesn’t look like improving.

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