by Tony Attwood
So Mr Kroenke has made an offer to buy the shares of Mr Usmanov in Arsenal, and it seems Mr Usmanov is willing to deal. Mr Kroenke will then own just over 97% of the shares. At this point, under English law all the other shareholders must be offered the same deal. They don’t have to accept but in not accepting they don’t have any power and if he really wants to, Mr Kroenke can lawfully apply to buy the shares everyone else owns, at the same price as Mr Usmanov is being paid.
As a privately owned company registered in Delaware (whose main source of income appears to be registering companies) Mr Kroenke will have total power.
Delaware is special in this regard. Over 50% of US businesses including 60% of the top 500 companies in the US are registered in Delaware even though the state has under 0.3% of the population of the United States.
What this means is that in any dispute about the business the case is heard by a judge not a jury, and second there is no corporation (ie company) tax. Delaware doesn’t tax profits on royalties, trademarks or copyrights. There might even be reason to hold one’s image rights (that old footballers’ extra revenue source) in Delaware.
Delaware businesses also have very little liability, and maximum privacy. So money could (I only say could, not would) be moved out of Arsenal as profit, to Mr Kroenke should he ever wish, with a minimum of fuss.
So who is to blame for Arsenal becoming a business owned at the whim of a very rich man?
Well, fairly obviously the major shareholders who sold their shares to Mr Kroenke in the first place. As that dear old duffer Mr Hill-Wood famously said, “We don’t want his sort here.” Sadly the shareholders decided they did. You can’t really blame Mr Kroenke for taking advantage of people who wanted to sell. He didn’t force them to bring him in.
Which raises the other question: what happened the last time Arsenal was owned by one man?
This was over 100 years ago – right back in 1910. The club was completely bust and about to go under. Henry Norris (he wasn’t a knight of the realm then, nor a Lt Col in the army) offered to take the club over and with no one else willing to do this, he took it and all its debts.
Among other things Mr Norris paid off all those debts in full (including at least one major debt to the architect involved in work on the Manor Ground, which bizarrely was not showing in the books) and promised to keep the club in Plumstead for at least a year, and offer shares in the club to the public at £1 each.
The share offer failed because although local people made a big fuss about keeping their club in Plumstead they didn’t support it enough to buy the shares. Mr Norris however was more than true to his word – he had promised to keep the club in Plumstead for one year, but kept it there for three, and kept offering people the chance to buy shares.
Mr Norris then bankrolled the Highbury development, guaranteeing the lease on the land, guaranteeing the bank overdraft and once the club had moved, constantly offering his shares in Arsenal for sale to supporters. In 1925 he went further and bought the land on which Highbury was built outright. Again he paid.
His gamble was that by moving Arsenal to near Tottenham and Clapton Orient he would generate a huge interest in football in that part of London which housed large numbers of city clerks and tradesmen living in rented property. This proved to be true, for in the first season Arsenal were at Highbury not only did their crowds go up massively, so did the crowds of Tottenham and Clapton Orient.
Tottenham objected vigorously to the move, and I have never seen them apologise for their objections, even once it became clear they were benefiting greatly. Mind you, even when Arsenal supported Tottenham’s attempt to get into the Football League after Tottenham had left the Southern League, I am not sure Tottenham were openly grateful. (Arsenal also allowed Tottenham to play at Highbury in the war when WHL was taken over for the testing of Enfield rifles.
During the war Henry Norris formed and paid for the first Footballers’ Battalion which joined into the Middlesex Regiment – he was knighted for this work in 1917. In all he evolved three battalions and many others copied his idea.
Meanwhile as Mayor of Fulham he was one of the few people in the country who was able to run the registration and recruitment processes required of councils by law. His abilities were noted and after he was refused as a volunteer in the army (because of his eyesight, his age and the fact that they realised he would be of more use elsewhere), he was recruited by the War Office and sent to clear up the recruitment mess on the south coast. Having no rank he was made a Lieutenant – the lowest rank of officer.
By the time the war ended this man who had left school at 14 and had no formal military background had not only been knighted, but was also a Lt Colonel who was put in charge of the entire decommissioning process as the troops returned to civilian life. And this despite his radical views: he wanted equal pay for women (in 1918!), no maximum wage for footballers, subsidized rail fares for workers, and lifetime pensions for all servicemen injured in the war and unable to work.
Back with the football comes the story you probably know about him – Arsenal’s election to the First Division upon its expansion in 1919. The story is that Sir Henry rigged the election. However before the election the leading sports press talked up the idea of the election of Arsenal, recognising their role in taking the League into the south when others (like Tottenham) opted to join the Southern League.
The minutes of the AGM of the League has no record of Sir Henry making a speech, the local and national press on the day after contain no suggestion of any speech by Sir Henry or anything amiss. Indeed the story of Sir Henry fixing the election only turned up over 20 years later.
What screwed up Sir Henry’s reputation in fact was the manager he employed from 1919 to 1925 – Leslie Knighton, who 20 years after he left Arsenal, and after Sir Henry’s death, wrote a self-serving autobiography which sought to excuse Arsenal’s failure under his tenure and blame it all on Sir Henry.
You can read more about the man without whom there would be no Arsenal, and who wanted Arsenal to be owned by the fans, in the Arsenal History Society series Henry Norris at the Arsenal. It is by far the most comprehensive and detailed review of the man’s work at Arsenal that has ever been published. Really, you shouldn’t judge the rumours and stories you have heard until you have looked at this.
After Sir Henry left the club, it continued to flourish under the dynasty he established (Chapman, Shaw, Allison and Whittaker, the four managers who between them delivered seven Division 1 titles and three FA Cups) continued to flourish, but slowly ownership began to drift into the hands of individuals. From Sir Henry’s grand idea of a club owned by everyone, it started to become a club owned by smaller numbers, until we have reached the situation whereby quite soon one man will own it.
This in itself is a sad day, but so is the fact that people still endlessly write of Sir Henry as the villain of the piece, rather than the man without whom there would be no Arsenal, and who had the glorious vision of everyone owning a part of their local club.
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