Arsenal owner Stan Kroenke is looking to the Glazer family’s business blueprint at Manchester United for inspiration as he tries to boost the London club’s commercial success.
The American isn’t planning on loading Arsenal with lots of new debt the way the Glazers did with United — leading to widespread fan protests — but said he is impressed with how they have turned the club into the Premier League’s most successful team on the pitch and biggest moneymakers off it.
Since Arsenal last won the Premier League in 2004, United has seized the title four times while also outpacing the Gunners when it comes to creating revenue.
“They won and they have increased revenues by a huge amount,” Kroenke told a small group of reporters on Monday. “If I was a fan of that club I would sit there and go, ‘Wow,’ because how could you do it any better?”
While commercial revenue at Arsenal last season was just £33 million ($53 million), United brought in a record £103.4 million ($165 million). That helped United meet payments on the debt resulting from the Glazers’ 2005 takeover that stands at around £460 million ($735 million).
Kroenke insisted he did not borrow money against Arsenal to buy the shares that gave him control of the team in May, and the club’s debt was reduced in the fiscal year ending May 31 to £97.8 million ($157 million).
But the Denver-based sports tycoon was full of support for the way the Glazers, who also own the NFL’s Tampa Bay Buccaneers, have handled United’s finances.
“They still won,” Kroenke said. “We have a whole different philosophy, I think, in the States. But I think it’s time for everybody to think ... about who invests in these clubs.
“What do you want for the long-term? Because in the States, you would never get this dialogue. (The Glazers) took money out of the club. So what? (Los Angeles Lakers owner) Jerry Buss takes money out of the club. A lot of owners in the US do. No one ever says anything about it. What it’s about is fairness — did the Lakers win anything? Well, yeah, they did. How big is their revenue? Pretty darn good.”
And how does Kroenke hope to make money out of Arsenal after selecting the club ahead of several others in England?
“That’s the risk — there’s no guarantee I’ll make any money,” Kroenke said.
Kroenke was speaking in London to journalists for the first time since taking control of Arsenal in a deal that valued the club at $1.2 billion.
But since first investing in the 125-year-old club four years ago, Kroenke is yet to taste any success.
“You are not going to win trophies every year — I am smart enough to know that,” he said. “I have friends who are owners in the leagues in the US who have never won a trophy and they have been in it for 30 or 40 years. We have been fortunate to win a few.”
Competing for the Premier League title is even harder for a club that rigidly sticks to a self-sustaining model that relies on developing young players rather than spending huge amounts on buying established stars. In contrast, the league standings are currently topped by a Manchester City side that has assembled the most expensive squad in football thanks to the investment of more than $1 billion of Sheikh Mansour’s Abu Dhabi wealth in three years.
“We have had (those owners) in the States where they will spend a lot and they will do it for a little while and they might have some success but maybe ... the person everyone is relying on gets tired of it or has a financial reversal,” he said.
So don’t expect any big spending sprees at the Emirates Stadium.
“Anybody who is a sportsman would rather compete on the basis of intellect rather than ... being able to throw money against the wall,” Kroenke said. “Anyone can go and buy a player, but it takes a lot more to identify that player, develop that player and position him.”
“Could we compete (with Manchester City’s spending)? Yeah,” he added. “Do you want to? Maybe you don’t ... you can overspend for the wrong assets and you end up shorter in the long run.”
Arsenal does have plenty of money to spend after selling a handful of their top players in recent years — including Cesc Fabregas and Samir Nasri this offseason — but manager Arsene Wenger is notoriously frugal.
“It’s not because anybody sitting here ever said, ‘Don’t spend it,’” Kroenke said. “I don’t think you can blame me now because I think it’s a philosophy. I think this club is run a certain way and I think people are proud of the way it’s run ... does that mean there are people who wouldn’t like to see you spend more? I think there is a natural tension there.
“I think maybe they would want you just to make the biggest offer out there. A club could go into a bunch of debt again, spending debt. There was various proposals, we should do different things. I didn’t think we should do them and it’s turned out fairly well. The club has no debt now, because the cash resources exceed the amount of debt that’s on the team.”
The 64-year-old Kroenke also owns the St. Louis Rams of the NFL, the Denver Nuggets of the NBA, the Colorado Avalanche of the NHL, and the Colorado Rapids of Major League Soccer.
While a strong proponent of the financial restrictions imposed by US sports leagues, such as salary caps, he is astute not to demand changes here.
“It’s a tremendously successful league,” he said. “It’s a little presumptuous of me to start dictating rules.”
Kroenke is feeling more relaxed inside Arsenal’s training ground now that the team has recovered from its worst start to a season in almost 60 years.
A humiliating 8-2 loss at Manchester United led to some calls from fans for manager Arsene Wenger to go after 15 years — but those are silent again after a 5-3 win on Saturday at fierce London rival Chelsea.
“Arsene Wenger is an unbelievable manager,” Kroenke said. “He is as good as there is. Now, do you lose some games? Do you have tough losses? It happens. You can’t judge a manager on one game or on one stretch of games. You judge him over time.”
Arsenal’s miserable start came after struggling to find replacements for the departed Fabregas — who returned to his boyhood club Barcelona — and Nasri, who was sold to Manchester City after refusing to sign a contract extension.
“The other player (Nasri) departed for money,” Kroenke said. “That’s where being smart and not being smart comes in. You’ve got one year left on a player’s contract. You’ve got a large sum of money being offered. Can you employ those resources better than you could had you not taken the money, taken a chance on losing the guy for nothing in a year or perhaps overpaying for him now and having less resources later?”
After saying little at the club’s general meeting last week, Kroenke was at Stamford Bridge for the morale-boosting win over Chelsea, which has been bankrolled by Russian oligarch Roman Abramovich.
Kroenke couldn’t have chosen a better first game to attend since his takeover. And he thanked the players at the training ground before meeting reporters.
“They have faced adversity but I think they have shown a real class and spirit in fighting through it,” Kroenke said. “It was a lot of fun to watch that game Saturday. Great game, great win.”
And he hopes to be around for many more to come.
“We don’t get involved just to be here, be gone tomorrow, flip and make a profit,” he said. “We like to get involved in things that we like to get involved in and think we can help develop over time.”