Arsenal's second largest shareholder wants explanation of £3m payment to Stan Kroenke company
Published 14/10/2015 | 08:48
Alisher Usmanov, Arsenal’s second largest shareholder, has written to the club ahead of Thursday’s annual general meeting to seek a detailed explanation of a £3 million payment to the company of majority owner Stan Kroenke.
The payment has been made for a second consecutive year to Kroenke Sports and Entertainment and Usmanov, who owns 30 per cent of Arsenal with business partner Farhad Moshiri, wants further transparency about the rationale for the fee.
Arsenal chairman Sir Chips Keswick explained the payment last year with reference to “the wide range of services” provided by KSE, which is the company that owns Kroenke’s basketball, ice hockey, Major League Soccer and lacrosse teams, as well as a range of related sports venues, media and ticketing operations in the United States.
Usmanov, though, has become sufficiently concerned by the prospect of an annual payment to take the unusual step of writing directly. It is understood that Kroenke and Usmanov, who both feature on the Forbes list of the world’s richest billionaires, have still never spoken in the eight years since they began buying shares and vying for control of the club.
The Telegraph has also seen a selection of the questions that will be addressed to directors at Thursday’s AGM by shareholders who are also members of the Arsenal Supporters' Trust.
They contain some about the £3 million fee, with Kroenke to be asked to explain the payment “so that all shareholders and supporters can see that value for money is being obtained”.
The payment was proposed last year by director Lord Harris and Keswick, who said that KSE had “an extensive and long experience in modern sports management” and argued that the services were used to ensure that Arsenal “keep progressing”.
There will also be a request on Thursday by fans for an independent review of the club’s transfer strategy following a summer that saw only one addition – goalkeeper Petr Cech – to the first-team squad.
Arsenal were the only team in Europe not to sign an outfield player, even though manager Arsene Wenger had around £40 million available. Wenger’s transfer budget will further grow next year and directors will be quizzed about cash reserves that stood at £193.1 million as of May this year. Supporters will ask why more money cannot be spent on either improving the squad or lowering ticket prices.
“If a club exists to benefit supporters, why sit on a cash pile that grows larger every year, and is disproportionately large compared to every other Premier League club?” says one pre-submitted question.
Arsenal are likely to point that they did spend a record £114 million on new players in the financial period until May 31 2015, while their wage bill and turnover rose to respective record levels of £192 million and £344.5 million. Wenger has repeatedly said that his reluctance to sign players this summer was down simply to availability and his high opinion of the existing squad, rather than any financial constraints.
Kroenke and his son, Josh, are both non-executive directors and regularly attend matches as well as board meetings. They both intend to be at Thursday’s AGM and, since becoming majority owner in 2011, Kroenke Snr has addressed fans at the meeting. Shareholder questions have previously always been taken in full, although it is generally Keswick, chief executive Ivan Gazidis or Wenger himself who answers on behalf of the club.
Wenger will also speak directly to shareholders about his hopes of challenging to win the Premier League title this season after lifting a second consecutive FA Cup in May to equal the all-time managerial record of six victories.