Are Arsenal Next For Takeover? - 09/02/2007

With the American acquisition of the Liverpool franchise (as the new owners kept referring to it) effectively complete attention is now turning to which will be the next club to be taken over. The only 'big four' club not in foreign hands is Arsenal. The club's operating profit for 2004-5 was £20.2m and its margin 18 per cent. Turnover is expected to rise from £115m to £170m this year as a result of the move to the Emirates Stadium. However, in September the Islington club revealed its net debt had risen by £100m to £262m after refinancing, rising to £385m in 2007. It is not clear how long it will take to pay the debt off. Joe McLean of Grant Thornton says that failure to qualify for the Champions League would be 'catastrophic' and in the medium term the number of English places in the competition is under threat. Arsenal denied last September reports that talks with a Russian consortium had broken down over a £350m asking price. Historically, the club's split shareholding has made any offer unlikely. Danny Fiszman, a diamond trader, has the largest stake with more than 25 per cent, followed by club vice-chairman David Dein with 21 per cent. At least one financial adviser to Premiership clubs is pointing out what a big catch Arsenal would be for an investor.

Arsenal are known to be involved in advanced talks with a billionaire American sports tycoon, Stan Kroenke, about forming a partnership with Kroneke's Major League soccer franchise Colorado Rapids. The deal is primarily concerned with Arsenal's push for expansion in the USA, but will link the North London club with Kroenke, one of America's richest men with a personal fortune of more than $2bn. The 59-year old property magnate is a sports tycoon whose portfolio includes the NFL's St.Louis Rams, the NBA's Denver Nuggets, the NHL's Colorado Avalanche and the Rapids. There are no plans on the part of Arsenal's major shareholders to sell, although Granada TV (9.9 per cent) would like to offload their shares, but Kroenke would given the major shareholders a ready-made option if they changed their minds. Under the terms of the deal, the Rapids will be re-named either Arsenal Colorado or Colorado Arsenal, once some legal obstacles have been sorted out. They will play in Arsenal's historic maroon strip.

It is believed that another American billionaire who holds three sports franchises has been looking at Premiership clubs. This is not Robert Kraft who owns the New England Patriots and who at one time expressed an interest in Liverpool. Newcastle United is probably the most attractive club potentially available to a bidder. Manchester City and Reading would also be available, but are unlikely to be thought glamorous enough or with sufficient potential by an international bidder.