A sad day for supporter shareholders

Stan Kroenke has launched a £1.8bn bid to take over Arsenal Football Club much to the despair of the Arsenal Supporters Trust, with the news that shares of supporters will be forcibly removed representing a significant change in Arsenal’s history and the relationship between the supporters and the club.

Kroenke’s company, Kroenke Sports and Entertainment (KSE), currently own 67 percent of the club and has offered to purchase the 30 percent held by Alisher Usmanov’s Red and White Securities firm. KSE says it has received an “irrevocable undertaking” from Red and White Securities to accept the offer as soon as possible.

This result will be a club that will be 100% privately owned, removing all other shareholders whose shares will be compulsory purchased, removing some important shareholding rights.

A statement from The Arsenal Supporters’ Trust read:

“Stan Kroenke taking the club private will see the end of supporters owning shares in Arsenal and their role upholding custodianship values. The most dreadful part of this announcement is the news that Kroenke plans to forcibly purchase the shares held by Arsenal fans.

“Many of these fans are AST members and hold their shares not for value but as custodians who care for the future of the club. Kroenke’s actions will neuter their voice and involvement.

“The AST is wholly against this takeover. Arsenal remains too important to be owned by any one person.”

Football supporters purchase shares in their club both individually and collectively (normally through the vehicle of a Supporters Trust) as a means to give them more involvement in the clubs affairs, such as requesting information or putting forward a resolution for the AGM. Public Companies have commitments over and above private companies primarily around disclosure and reporting which is why the reaction has been so strong against the move.

An avid follower of the supporters movement and senior lecturer at Birkbeck Sports Business Centre at the University of London, Sean Hamill in a past article stated: “At clubs where supporters are able to buy shares, it is important to use the mechanisms available even to the smallest shareholders. The Arsenal Trust has 750 members who collectively speak for approximately 3% of the club’s equity, so they have little voting power,” he says. “But they use that voting power as a very effective campaigning tool” he adds.

This situation shows why Supporters Direct and it’s members have been campaigning so hard to ensure clubs commit to adequate information to be shared as part of the structured dialogue commitments between clubs and supporters which was agreed by all major football stakeholders as part of the Government Expert Working Group on Football Ownership and Engagement in 2016.

As mentioned on Page 21 in the Engage document, there have to be suitable levels of information that have been shared in order to build trust although at present it has been left to individual clubs to decide the information that they share at these meetings.