Irina viner
Kroenke vs Usmanov – the Arsenal power struggle that led to a decade of drift
It is five years since Stan Kroenke’s Kroenke Sports & Entertainment bought Alisher Usmanov out of Arsenal.
In August , Usmanov and his business partner, Farhad Moshiri, accepted KSE’s offer of £million ($m) for their per cent stake in the club.
That took the Kroenkes beyond the critical 90 per cent threshold and triggered a compulsory purchase of any remaining small shareholders, most of them Arsenal supporters.
It brought to an end a long-fought battle as two billionaires sought control of Arsenal’s future. KSE released a statement claiming that “moving to that model will bring the benefits of a single owner better able to move quickly in furtherance of the club’s strategy and ambitions”.
Five years on, that appears to have been borne out.
Arsenal are now a healthier, more unified club. Moshiri resurfaced as the majority shareholder at Everton, with Usmanov’s holding company USM injecting funds into the club via a series of sponsorships. The government sanctions imposed in on the Uzbek-Russian billionaire have brought disastrous consequences for Everton.
But there was a time when some Arsenal fans saw Usmanov as the preferable owner — a declared Arsenal fan and benefactor who made declamatory statements about his intent to restore the club to greatness.
The stand-off between Kroenke and Usmanov lasted more than a decade — a period that, even with three FA Cup wins and consistent qualification for the Champions League, is often characterised in terms of inertia, underachievement or even regression.
Despite the deadlock over the ownership, it was manager Arsene Wenger who found himself most frequently in the firing line.
“I’m happy I led the club through a period where the money wasn’t there and that (the club) is now in a shape where they can spend the money,” Wenger said during an appearance for beIN Sports in October.
“As long as you had two shareholders, there was a little bit of conflict about investing money.
If Stan Kroenke had invested a lot of money with Usmanov being at the club, if he wanted to buy the 30 per cent shares back, they would have been much more expensive.
“He decided to invest money once he owned per cent of the shares.”
It was a fairly innocuous comment from Wenger, but also arguably the most succinct explanation of this difficult period in Arsenal’s history.
So how did this curious ownership situation come about?
And does Wenger’s hypothesis bear scrutiny?
The story begins with David Dein, the former vice-chairman and principal mover and shaker in Arsenal’s marble corridors.
Arsenal were in the process of moving to the Emirates Stadium and, consequently, were operating under increasingly stringent financial conditions.
With Roman Abramovich having arrived at Chelsea, Dein concluded Arsenal would soon need outside investment of their own to compete.
Unbeknown to the rest of the Arsenal board, he began meeting with potential investors. One of those was Kroenke — they met at Highbury House and toured the Emirates Stadium site. In April , Kroenke bought a per cent stake in Arsenal from Granada Ventures, a subsidiary of ITV plc.
A trait Usmanov and Kroenke share is that, at one stage, they were both personae non gratae at Arsenal.
After Kroenke’s initial investment, chairman Peter Hill-Wood stated emphatically that Arsenal “don’t need Kroenke’s money and we don’t want his sort”.
Dein paid for his flirtation with Kroenke with his place on the Arsenal board. He was frogmarched out of his office by Hill-Wood, director Chips Keswick and a representative from Slaughter & May, Arsenal’s lawyers.
The board felt Dein was trying to undermine them behind their back; Dein argued he was simply acting in the best interests of the club.
Dein had owned a lump of shares since joining the board in Although it pained him to part with them, he did not want a lot of his wealth tied up in the club when he was unable to have any input. By his own admission, he was not a good backseat driver.
There were a few leads regarding potential investors, including Bernie Ecclestone of Formula One and Khaldoon Al Mubarak, who went on to become chairman of Manchester City.
Arsenal kroenke alisher usmanov biography ABC News. After first failing to be accepted, one year later he made the cut and was accepted to the Moscow State Institute of International Relations , from which he graduated in with a degree in international law. Greek official Emmanuel Katsiadakis served as interim president since then. In MegaFon expanded their commercial agreement with Everton to become the main sponsor of the women's team.Word then came about a businessman and Arsenal supporter from Uzbekistan.
That summer, Usmanov invited Dein to meet him on his mega yacht, Dilbar, in Sardinia. “The first thing he did was reel off the double-winning team,” Dein recalled. It certainly made an impression, which contrasted with Kroenke being an absentee shareholder who invested without any historic connections to Arsenal.
In a bizarre twist, it so happened that Kroenke was also on a mega yacht in the vicinity.
So Dein, with his old friend and adviser Sir Ronald Cohen, began boat hopping in Sardinia to engage with the two billionaires who had the most direct interest in purchasing his Arsenal shareholding.
Little did any of them realise at the time how profoundly those meetings, and the eventual outcome, would impact Arsenal for the best part of a decade, leaving the club in a strange and destructive paralysis.
With two opposing hands on the reins, the brakes were always on. Arsenal could not properly move forward.
“One minute, Ronnie and I were on Kroenke’s boat; the next minute, we were on Usmanov’s,” Dein recalled in his memoir, Calling The Shots. “Most disappointingly, Kroenke lowballed me, thinking he was the only game in town. I had a figure in mind of what the shares were worth, but he came nowhere near.
‘This is my price’, he said, ‘and if you think you can do better, then you must do what is good for you’.
“Alisher’s approach was almost the opposite. ‘What is it going to take?’.
he asked. ‘I want to buy the whole club’.
“Here I was, juggling with two billionaires with two totally different personalities, who both wanted to own the club. Kroenke was a very sophisticated player looking for value. He already had many other interests with sporting franchises in the U.S. Alisher, on the other hand, was a true Arsenal fan and just wanted to own the club immediately, at any financial price.”
It seems ludicrous now, but there was briefly some newspaper speculation that Usmanov and Kroenke might team up to buy out the existing board.
Such a collaboration was never seriously entertained.
Dein was hoping that whoever he sold to would help him to be reinstated on the board. That was one of the conditions of sale — if they get to control it, he gets to run it. Kroenke was hesitant, by now aware that close ties to Dein would not ingratiate him to the rest of Arsenal’s major shareholders.
Usmanov, however, had no such concerns and asked Dein to set up an investment vehicle to build up his shareholding.
And so, Red & White Holdings was born.
They started with Dein’s 15 per cent of shares, sold to Usmanov and his partner Farhad Moshiri. Moshiri was a British-Iranian commodity trader whom Usmanov had bonded with over reading the Financial Times.
Moshiri would translate to a fascinated Usmanov, providing him with a crash course in Western business practices.
Moshiri was a Manchester United fan and he and Usmanov used to joke they’d buy whichever of United or Arsenal became available first. Dein was appointed as chairman of Red & White, with the intention that he would take up that role at Arsenal should Usmanov complete a takeover.
That, however, proved easier said than done.
Arsenal’s shareholders were initially unwilling to consider yielding control to either Usmanov or Kroenke. Nevertheless, both men continued undeterred, buying up small shareholdings wherever they could.
To begin with, it was Usmanov who led the race.
Arsenal kroenke alisher usmanov biography images Ru Group Usmanov made notable investments in other international technology companies, including Groupon , Zynga , Airbnb , ZocDoc , Alibaba and buy. Facebook X Twitter. Retrieved 22 June Retrieved 21 MarchBy February , Red & White owned a quarter of Arsenal Football Club. Kroenke trailed behind but, crucially, had begun to build a relationship with the board. Later that year, the American was invited to join them as a non-executive director — an honour that was never bestowed on Usmanov. Significant shareholders began to sell off small stakes to Kroenke, who gradually assimilated with the old guard.
The balance of power truly swung in April when Kroenke acquired the stakes of both Danny Fiszman and Lady Nina Bracewell-Smith, taking him to approximately 63 per cent.
Is alisher usmanov jewish Retirement [ edit ]. Archived from the original on 8 November Fox News. Archived from the original on 3 MarchTo close those deals, Kroenke worked closely with lawyer Tim Lewis, whom he has since appointed as the club’s vice-chair.
“Mr Kroenke, although relatively new to Arsenal, has shown himself to be a man who values and respects the history and traditions of this very special club that we cherish,” said a furiously backpedalling Hill-Wood.
“We are confident that he will be a safe custodian of its future.”
That might have been the end of it. Kroenke was obliged to make an offer for the remainder of the shares and the valuation offered Usmanov a minor profit. But, to the considerable surprise of several board members, the ostracised billionaire declined to sell.
Usmanov insisted he was committed to Arsenal — for better or for worse.
While Arsenal’s shareholders were vehemently opposed to Usmanov’s investment in the club, in the early days, there was some dialogue with Red & White.
After all, it was, at one time, the club’s largest shareholder, just surpassing Fiszman.
Directors and executives held cordial meetings with Red & White, which usually appeared in the guise of Moshiri.
While the finer details of club business were not discussed, it was kept abreast of broad strategic matters. Moshiri did not carry the stigma that Dein and Usmanov did at Arsenal and was even said to be close to several first-team players.
As it became clearer that Kroenke was the board’s anointed successor, however, Usmanov became increasingly sidelined.
Despite his significant shareholding, he was not invited to an away game, not taken to the dressing room, and certainly not invited to the board.
“Alisher was frozen out,” Dein says. “It was astonishing how badly they treated him.”
There was an open invitation to the directors’ box but, perhaps understandably, Usmanov did not feel welcome. The only occasions he took it up were for visits of Chelsea when Abramovich was in attendance. The two billionaires have known each other since and Usmanov described the former Chelsea owner as a “very good friend”.
Usmanov’s connections in Russia were relevant in January when Arsenal signed Andrey Arshavin from Zenit Saint Petersburg.
Usmanov had spent time heading the investment arm of Gazprom, the Russian energy giant that owns Zenit. As Arsenal sought to strike a deal, Usmanov worked independently to smooth the arrival of Russia’s star player. That perhaps provides an insight into the kind of owner Usmanov might have been: one interested in being directly involved in player acquisition.
Most who encountered Usmanov accept that he was indeed an Arsenal fan, albeit an unconventional one.
He had two interconnected suites adjacent to the Diamond Club at the Emirates Stadium and was a regular at home games.
Despite the impasse between Kroenke and Usmanov, there was no great personal enmity between them. There couldn’t be — they had no relationship. Kroenke was never heard to badmouth Usmanov in boardroom circles.
Theirs was, however, a culture clash. Usmanov’s bombastic public pronouncements were certainly alien to how ‘Silent Stan’ preferred to conduct his business.
Usmanov certainly became an irritant to KSE. When Kroenke purchased 5, shares from Fiszman in , a complaint was lodged with the takeover panel. The presumption was that this came from Red & White, although it never publicly confirmed it.
In , Usmanov underwrote and proposed a rights issue to inject cash into the club.
Wenger was among those who opposed it. Buoyed by a promising group of young players, he felt the club did not need the money and the board were all too happy to agree.
Over the years, there were several somewhat populist, often curiously poetic statements from Usmanov on the state of Arsenal. “Arsenal is a dream that sometimes becomes a mirage, and sometimes a pain, as with every dream,” he said in “The potential of the team is there, but there is no critical evaluation of mistakes and they need to acknowledge them.”
With Usmanov taking public potshots at the club’s direction, many at Arsenal were keen for Kroenke to step forward more.
Oratory, however, is not his forte. Invariably, his infrequent public appearances did as much harm as good.
In a last-ditch attempt to wrest control of the club, Usmanov launched a billion-pound bid to buy Kroenke’s 67 per cent share of Arsenal in May With Chelsea and then Manchester City benefiting from lucrative takeovers, there was a groundswell of support for Red & White — especially as it came packaged with Dein.
There was a feeling among fans that Wenger was never quite the same without his closest ally.
But KSE was not for moving.
The Kroenkes felt their message was clear and consistent: they were long-term investors and their stake was not for sale. They felt it would have been to the club’s benefit for Usmanov to sell up and move on and were somewhat exasperated by his intransigence.
“Nobody can ban me from being an Arsenal fan and take away my right as the second biggest investor in the great English club, of which I’m proud,” Usmanov said. Arsenal were beset by two stubborn billionaires, each waiting for the other to blink.
“There are scenarios where it is not fundamentally unhealthy to have two major shareholders who don’t collaborate,” says a football finance expert who has asked to remain anonymous due to professional conflicts.
“If a business is self-funding, then it really doesn’t matter. Things can be just fine.
“But at their core, football clubs require constant injections of cash from their owners — the myth of self-financing is just that. If the guy next to you is pumping money in and you don’t do the same, you’re going to fall behind.
Arsenal kroenke alisher usmanov biography wikipedia Daniel Dale picked apart the president's unscripted speech on Inauguration Day. Eric Trump's wife had the internet ablaze after her Jan. Sunday Times. Boat International.And that’s exactly what happened to Arsenal during the era of KSE having less than per cent ownership.”
Overall, Arsenal suffered during this stalemate.
“It was a very difficult period for Arsenal, with a stand-off for ownership between the two biggest shareholders, and it did the club no favours,” says Dein.
“Two factions were vying for control and no business can be ambitious and unified in such circumstances.”
To characterise the period between and purely as one of limited spending and progress is an oversimplification.
To finance the building of the Emirates Stadium, the club tied themselves into several long-term sponsorship agreements, the value of which diminished as the competitive landscape shifted.
When the club were liberated from those and able to seek new deals, their financial capabilities increased.
In , Arsenal broke their transfer record to sign Mesut Ozil. They added Alexis Sanchez 12 months later. That period brought a flurry of FA Cups and continued the club’s impressive record of Champions League qualification — something fans would soon learn they could not take for granted.
As much as Arsenal’s self-sustaining model made it difficult to compete with Chelsea, it was a point of pride for many working at the club.
They saw it as a badge of honour.
None more so than Wenger. As he saw clubs committing what he believed to be “financial doping”, he became increasingly entrenched in his idealism. When money was made available, he would often decline to spend it. In the summer of , Arsenal could follow up Ozil and Sanchez with another marquee signing.
In the end, the summer transfer window ended without Arsenal signing a single senior outfield player.
Wenger sought a purer way to win. That was his dream and, for a long time, the Kroenkes were prepared to indulge it.
When the Kroenkes took full control in , there was a distinctively different approach.
The football arm of the business took on a new structure, with a more committee-led approach to recruitment. As a statement of intent, Arsenal smashed their transfer record to sign Nicolas Pepe for £72million.
The pace of change was almost too much. In the space of a few months, Arsenal took on a different ownership model, a new executive structure, and a new head coach in Unai Emery.
This revolution was initially clunky, not cogent.
It was only once Arsenal emerged from the Covid pandemic that the new era took shape. The departure of the head of football, Raul Sanllehi, consolidated the power of sporting director Edu and the new manager, Mikel Arteta.
Lewis was added to the board and within one week, Arsenal announced they would be restructuring their remaining stadium debt of £million by way of a substantial loan from KSE.
This freed Arsenal up from their need to keep back £36million in a bondholders’ debt service reserve and dramatically improved cash flow at the club.
The refinancing had been discussed among the board many times over the years, but Kroenke had always been clear: he would only proceed once he owned the club outright.
This was arguably the most significant outcome of KSE taking sole ownership, as it significantly loosened the financial restrictions under which the club had been operating.
The subsequent spending and revival of Arsenal have been underwritten by KSE. Arsenal still aspire to be a self-sustaining club but have recognised that, for that to be realistic, they need to qualify regularly for the Champions League.
That has necessitated significant expenditure, which Arsenal’s financial results state “would not have been possible without the support and commitment of the club’s ownership, Kroenke Sports & Entertainment”. This has admittedly come in the form of favourable loans rather than a straight equity injection.
In that respect, Wenger’s assertion has been proved correct: having gained full ownership, KSE has financially supported the club.
But was that a sound strategy?
“The answer to that question depends on whose perspective you are taking,” says The Athletic’s financial expert.
“From the perspective of the Kroenkes, who wanted per cent control and Alisher Usmanov gone, it made all the sense in the world, and in fact, it achieved their goals.
“They forced Usmanov to sell to them by giving him the silent treatment for a decade — their gambit paid off. And they didn’t permanently damage the asset because Arsenal are back at the top of the table after only a few years of investment.
“If your perspective is a fan’s perspective, somebody invested in seeing the club win, then it was not sound.
The club underperformed for more than a decade.”
That is the crux of it. The stand-off between Kroenke and Usmanov, that decade of drift, was understandable from a business standpoint. But in terms of custodianship, it was undeniably problematic and fostered the frustrations among fan groups that KSE is still battling to overcome.
Alisher usmanov: Usmanov's accountant and partner in USM holdings is Farhad Moshiri , [ 92 ] the current majority shareholder of Everton, and former co-owner of Usmanov's Arsenal shares, Red and White holdings. On 7 February , the appeal was dismissed. Click for Sound. Archived from the original on 8 December
The Kroenkes may not have had outright ownership, but they did have control. More could have been done to improve Arsenal’s position had the club’s interests truly been at the forefront of their minds.
“I love Arsenal, but I failed,” says Usmanov. “What can I do? But I also believe Arsenal lost something without Usmanov.”
Attitudes towards the Kroenkes are softening now.
Investment — and improving results on the pitch — will do that. Arsenal appear to have turned a corner and the era of single ownership has certainly begun. It seems that, as the Kroenkes made plain to Usmanov time and time again, KSE is here to stay.
(Top photos: Harry How/Getty Images; Mike Egerton – EMPICS; by Eamonn Dalton)