Usmanov: Our New Insect Overlord!

"Usmanov, who turns 56 tomorrow, is in pole position to buy Lady Nina Bracewell-Smith's 15.9 per cent share in the club, a transaction that would take Usmanov well in excess of 30 per cent and would precipitate a formal takeover bid for the club, in agreement with the City's financial rules."

- The First Post

So it turns out that Usmanov is going to buy Nina Bracewell-Smith's 15.9% stake, thereby triggering the mandatory buy-out clause and setting up a clash with Stan "The Man" Kroenke for world domination and ownership of the Arsenal. On a slow news week, when the only significant stories were Djourou's injury and Sagna's hair, it's something worth looking into.

When Usmanov first started taking an interesting in the Arsenal, gooners were quite angry. He had a shady past. He's a foreigner. He looks like a cross between a very fat badger and a demustachioed walrus. And he's not a cigar-smoking, old-money, Etonian toff like the other significant owners of Arsenal Inc.

I'm not saying all these points were valid reasons to dismiss Usmanov's bid, but they were defended quite vigorously, if I recall.

However, two years down the track, and people seem resigned to the fact that Usmanov will play a significant role in Arsenal's future. Why is that? What happened to the protests, the burning effigies, the cancelled memberships and Highbury riots that were supposed to occur? Where is the opposition to a man who, given the questions about his past, seems to be unfit to own an organisation as awesome as the Arsenal?

Maybe we've admitted to ourselves that there's nothing we can do about it.

I must confess my allegiances at this point. I'm wary of Usmanov, and I'm wary of Kroenke, but I'm incredibly weary of Danny Fiszman, Peter Hill-Wood, Nina Bracewell-Smith and all the other old-money English owners of the club. I didn't like the way they kicked up a fuss when Stan Kroenke started buying shares. I found Peter Hill-Wood's xenophobic "we don't want his sort" rants disgusting. And I don't like the current cloak-and-daggers boardroom manoeuvres. It reeks of bad taste.

At this point in time, I don't really care who takes over the club. Usmanov and Kroenke want it because it's a big club which turns a profit, with untapped global potential. Hopefully they'll invest money into the club, build up the squad and promote it around the world. I've always felt that the Arsenal could have as big a presence as Man Utd or Real Madrid, and I hope our new owners feel the same way. But they might not. It's well within their power to do a Liverpool or a Man Utd, leverage the shit out of our club, sit on it until the value of increases, and then flog it off to a football-obsessed Gulf State sheik.

That's profoundly depressing.

In an ideal world, the Arsenal would be a non-profit organisation run by its members. Of course, given that the Arsenal is worth £1.2 billion at the moment, it'll take a bit of thinking to find the funds. I don't think it'll be as easy as pooling up our money, trotting over to the bank and asking for a £1.2 billion loan, with nice, easy repayments over 50 years. I think we'd need a billionaire to help us out.

So here's the deal. We need Alisher Usmanov and his untold riches. We could make a deal with him. Say, if he's willing to buy out the club, set it up as a member-owned and member-run organistion, and then divest all ownership to the members, then we're willing to accept him as Arsenal's sugar daddy. We'll put banners around the stadium proclaiming our love for him. We'll remove the cannons from outside the stadium and we'll erect a six-foot copy of Usmanov's head on the steps.

And as a measure of good faith, we should stop calling him a fat, walrus-like Uzbeki hitman. It's only fair.

All Hail Alisher Usmanov, our new Overlord!

We don't need that sort of money

Bart: Okay, we're young, rich, and full of sugar. What do we do?
Milhouse: Let's go crazy, Broadway style!

- Boy Scoutz 'N the Hood, the Simpsons

Unlike Bart and Milhouse, we're not going to go crazy, Broadway style. We're not even going to go crazy Real Madrid style. We're going to sit at home and count our pennies. It turns out that we're not young, rich and full of sugar - we're a club of accountants, not a club of Perezian capitalists.

After all, we're the club that turned down £100 million.

Ivan Gazidis had this to say about the right issue:

"With regard to debt, the conclusion reached is that the Club has a very efficient capital structure with long-term debt on attractive interest rates. We can comfortably afford to meet the annual costs of this debt while at the same time generating surplus funds to invest in the Club. Using permanent capital to pay down debt would not, therefore, radically transform the annual cash flow of the Club."

So, in a few sentences, he's told us that we're not mired in debt, and we DO have the funds to invest in the Club. In fact, we're so comfortable that we don't need a £100 million cash injection to pad out our debt, nor to augment Wenger's transfer budget. Everything's fine as is.

Then again, we couldn't afford £21.5million for Melo, and it seems like we need to sell players to generate funds for further acquisitions. The rest of our transfer season seems to hinge upon getting rid of Senderos and Adebayor. So despite our debt being well-structured and on attractive long-term interest rates, maybe a few £££s wouldn't go astray on the transfer front? Apparently we're after Ever Banega now, and even though he's potentially world-class in Football Manager, I'd rather someone proven in real life.

I realise my stance reeks of short-termism. We have a club with a sustainable financial structure. We're the only club in England that has that. We're not Man Utd or Liverpool, who are both mortgaged to the hilt with bad debt. We're not Chelsea or Man City, who're at the whims of billionaire playboys. We're the Arsenal, and the only way forward for us is to play it safe with regards to our finances. It'll be a tragedy if we muck up and sink the club into a Leeds-style fiasco. And it'll be even worse if we were gobbled up by Usmanov.

But still, a rights issue of £100 million wouldn't hurt. Especially if it's negotiated so that none of the major share-holders increase their stake relative to each other. All it would mean is that Kroenke coughs up £25 million, Usmanov £25 million, Fiszman £10 million, and so forth. And then Wenger would have the cash to buy players who are already right now. Like Melo.

The whole idea that we're so well off that we don't need £100 million, and yet have such a small transfer budget that we need to sell to buy, is inconsistent. Either the Club have the money to service the debt and retain a squad that can challenge for the leage, or we don't. If the Club has that money and isn't spending it, then it's doing us a disservice. If the Club doesn't have that money, surely it should consider alternative methods of raising such funds, such as the rights issue?

This rejection shows the aversion the Board has towards Usmanov. That's acceptable. When the guy walks, storm clouds rumble with apocalyptic gloom. But worryingly, it also shows that Kroenke, Fizsman and co. are happy to spend millions buying out each others' shares, but not so happy to splurge a bit to make Arsenal a better team.

And that's not acceptable, as far as I'm concerned.

Usmanov the Underwriter?

This is an interesting one.

In May, Usmanov proposed to underwrite a £100m rights issue to reduce the club's debts and give free up money for Arsene Wenger to spend. At the time, I thought it was just some bluster from Usmanov, but it turns out that the board have decided to have a serious think about his proposal. I suppose the shrinking demand for outrageously over-priced corporate boxes has convinced the Board that the global recession's going to hit the Arsenal quite badly.

If we do this, Usmanov and Kroenke will each have to stump up £25 million to maintain their 25% stakes. They have the finances and the appetite to do so. The other major shareholders, Fiszman and Bracewell-Smith, have the finances to match them but probably not the appetite. That would leave the AST and minor shareholders, none of whom would probably have the ability or desire to maintain their percentage.

And if I'm not mistaken, if Usmanov underwrites the scheme, he gets to mop up any shares that don't get taken up. He'll be able to grow the pie higher, so to speak, and increase his stake. He'll get more influence at the club, and might even win enough respect that he'll get a seat on the board.

Or maybe not.

On one hand, I'm wary whenever Usmanov starts rumbling about the club. He's been on the scene for two years now, and he hasn't grown on me. You know a takeover's on the cards at some stage, and this could be the beginning of the end. And all things being the same, I'd rather not see the Arsenal as Usmanov's personal possession. It just doesn't sit right.

On the other hand, £100 million would be quite tempting. The club keeps saying we're as richer than Rockefeller, but you now they're just lying. The till's fairly empty, and we could really use that money for players. At the moment, the transfer season's just waiting to get off, and it'll be really nice to have a big wad of cash when the likes of Benzema and Melo step onto the stage.

So what to do? We'll just have to wait and see, I guess.

Pictures

I got lots of pictures in my head

You better not turn off the projector

I got lots of pictures in my head

You better not save them up for later

- Pictures, Sneaky Sound System

I'm a bit tired this morning, so this will be told out in pictures. 

We're facing Chelsea in the league tomorrow, without Arshavin, and without much to play for. I'm tempted to play the kids for this one, purely because I'm curious about the likes of Coquelin and Jay-Emmanuel Thomas, but then again, we've always got something to play for when we're up against Chelsea. We can't let this man win:

It's the principle of the thing. 

Usmanov is bitter that Kroenke is now the de facto controller of the board, while he's been frozen out. He's trying to curry favour with the fans by offering us his fabulous wealth as a transfer kitty. 

And Kroenke? Well, we just love our favourite American - even if he hasn't done much apart from install a bunch of executives on the board. 

Meanwhile, this man has written a good article about the Arsenal's problems. Since he's someone who actually knows Arsene Wenger, and who has played football under him, it's worth a read. It's nothing earth-shattering, just that we need four new players and a new approach to the side. It's what everyone else is saying. But it sounds better coming from Lee Dixon. 

And finally, Wenger believes that Nicky Bendtner was set up in Trouser-gate. Frankly, no one cares. Bendy was gutted after the match, went out to forget his troubles, got shitfaced, got legless, and almost lost his pants. He's entitled to that once in a while. 

Actually, I feel sorry for him. He's probably the only guy in history to have been depantsed twice in front of a national audience in a single night. Poor Nick.

Anyway, it'll be the Chelsea match in about twelve hours. Enough time to sit back, relax, and wait for a match that doesn't mean much to nobody, but which we'll still watch anyway.  

Usmanov in love

"When a man loves a woman he can't conceivably sell that love. I'm in love with Arsenal. I have no intention of selling it [my stake]. That may be possible at some point in time when I know that Arsenal hates me. I will make sure this doesn't happen. I have not lost one single share."

- Alisher Usmanov, who counts his love in number of shares

When I read this article, it made me a bit uncomfortable. On this blog, I often drop cheesy phrases like "I'm in love with Arsenal", but I've never seen anyone else say things like that. Do I sound as creepy as a fat, love-struck oligarch?

Whatever the case, Usmanov loves the Arse like a man loves a woman. And how doth he love her? Let me count the ways:

1. He buys a 20% stake of that lady from a jilted ex-lover, and they form a consortium to woo her back (with a "gentlemen's agreement" to share her equally).
   
2. He stabs the ex-lover in the back and tries to buy the rest of the lady from her legal guardians. 
   
3. When the lady's numerous admirers raise objections to his shady past, he silences them with an army of lawyers, and mounts a charm offence so clumsy and awkward that even the neutrals dislike him. 
   
4. He tries to woo the lady's mentor by offering him money with which to buy trinkets to adorn her many comely attributes. Her mentor rebuffs these trashy ornaments as he views them as immoral. 
   
5. Having alienated the lady's guardians, mentor, ex-lover and numerous admirers, Usmanov hangs around with his 20% stake, twiddling various parts of his anatomy (i.e. his thumbs, you dirty bastards), waiting for the day that the lady comes of age (i.e. when the lock-down agreement ends next year). 

I love the Arsenal as well, but not in the way that Usmanov does. The feelings I have for the Arsenal is like the feeling I get when I'm walking through the Tiergarten, when the sun is shining and the leaves are falling around me. It's a love of something that's beautiful because it's intangible, and fragile, and fleeting. 

And it's not something that can be bought for £7000 a share.