Arsènal

“We think you should leave.” To be told by chairman Peter Hill-Wood that her fellow directors would like her to step down was not what Lady Nina Bracewell-Smith expected to hear just a few hours after being unanimously re-elected at the October 2008 Arsenal Holdings Annual General Meeting. In fact the re-election had been a formality under the company’s articles of association that had to take place in order that the meeting could progress without any of the shareholders questioning what was going on behind the scenes, but it was in keeping with a day full of surprises.

At the meeting, Lady Nina had sat next to Arsène Wenger and Stan Kroenke. Few shareholders had expected to catch their first sight of their newest director, Kroenke – invited onto the board only a few weeks before – so soon. The nameplates on the top table had also initially included that of the most important shareholder, Danny Fiszman, but it had been hastily removed when it became apparent that he was not going to be in attendance – due, it later transpired, to transport difficulties from his Swiss home. However, several interpreted his absence as a sign that the club was no longer a major priority of his and that he planned to make an exit once he could sell up under the terms of the lockdown agreement in April 2009. (Until then no director could sell their shares and afterwards should they want to sell, first option had to be given to their fellow board members.)

The charade of Lady Nina’s re-election to head off any shareholder inquisition was not the day’s only irony. The directors had given their blessing – as they had on previous occasions – to the Arsenal Supporters’ Trust setting up a stand at the meeting in the hope of attracting more recruits to their cause. To promote their manifesto, the Trust had produced a small volume, Custodianship at Arsenal, highlighting the ownership and good governance of the club over many decades. The Hill-Woods were well represented, and after the AGM had finished, coincidentally a bust commissioned by the club of Peter Hill-Wood’s father, Sir Denis, was unveiled. The other notable family prominent in the Trust book was the Bracewell-Smiths, with Lady Nina the latest of a long line to serve on the board. Copies had been given to the directors, and it was favourably commented upon by the chairman. What he did not tell the meeting was that the immediate future of the just re-elected Lady Nina meant the publication was going to be somewhat dated within a matter of hours. It was a day that saw one dynasty at Arsenal celebrated, and witnessed another chopped down.

Lady Nina eventually resigned a few weeks later after failing to overturn the decision to force her out. Peter Hill-Wood admitted, “She came into the club because she took over her husband’s shares and I fervently wish that she hadn’t left in the way that she did, because we tried to persuade her to stay in a capacity which she ultimately refused to do.” She had been offered an honorary position, a symbolic role, but nevertheless one that would allow her matchday privileges in the directors’ lounge. But of course she would no longer be able to harbour any aspirations of influence or power. “As a director she was not right,” revealed Hill-Wood, “but why not stay in a capacity that would allow her to maintain all the other status? But she wouldn’t do that.” There was a palpable sense of relief amongst the directors after her announcement that she was quitting. “She confused me and upset me considerably because we offered her all sorts of olive branches,” admitted Hill-Wood. “I’m a reasonably easy person to get on with and as long as you don’t totally upset the apple cart I’m going to go along with it [but] she was not very easy to deal with.” What he would not disclose was that one of the main causes of concern was the board’s belief that she was becoming too well disposed to Alisher Usmanov’s Red and White Holdings company, an unhealthy liaison with a potential predator, but one which Lady Nina vehemently denies. “I had been unfairly treated since the day I entered [the boardroom],” she said. “Danny Fiszman always kept his distance and you got the feeling that if you didn’t fall in line you were marginalised.”

The invitation to bring Stan Kroenke into the fold was a key tactic in the move to repel a possible takeover by Red and White Holdings. Hitherto persona non grata, Peter Hill-Wood’s view of Stan Kroenke had changed somewhat with the passing of time. “Stan Kroenke is absolutely the right kind of shareholder,” the chairman reflected after the American entrepreneur had been appointed as a fellow director, “because he’s a wealthy man and isn’t leveraged up like Russians. He’s really dedicated to sport. He’s very interested in football and trying to develop it in his country and very realistic about it. He doesn’t think it’s [Major League Soccer] going to rival the Premier League and he believes in what we are doing at Arsenal. And he’s not remotely interested in taking over the club, at least he says so and I’ve no reason not to believe him.” “He owns his own franchises and has a big property portfolio,” Ken Friar added. “He knows a great deal about property and so it was felt that he could add to our understanding of both sports and property. He’s also involved via his family in retailing, and we’re involved in all those areas. We felt that he could bring a lot to the table and he has.”

Hill-Wood explained the reasoning behind his outburst – “We don’t need his money and don’t need his sort” – which he made in the aftermath of Dein’s dismissal. “I said it because I had no idea who he [Kroenke] was. I objected to him because David told me he’d never heard of him and very clearly that wasn’t correct. I rang him [Dein] up and said, ‘I gather this American is going to buy ITV’s shares and I thought I’d let you know’. He said ‘Oh really? Oh, I heard something was going on’. And I thought ‘Uh-oh’. So that really antagonised me and I’d no idea who Stan Kroenke was. When I first met him I said I was extremely sorry about the remarks, [some of] which actually I didn’t make. I shouldn’t have spoken to the media. They did quote quite a lot of what I said and then embroidered it quite considerably. I said to Stan, ‘Look, I’m sorry, I didn’t make all the remarks that were quoted but I did make one or two of them, and I withdraw them immediately.’ He said, ‘Don’t worry about it, I’m not worried’.” Reflecting on Dein’s version regarding his involvement, Hill-Wood said, “I know David had made contact. That was wrong.”

With Kroenke on the board it was no longer critical to keep Lady Nina onside as a counterpoint to Red and White Holdings. She understood the harsh reality. “They [the board] didn’t like having to take me in, but because of the dismissal of David Dein, I had 15 per cent and they had to put up with it. Now they’ve got Stan Kroenke they don’t need me any more.” The chairman was sanguine about the potential dangers of forcing her out. “If her shares were sold, so what?” he pondered. “The position has changed dramatically in the last five or ten years. If some outsider comes in and makes an offer for the club in his wisdom and wants to buy it, that’s maybe the end of an era but you can’t fight against it unless you own 51 per cent of the thing yourself, so we took a chance [with Stan Kroenke].”

That Lady Nina had Hobson’s choice was made clear by the resignation of her cousin Richard Carr from the Arsenal Holdings Board. It indicated that the rest of the board wanted to unanimously vote her off as they had with David Dein some 18 months previously. Carr’s decision to step down ensured he would not have to face the embarrassing choice of whether or not to vote against another family member. He remained a director of Arsenal Football Club itself, although with the construction of the stadium and the ramifications of the property development, the power base had shifted away from the football club to Arsenal Holdings plc, the company that oversaw all of the club’s activities, football or otherwise.

Whilst at one time Red and White had been buying shares for as much as £10,000 each, the going price had drifted down by about 25 per cent around the time of the 2008 AGM. If Lady Nina had sold to Red and White Holdings, their stake would have exceeded 30 per cent and they would be forced to make a mandatory offer for control at a high price that simply wouldn’t reflect the current value of Arsenal. Moreover, in common with a number of Russian billionaires, the extent of Usmanov’s fortune had dwindled dramatically as economic problems manifested themselves across the globe. Thus, the threat of a hostile takeover had receded somewhat. In February 2009, Red and White bought just enough shares to take them over the 25 per cent that would allow them to block any extraordinary resolutions the board might propose. The only real menace to the status quo remained Usmanov forming an alliance with Lady Nina with combined shares of 40.9 per cent, an ever-present cloud on the horizon to a board without a majority stake.

For Danny Fiszman, Red and White was synonymous with David Dein, and hence no love was lost. It was a message that came through loud and clear to those who had paid the former vice-chairman handsomely for his shares. Installing Dein as the chairman of Red and White Holdings, whose sole raison d’être was to buy an interest in Arsenal, was presumably a move to court favour amongst the club’s supporters, ensure the loyalty of Arsène Wenger and have an experienced administrator at the helm in the event that they gained control. But even if Dein himself remained a soulmate of the manager’s and a popular figure amongst many of the fans, that affection did not carry over to Alisher Usmanov and in time Dein’s usefulness became questionable. He failed to gain his new enterprise any significant groundswell of support, and was an insurmountable obstacle to them having any meaningful influence or relationship with the existing board. Asked what exactly he did in his role as chairman of Red and White Holdings, Dein always sidestepped the question, although he kept his top-level contacts at FIFA and UEFA, whilst remaining a sought-after figure at football conferences.

In September 2008, David Dein resigned from the company. He denied he had been exploited by Red and White and became expendable when Arsenal refused to deal with him. Privately he explained, “It was my choice. I brought two billionaires [Alisher Usmanov and Stan Kroenke] in. The exercise had run its course. It is no bad thing it has come to an end, I want to retain my independence and call it as I see it.” He was now no longer an habitué of the Red and White corpor ate box and had to watch the game from his Club Level seats. (He has four together with several in the upper level, most of which are given away to charity and friends on a match-by-match basis.) Subsequently, Red and White were granted four seats in the directors’ box and a table in the directors’ dining room at the Emirates. It was a clear signal that with Dein out of the way, relations had begun to thaw.

But it was too late for Lady Nina. The lockdown agreement was the equivalent of a marriage and the suspicion amongst the board was that Lady Nina might have been playing away. She claims that she was frozen out after committing the apparent minor misdemeanor of visiting the Red and White box at the Emirates at half time during one match. The invite came from Usmanov’s partner, Farhad Moshiri, whom Lady Nina asserts only wanted to introduce her to his sister. Her downfall was in the timing. If the meeting had occurred after Dein’s departure from Red and White or in the directors’ lounge then perhaps there would have been no repercussions. The final Bracewell-Smith to serve as a director at Arsenal had left with a bitter taste. “Dismissing a director is taking matters to an extreme,” she said. “And the timing was callous [half an hour after the directors’ lunch following the AGM]. People shouldn’t behave like that to a woman.”

What seems likely is that Lady Nina not only wanted to have more input reflecting the size of her shareholding, but she found herself increasingly at odds with the board’s decisions. She conceded that there was “one particular aspect [that may have caused friction]. I didn’t accept the plurality of the shareholding.” She certainly felt that she had as much to contribute as her elderly colleagues. In a telephone conversation her friend Geoffrey Klass suggested to her that she employed the wrong tactics. Klass gently rebuked her. “You should have kept quiet, gone with the flow and realised how lucky you were. I was jealous of you,” he said. “You were a director of a fantastic football club. They wouldn’t even let me sit in the directors’ box.” (When he had a substantial shareholding – four per cent – Klass had asked for a seat in the box and was politely refused.) Irritated, she exclaimed “You think so little of me,” and promptly put the phone down on him.

Though in hindsight Lady Nina feels “I could have been a bit more proactive”, her abiding feeling remains one of injustice. “They [the board] wanted to remove me; they had other plans up their sleeve,” she said. One of these was the appointment, after a long drawn out interview process, of Keith Edelman’s successor. The two leading candidates were Arsenal season ticket holder Paul Donovan, then CEO of Vodafone, and the Celtic CEO Peter Lawwell, who significantly had experi ence in property development. Lawwell was considered the favourite, but he decided to remain in his current post. Someone who knows Lawwell commented that, “as an ambitious man who had served his time at Celtic, perhaps he wasn’t reassured regarding the stability of the situation he was going to inherit.” Rather than then appoint Donovan, it was decided to continue the search.

So septuagenarian Ken Friar had to hold the fort a bit longer, taking on the duties of two vital positions at a time he should have been enjoying his well-earned retirement. Wenger himself later admitted, “It [was] important for the club to get someone because we always relied on Ken, who had to do absolutely everything and that’s too much for one man.” With his tenure as acting MD lasting only a matter of months, Friar certainly wasn’t going to make any major long-term decisions and as a result the club marked time. All the right things were said about supporting Arsène Wenger, but the manager was working a lot harder than he had to when David Dein was around: any weeks without a midweek fixture were often filled by an overseas recruitment trip. (After “the most disappointing week” of his Arsenal tenure – humbled by Manchester United in the Champions League semi-final and having the heaviest home loss inflicted on them in 20 years by Chelsea in the Premier League – he couldn’t wait to get on a plane to France with next season’s reinforcements top of his agenda.)

In fairness though the club had offered to draft in a replacement under the guise of ‘director of football’ during the summer after Dein’s exit. “David used to do that before he left us,” Friar said (Dein would represent the manager, often relieving him of the travel, trials and tribulations invariably involved in transfer deals). He went on to explain how things worked subsequently. “When he left I was asked by the board if I would take on that role, which I did. Arsène would identify the player – and that always has to be the way. The manager has got to identify the player. Depending on who he was and where the player is etc, generally speaking, either Arsène or I would make a call. It’s horses for courses. If the club was Blackburn Rovers or Manchester United it would be me that made the call. If it was Lyon or a team that he knows the people there, he would make that call. Then the appointment would be made, and they would come in. Generally speaking, the meeting would take place at London Colney and there would be Arsène and myself and the manager or chairman of the other club getting things moving. Sometimes it involved more than one meeting. Once we’ve got the terms agreed in principle, then we get the player and the agent and it might mean us going abroad, which we’ve done, or them coming here.” (Both Gilles Grimandi, Wenger’s top man in France, and Nicky Hammond, who occupied the position at Reading, were mooted for the role of director of football. It seems that Grimandi was reluctant to commit himself as a result of the uncertainty of Wenger’s own long-term future. And so the situation was allowed to drift.)

“As I said at the time when I left,” Dein responded, “the landscape is changing. Manchester City, Aston Villa, Everton and Tottenham are not going to stand still, to say nothing of Manchester United, Chelsea and Liverpool and with the tax situation changes, costs are just going to get higher as players’ salaries will not go down.”

“He’s never had the luxury,” Dein replied and questioning the board’s ambition asked, “Is it strong enough to compete with the likes of Barcelona and Milan? Compared to Manchester United, we [Arsenal] are in the Stone Age. Have they [the directors] ever said, ‘Arsène, don’t have a conscience over the cost. We’ve gone past that stage now. We’ve got to be brave and bold in the market. Just tell us, how much do you need to win the Champions League?’”

The antiquated fixtures and fittings of the boardroom at the old Highbury Stadium may have been moved piece by piece a few hundred yards west to the Highbury House building (including the 1970s green leather chairs in the boardroom which look passé in contrast to Ken Friar’s wonderful historic desk handed down from Herbert Chapman through successive managers and club secretaries) yet the relocated boardroom could have usefully employed a more contemporary item, namely a revolving door. Since the move, three directors have been effectively booted out, with Richard Carr demoted, to be replaced by the end of 2008 with two fresh faces from the USA.

The idea that the board would eventually view an American billionaire as a potential bedrock of the club must have seemed a very fanciful notion in the summer of 2007, but with Alisher Usmanov a constant presence, Stan Kroenke gradually came to represent a much safer option. His approval rating was also helped by an endorsement from the Arsenal Supporters’ Trust, who held meetings with Kroenke and his key men in both London and Denver, as part of their objective to maintain relations with all of the club’s major shareholders in their mission to influence its ownership and governance. Even so, it was a surprise when Kroenke mingled with members of the Trust at their 2008 Christmas drinks gathering in the stadium’s Diamond Club. The function was arranged for the same day as a board meeting, to encourage directors to come along. Even so, few anticipated Kroenke would be in the country to attend the meeting, never mind the social gathering held by the Trust, which he did in the company of Danny Fiszman.

It was soon apparent that the two men had formed a good relationship (though Fiszman the consummate professional had concealed his estrangement from David Dein for some time, putting on a show of corporate unity in public which even fooled some of his colleagues). If Fiszman, in keeping with his reserved nature, was slightly guarded, Kroenke was open and effusive. The appointment of the club’s new CEO Ivan Gazidis, previously Deputy Commissioner of MLS, had recently been announced. Gazidis would start work in the New Year, and there was a strong belief that Kroenke had been instrumental in bringing him to the club. “I had nothing to do with it,” he told his Trust inquisitors as he supped a beer, “If my fellow team owners [in the USA] thought that they’d be very upset with me, but he [Gazidis] is a good man.” And Gazidis himself confirmed the correct protocol had been observed. “Stan Kroenke was not involved in my appointment to this job,” he corroborated. “I was very specific that I didn’t want him informed until the decision was made.” A fortunate coincidence, then, given Kroenke’s divided loyalties and the high regard with which Gazidis was held back in the States.

The man who took the job was born in South Africa (unlike Danny Fiszman who is often categorised erroneously as South African by the media, when in fact he spent his early years in Antwerp before growing up in Willesden Green in north London where he learnt to love Arsenal) and raised in England. He played football competently enough to gain a blue for Oxford University as a right winger (“I had speed and very little else,” he claims) and even played at Wembley Stadium in the Varsity Match against Cambridge in the mid-1980s. He qualified as a lawyer, and worked for a couple of years in the USA before he was headhunted for a job to help develop a fledgling league born in the aftermath of the 1994 World Cup. The first Arsenal match he attended after the announcement of his appointment was the 1-0 home victory over Wigan in December 2008, a sterile encounter best remembered for substitute Emmanuel Eboue being booed off, his performance so dire he had to be substituted himself. A month later after a similarly insipid 1-0 victory against Bolton (who, according to their chairman, came “expecting to get beaten by 2 or 3-0 and were pleasantly surprised to get within 15 minutes of the end at 0-0”), when it was suggested to Ivan Gazidis that things were sticky on and off the field, he discounted the notion. “I’m certain that’s not the case,” he told a guest in the boardroom, “otherwise I wouldn’t be here.”

Unlike his predecessor, Keith Edelman, Gazidis was someone who could be termed a football man as well as a businessman. Peter Hill-Wood admitted it was important to start looking to the future in the boardroom: “He [Gazidis] is 45 years old, the younger generation – which is better than being 70-something years old. We are looking to recruit younger people at the top.” But there was so much more than his age that must have commended Gazidis. “In October I was approached by the Arsenal board and asked if I would be interested in this position,” he recalled. “The moment I realised that this was a real possibility something just took over me, and I knew it would be a once-in-a-lifetime chance. It was a purely emotional decision and not a rational decision at all. The decision was driven by the fact that I love watching Arsenal play. There is something about the purity of the way that Arsenal try to play the game that appealed to me. There is something about this club. It’s a set of values, traditions, continuity, excellence but not just looking backwards, also a real vision for the future.” Straight away he got to grips with the key issues. “Our fundamental questions are: Are we operating as efficiently and as well as we can? Are we choosing the right players? Are we spending the money in the right way? Are we generating as much money as we can as a business to fund our player acquisitions? And within those parameters you can have a very interesting debate about whether we are being as efficient as possible. This club operates on the self-sustaining model.”

With Gazidis’s experience of marketing in Major League Soccer, he should undoubtedly add something to the club’s commercial operation, an area that badly needs some attention, as Hill-Wood conceded. “On the commercial side we’re lacking and we’ve got a lot of catching up to do with Manchester United, Barcelona, Real, even Liverpool and maybe Chelsea. There is a lot that we can develop and a lot of things which are probably alien to my background but I’m hopefully realistic enough to realise that I’m going to have to forget that we’re not a little old football club in north London. Ivan’s going to help develop the club in every aspect of our business, which is now much more than a football club, it’s all the commercial activities. It’s a big brand.” And it needs a different calibre of person to service it. “I’m just looking for very, very smart people,” says Gazidis, “who are able to help in the development of a business plan, a strategic plan for how we manage our playing pool amongst other things. There aren’t many clubs that have a fully developed business plan.”

Gazidis subsequently detailed his way of working. “I’m very systematic in the way that I do things,” he explained. “My focus over the first five months has been one of evaluation. Less on communication of vision, direction and plans so far, more focused on the needs of the club where the club can benefit from additions and adjustments. The focus has been relatively small and inward looking, [about] the changes we need to go through as an organisation so that we can take the next step. And the next step is the big step we have to take, which is to move beyond the Emirates and look at where the club is really going over the next five to ten years and deeply understand which strategies we are going to be adopting and which steps need to be taken in order for those strategies to be successful. To do that requires us to take a little bit of a step back from some of the activity that we’re involved in and to come up with a business plan for the club.”

The CEO was certainly aware of the crucial importance of the paying public (who were taken for granted by some of his peers who had been around much longer) and readily met with the various supporters’ groups within a few weeks of his arrival – the Arsenal Supporters’ Trust, REDaction (a pressure group formed to improve the atmosphere at matches) and the Arsenal Independent Supporters’ Association. He immediately tuned into their language. In his very first interview, he talked about the role of the board in terms of its custodianship of the club – using the kind of terminology that could have been scripted for him by the Supporters’ Trust. “I do think the fan/club relationship is key,” he emphasised later. “I think that fans have the right to express their opinions in the stadium. Obviously as a club you hope it’s supportive and I do think in general fans understand, particularly with a group of young players who we have right now and that if they’ve got fragile confidence, maybe you’re exacer bating the problem rather than helping it by expressing dissatisfaction. Nevertheless, I also accept that fans will feel at some point that this is where they exercise their voice and that’s absolutely right.”

He apparently took heed of critical comments regarding the lack of Arsenal identity at the stadium – something both Keith Edelman and Ken Friar had promised to do something about with little to show in the way of change except for the decoration of a concrete ring between the upper tier and the executive boxes which celebrated the years of the club’s trophy wins. “One of the things I’d really like to do,” Gazidis said, “is to move away from the architectural vision that we have of our stadium. I think in terms of what it is, it can be more Arsenal. It can be made more into a home. I don’t think it will ever be Highbury, you can’t recapture that history, but I do think it can become its own place and its own home.” Asked whether the selling of the naming rights made this process more difficult, he replied diplomatically, “I’m very happy with Emirates as a sponsor.”

Hitherto, it had only been the nagging of Antony Spencer, the land agent who found Arsenal the site for their new home, that pressured the board on ‘Arsenalisation’. Disappointed that the stadium was going to carry a sponsor’s name, Spencer at least achieved a small concession and ensured a link remained with the historic home, albeit in the name of the company office block, Highbury House. Danny Fiszman on the other hand had wanted to create a completely new era, his focus on the present and the future. Spencer recalled, “He was adamant that the old clock from the Clock End at Highbury was not going to be sited anywhere inside the new stadium.” Finally, after some fan representation, it was mounted on the rear of one of the scoreboards and is visible from the approach along the south, or ‘Clock End’ bridge. But inside there was very little – a photograph or two – to suggest the team had ever played at Highbury. Even the naming of the sections of the grounds broke from the obvious nomenclature. No longer did fans enter the East, West, North or South sides of the stadium, but different quadrants. Using colour coding to facilitate different access routes to the Emirates, most ignore it and arrive via Gillespie Road much as they did when attending matches at Highbury.

Peter Hill-Wood explained the reason for the need to bring in a different type of personality at the helm. “Keith [Edelman] did a very good job for us, but to take us forward in the future he wasn’t necessarily the right person,” he reflected. “It was the decision of the board collectively. Not me personally, we basically all agreed in the end, but I supported Keith as much as anybody. But we felt we needed a change. He’d done a good job and it was time for him to move on.” The club offered him a seven-figure retainer for ‘consultancy work’ for a year after his departure, although the former managing director has not been spotted at the club since the day he collected his personal effects, giving rise to some fanciful conspiracy theories.

One of Edelman’s major projects – to turn the old stadium into the Highbury Square residential apartments – has flattered to deceive. In the view of many, too much time and effort was taken up on property rather than football. Worse, it gradually became apparent that the huge surplus – profits of £100 million were initially bandied about – was wishful thinking as the economy faltered. “Keith had a quick mind,” recalls Antony Spencer, “but sometimes too quick for his own good. He wanted to do things his way.” A case in point was one part of the development which became a sticking point because Edelman wanted to break with precedent and go about it in a different fashion. He was so adamant it had to be done his way that it took the intervention of Danny Fiszman to return to the tried and trusted policy.

Danny Fiszman had put his heart and soul into making the Emirates a reality, and was second only to Arsène Wenger in transforming Arsenal from the underperforming football club it had been before his arrival. Peter Hill-Wood concurred, “I can’t describe the effort and time that Danny put in. It was seven years overall and we’d never have done it without him, and he’s not a man with a big ego.” And Ken Friar adds his own compliments. “Danny is one of the best things that ever happened to the club,” he believes, “and a very genuine Arsenal supporter. He’s very intelligent, gets on well with people, is a good negotiator, and he’s been a big, big benefit to us. He’s not one of those who wants to be upfront everywhere and not a man wanting to be on committees.”

But even if he was in for the long term, he decided now was a good time to share the burden and divvy up his stake. How much the uncertainty regarding the large shareholding on the outside played any part in the decision of Fiszman to transfer, in the spring of 2009, a third of his shares to Stan Kroenke is not known, but the outcome unquestionably pointed to a future in which the American would play a more active role, if only to safeguard his multi-million pound investment. After paying £42.5 million – the shares were valued at £8,500 each – in one fell swoop Kroenke became the largest shareholder on the board with a 20 per cent stake. The arrangement over the transferred shares was rather an odd one, as no money changed hands even though Kroenke now had the voting rights attached to them, and became the director with the most shares. Effectively, Kroenke owed Fiszman £42.5 million (Kroenke probably could have afforded to pay Fiszman immediately but perhaps he was accommodating the seller with regard to tax implications at the end of the financial year).

Curiously the new power shift reflected the arrangement that Fiszman had with David Dein during the 1990s, although then the boot was on the other foot. Over time, Fiszman had filtered money through to Dein for shares they initially joint-owned, and thereby built up his stake. If the shares transferred in 2009 were totally under Kroenke’s control, the indications are that Fiszman has total confidence in his colleague, stating that his “greater involvement will be in the best interests of everyone involved in the club”. It was a view backed up by Gazidis: “This is somebody [Kroenke] that shares the same philosophy as the [other members of the] current Board,” although he hinted that change might be in the air when he added, “and will be influential as we go forward”.

But only if Danny Fiszman permits it? Previously, despite owning only a quarter of the club, the pride of place held by the stadium project presented Fiszman with a whip hand, which on occasion he deployed resolutely. After Geoffrey Klass had been instrumental in bringing in Antony Spencer and Fiszman understood the prospects for the site, Klass was brusquely told “Thank you Geoffrey, but you are no longer involved,” presumably because of his friendship with David Dein. Dein’s opposition to Ashburton Grove was an irreducible black mark in Fiszman’s book, and apparently so was Lady Nina’s wish for more involvement (from day one she felt she had never been made welcome, tolerated rather than embraced). So it augured well for the stability of the club that at this point in 2009 the two directors with the largest shareholding appeared to be acting in tandem regarding how the club should be run.

Pointedly, before the deal with Fiszman, Kroenke had been picking up odd shares on the open market (which he belatedly disclosed, presumably initially unaware that the Stock Exchange had to be informed). At the time there was uncertainty as to whether he had ambitions to strengthen his hand in the hope of one day taking control himself or that he felt the club represented a good investment which he could recoup with interest in the event of a future takeover bid. The reasoning became much clearer in April, a month after the exchange with Fiszman, when it was announced that Kroenke had bought out the Carr family’s shares at between £8,500 and £10,500 per share, the higher price reflecting the inherent power attached to them. The purchase from a combination of Richard Carr, Lady Sarah Phipps-Bagge and Clive Carr raised the American’s share of the club to 28.3 per cent. As with the transfer of shares from Fiszman, no money actually changed hands at the time. Kroenke and Fiszman now had an amalgamated holding of over 44 per cent, so that even if Alisher Usmanov’s Red and White Holdings attempted to combine with the other disaffected shareholder, Lady Nina Bracewell-Smith, they could now only muster 41 per cent. The prospect of overthrowing the board was killed stone dead by the deal. The Carrs had shown fidelity to the existing hierarchy, leaving Lady Nina and Usmanov – even if they did want to combine forces – effectively powerless in spite of the size of their respective holdings.

Kroenke and Fiszman had cleverly managed the situation whereby they could ensure the board retained control without either man being forced to make a mandatory takeover bid that a 30 per cent stake would entail. The takeover panel at the Stock Exchange were asked to investigate the notion that the pair were acting in concert to the detriment of other shareholders and should be forced to bid for the entire company, with the payoff that both Usmanov and Lady Nina would then be able to cash in their chips at £10,500 a share (the highest price paid for a share in the previous 12 months, which any takeover buyer would be obliged to pay under Stock Exchange rules). By reason of acquiring the Carrs’ shares, Kroenke became the main man at the club and there was speculation amongst knowledgeable outsiders that this was the intended outcome ever since talks began about inviting him onto the board. Although no one would confess to such Machiavellian planning, the pieces of the jigsaw fell into place and completed a picture (with the happy co-incidence of Ivan Gazidis as the new CEO) that left two very substantial shareholders – Alisher Usmanov and Lady Nina Bracewell-Smith – on the outside looking in.

Having originally been welcomed to the inner sanctum so that the powers that be could keep an eye on her, if the intention all along was for Kroenke to control a dominant stake, Lady Nina had become expendable, as long as the cooperation of the Carr family was maintained. Richard Carr’s departure from the board when Lady Nina was forced out may have led her to believe he was unhappy with events and would remain loyal to her. Anything but. On learning the Carrs had sold out, she felt betrayed. “I had no idea they were going to do this,” she revealed. “And they’ve still got all their seats in the directors’ box, whilst I have nothing.” The Carrs played the game and played it well, both cashing in and retaining their matchday privileges. If Lady Nina had accepted that she was fighting a battle she could not win, then she too could have remained a luminary.

The bottom line is that she was never taken credibly as a director but was endured as long as it suited. She was justified though in her acrimonious feelings. She had remained faithful to the Carrs and the board by refusing to sell to both Kroenke and Usmanov. Two years after rejecting the American, the tables were turned and no loyalty had been shown in return. Once her stake was the key to who held power. Now it only had a cash value. She felt she had been “deserted” by her husband’s family, who sold out to make Stan Kroenke the key man at Arsenal.

Danny Fiszman’s own position remained unbreachable. The 16 per cent he retained ensured he would remain as influential as he needed to be. He had replaced Lady Nina in holding the key to power, as his alliance with Kroenke determined the club’s future. The only way Kroenke could act without Fiszman’s blessing was to make a takeover bid himself. Why bother if the two men were comfortable with each other? The irony was that Fiszman was effectively handing the reins over to a man who had been brought into the fold by David Dein. So much had changed in two years.

Kroenke may have been encouraged in his actions by the interim accounts for the six months to 30th November 2008 that the club had released a few weeks before the transfer of a third of Fiszman’s shares. They demonstrated a sustained growth in a difficult climate even though most of the revenue had been attained before the recession really began to bite. Turnover increased by 10 per cent to over £98 million as a result of more matchdays and higher ticket prices for season 2008/09 and higher broadcast fees including a beneficial €/£ exchange rate on Champions League income. Football operating profits (before debt service costs) also rose as Arsène Wenger’s expertise in player trading again proved very profitable. Sales of Alex Hleb to Barcelona and Justin Hoyte to Middlesbrough as well as sell-on fees for players who had previously left the club and been subsequently transferred again, such as David Bentley who moved from Blackburn to Tottenham, netted Arsenal several million pounds.

Football costs – primarily the players’ salaries – are exorbitant, perhaps surprisingly so considering the ages of so many in the first team squad, although with a wages-to-turnover ratio of around 50 per cent (way below the Premier League average of 62 per cent) are perfectly manageable as long as Arsenal continue to play before a sell-out crowd and qualify for the Champions League (the penalty for failing to do so could amount to as much as £40 million from lost broadcast and matchday revenue) as they have done for the past 11 years. The demand for season tickets and premium seats (boxes, Diamond Club and Club Level) will be severely tested prior to the 2009/10 season, despite renewal prices being the same as 12 months ago, after another year without a trophy. Any fall-off from the premium sector (box holders and Club Level season ticket holders) will be particularly painful as it rivals the Champions League as a revenue stream. Now the veracity of the waiting lists – over 40,000 for ordinary season tickets according to the club in 2008 – will be exposed.

Rather than loan out a quarter of the playing staff with a short-term cost saving as a result, perhaps it should be trimmed permanently. Certainly UEFA feels it is unreasonable to have over 50 players on the books, when 25 can cope with a season-long Champions League campaign. Because of the squad size and with player wages rising faster than club income (wages in the Premier League exceeded £1 billion for the first time in 2007/08), it is revealing that the bill is now 50 per cent higher than the last time Arsenal won a trophy. And then Arsenal had the quality of the likes of Henry, Vieira, Pires, Campbell, Bergkamp and Ljungberg in the ranks.

Whilst not reflecting what David Dein termed “the black hole that is Highbury Square”, Dein’s assertion that the club ‘should have stuck to what they know’ (ie football matters), whilst made with the benefit of hindsight, rings true. The construction of the Highbury Square apartments continued apace and in the autumn of 2008 over 90 per cent were ready for completion to buyers who had already parted with deposits of 10 per cent. However, the mortgage market had collapsed. Many were unable to find a lender in order to complete their purchase and some were actually pulling out and forfeiting their deposits rather than completing, so dramatically had the housing market changed. By the end of November 2008, 595 of the 680 units had been sold, but only 186 were fully paid up. Arsenal had a £140 million loan taken out to construct the flats, due for repayment by April 2010. At least any future building costs were covered so each completed sale went towards reducing the outstanding debt. Unfortunately, they just weren’t happening quickly enough.

So naturally the club sought to extend their credit facility. However, the cost of buying some breathing space and time for the property market to recover would be further interest charges, putting extra pressure on the manager and players to achieve success. The bottom line was that around a further 340 of the 409 pre-sold units would need to be completed before any profit would be seen. And there wasn’t much interest in the 85 that were still unreserved at the asking prices. Anyone who could actually manage to find a mortgage might be better off buying one of the myriad other properties in the area that appeared to offer better value.

Peter Hill-Wood could not foresee a prosperous outcome to the situation, admitting, “I said a year ago if we made a profit from the property side it would be a bonus. Many people I suspect will find that some of their financial projections have not quite worked out in the way they thought they would and we’re certainly one of those.” He continued, “The property side would be much more fun if it was working well. It’s annoying. It’s a wonderful development and it’ll sell like crazy one day, but we’re in 2009. It’s tough and we’re selling a few flats. It would have been very nice to have extra profit there but we’re not going to have that. It’s not something that impacts on the running of the football club at all which we’ve stressed many times.” But generating extra cash for the football club now appears a distant proposition. Certainly the chairman’s statement of 2008 that a revenue of circa £350 million (and a profit of perhaps £100 million) could be expected now appears wildly optimistic. “Sitting here today if we had sold the whole bloody thing three or four years ago and taken a one-off payment of X million that would look very clever. When we decided not to do that we looked at all the downsides other than the current downside – which has taken not only us but everybody else by surprise.”

The conversion of the club’s old home into funding a nest egg had been eagerly anticipated by Arsène Wenger. Talking about the debts Arsenal were facing in 2007, he said, “I believe that we will see the difference after the end of the 2008/09 season. We will have much greater resources at our disposal.’ As the economy suffered, David Dein fervently believed Highbury Square was having a more adverse effect than Wenger himself would ever admit and believed money was being taken out of the football budget for property. “Arsène had £18 million to spend on players in the summer of 2008. By January, that had dwindled to £12 million, due to the property,” he confided to a friend. “We need quality reinforcements, but where is the money going to come from? The cupboard is bare and Arsène is running out of hats and rabbits.”

Having deleted any mention of Ashburton Grove from all of the club’s communications, how ironic that the property development company (Ashburton Properties) should be named after the street where their new stadium was constructed, although it had been wiped off the face of the earth. Further, at the same time it was airbrushed out of Arsenal’s recent history, in much the same way as a certain David Dein. Dein remained in constant contact with Wenger, even after his departure from Red and White effectively made him just another Arsenal fan, albeit a very wealthy one. But he had no right to feelings of resentment as his own role in bringing about the dilemmas the club now had to face up to (which ultimately affected his friend Arsène Wenger) could not be denied.