Arsenal owner Stan Kroenke has taken $4.9 million out of the club, sparking fan fury.
The move was revealed on Wednesday when the latest company accounts showed that $4.9 million had been paid to Kroenke’s company, KSE LLC, for strategic and advisory services relating to Arsenal’s broadband division. Making matters worse, the $4.9 million is the same amount that was raised from the much-criticized 3% rise on season-ticket prices for the 2014/15 season.
The dividend marks the first time Kroenke has taken money out of the club, an issue that has come up repeatedly in previous board meetings. For years Kroenke has been asked whether taking dividends from the club is something he might do but the owner has repeatedly dodged the question. The writing had been on the wall, however, as Kroenke explained in a November 2011 that taking dividends wasn’t something he saw as inappropriate given his background in American sport franchise business.
“We have a whole different philosophy I think in the States, maybe, but I think it’s time for everybody to think a little bit. I think they ought to think about who invests in these clubs. ‘[Manchester United] took money out of the club. So what? [LA Lakers owner] Jerry Buss takes money out of his club. A lot of owners in the US do. No one ever says anything about it.”
In England, however, taking money out of the club is a big deal, as evidenced by the social backlash from Goonahs fans:
Stan Kroenke imposes a 3% ticket price rise on fans that raises circa £3m, then he bills Arsenal £3m for his advisory fees. How convenient!
— tim payton (@timpayton) September 23, 2014
Other club owners are investing their money, Stan Kroenke is withdrawing money from Arsenal's account to tidy himself. What a billionaire
— Isi Ewu Republic President (an Ngwa man) (@OdinakaChelsea) September 24, 2014
So what’s the significance of all this?
For starters it means that Kroenke, like the Glazers, is running the club as a business -- and one that he intends to profit on. So while profiting on a sports franchise may seem like a natural goal on its face, doing so in this fashion, through dividends rather than through trophies, winnings, sponsorships and sales, tends to come at odds with the community feel of an English football club. Then, there’s also the huge fact that $4.9 million appears to be going directly from season ticket holders’ pockets into Kroenke’s wallet. Not a good look.
To date, Kroenke has yet to take dividends from his US-based sports franchises, including the Denver Nuggets, Colorado Rapids, Colorado Avalanche and the St. Louis Rams.
