American businessman Stan Kroenke has accepted an invitation to join the Arsenal board on the day the club revealed a pre-tax profit of £36.7m (€46.3m) for the year ending May 2008.
The billionaire owner of Kroenke Sports Enterprises holds 12.4% of shares in Arsenal Holdings PLC, and his prospective appointment to the board was widely interpreted as an attempt to stave off a potential takeover from Uzbek oligarch Alisher Usmanov.
It comes as the Gunners continue to reap the rewards of their move to the Emirates Stadium with the club having announced that gate and match day revenue totalled £94.6m (€119m), which represents some 45% of their overall football revenues.
The club moved to the 60,000-capacity stadium from Highbury in July 2006, and Arsenal chairman Peter Hill-Wood claimed in a statement that it has put the club in a strong position to help manager Arsene Wenger develop the playing side.
He said: “This club is ambitious for success and I believe that the strong financial position which the group has established, as confirmed by the results for the year, provides the best possible platform from which to deliver that success for the long term.
“We are committed to operating the club as a business which is financially self-sustaining and over the last two seasons Emirates Stadium has taken our football revenues to a new level.
“There is no doubt that Emirates Stadium has also become a serious contender for the staging of major non-football events.
“But we cannot be complacent. Accordingly, we recognise the need to further develop the business commercially on a worldwide basis.”
He continued: “We remain firmly committed to sustained investment in the development of the playing squad in a market place where the income from the new Premier League TV contracts has inevitably created a significant upward pressure on both transfer prices and players’ wage expectations.
“During the year we have improved and extended the contract terms of a large number of first team players and, of course, of Arsene Wenger himself.
“As a result, for the first time, the Group’s wage bill has exceeded nine figures at £101.3m (€127m).”
The club confirmed that their overall debt position rose to an overall £318.1m (€401m) but they had expected it to increase because of the use of bank debt to fund the construction of apartments at Highbury Square.
A significant level of property sales are anticipated for 2008-09 with a large number of Highbury Square apartments scheduled to be completed and released for sale which would reduce the debt.
Legally completed sales from the first phase of 65 apartments released at the end of July have so far generated sales proceeds of £18.7m (€23.6m).
Hill-Wood also claimed Kroenke was fully behind their business model after he joined the board – a thinly-veiled attack on the owner-funded approach that would come with an Usmanov takeover.
“Mr Kroenke fully supports the approach the board has taken in setting the direction of the club,” he continued in the statement.
“The board believes Mr Kroenke’s experience in sports team commercial management, sports marketing, media and new media rights as well as real estate development will be of great value.”
The sports franchise mogul’s appointment shows the thawing of relations between Kroenke and the board after his initial investment in April 2007 was met with horror by Hill-Wood, who claimed “his sort” was not welcome.
Kroenke has agreed not to increase his stake beyond 29.9% of Arsenal’s share capital in the next year unless a takeover bid is launched by Usmanov or another party, in which case he could do so with the consent of the board.
“It is a real honour to be invited to join the board of Arsenal given their pre-eminent reputation and position in football worldwide,” said Denver-based Kroenke, who through KSE has owned the St Louis Rams, Denver Nuggets and Colorado Rapids in his homeland.
“I hope my background in sports management will be an asset to Arsenal in their commercial dealings going forward.”
Hill-Wood added: “We are delighted to welcome Stan to the board of Arsenal.
“He brings with him a wealth of experience through his direct involvement in sports clubs in the US and we expect to benefit from his commercial insights and knowledge.”