Arsenal Holdings PLC AGM held their annual general meeting on 22 October 2009.  402 people were in attendance including Arsenals largest shareholder, Stan Kroenke, who lived up to his Silent Stan nickname by declining all requests to discuss his intentions for the club and his shareholding. While disappointing for supporters and shareholders, this is understandable from a legal perspective. The AST will be talking to Mr Kroenkes representatives while he is in London. 

Arsne Wenger and Chief Executive Ivan Gazidis both spoke impressively and at length of their vision for the club. Arsnes 60th birthday was celebrated with a short film of his achievements and the award of a book of signed tributes from the meeting. Ivan talked about the commercial plans being put in place and said that the AST would be consultees for the process he was undertaking to renew the Arsenal vision and business strategy.

In light of the recently issued accounts, AST Board members put forward several questions on the finances of the club. As is usual at these events, little new was learnt. However, the AST remains in contact with all major shareholders and club executives, and much of our work is done behind the scenes. We firmly believe that backed by our members we can continue to represent the best interests of small shareholders and ultimately all supporters and fans of Arsenal.  

A full review of the AGM proceedings written by AST Board member Phil Wall follows:

On the podium were, from left to right as we viewed them, Arsne Wenger, Sir Chips Keswick, Stan Kroenke, Ivan Gazidis, Chairman Peter Hill-Wood (PH-W), Danny Fiszman, Lord Harris of Peckham and David Miles.

As usual, PH-W introduced proceedings and talked briefly about the accounts. Questions had been submitted in advance to allow answers to be prepared, and those on financial matters were now repeated from the floor by those whod submitted.

First up was Nigel Phillips of the AST. Nigels question in full was:

Almost 10 years ago Arsenal raised almost 80m by issuing new shares to ITV / Granada to fund the Club’s contribution to the new stadium project. In addition to this another 100m was invested in the project, much of which came from long term commercial deals that were substantially paid up front. As property profits are clearly not now available to the Club in the anticipated amounts what other financing options, including rights issues, have the club explored to replace the football revenues that have been invested as equity in this development?

The response from the podium, read out by PH-W, was that a rights issue this year had been considered carefully (it was not stated why it was rejected), and there were no plans for further capital raising.

The next question concerned the possibility of a shortfall in cash should Arsenal fail to qualify for the Champions League, now that rivals such as Villa and Spurs appear to be pushing us hard. PH-W responded that the club budgets for qualifying for the CL three seasons in four, but (and this is where he got his first intentional laugh) he certainly didnt consider Spurs and Villa as rivals.

Next up was your author, whose question was:

Arsenal have fallen well behind competitors in the income generated from commercial sponsorship, as recent deals at Liverpool and Man Utd show. While the long-term nature of some deals is understood, what are the clubs plans for bridging the widening cash shortfall as a result of these deals?

The response was that Ivan and his team have scrutinised these deals carefully, but a contract is a contract and they will be respected. However, IG and his team are working hard to expand revenues.

Question four wondered why Directors shareholdings are no longer disclosed in the Annual Report. IG responded that this ceased to be a legal requirement in 2006, but it is in any case public knowledge, and all changes in Directors shareholdings are announced by Plus Markets. 

AST secretary Steve Cooper then asked:

Over the last five seasons Arsenal have operated on a net nil transfer spend and now appears to be in net funds after the sales of Toure and Adebayor this summer. Whilst it is clear that squad investment in wages has been significant why is this the case when football revenues generated by the club increase season by season?

PH-Ws response was that the question was incorrect, and in fact 150m has been spent on transfers in the last five years, with 90m recouped. (I would suggest the club may have mixed up some figures here, because this does not seem correct. Perhaps the Adebayor and Toure sales have not been included?) However, Arsne is keen to maintain stability and improve players contracts when they deserve it, so there is spending but it will never be reckless.

The financial questions ended there, and we moved on to the standard resolutions to approve the accounts, reappoint various directors and pay the auditors (joke here from PH-W that theyre overpaid, but asking us to approve the resolution anyway).

Next up, and 20 minutes into the meeting, was Ivan Gazidis, who spoke for seven minutes. IG is an impressive speaker and in that time he emphasised Arsenals unique history, potential global reach, the Arsenal community, talked about the recent signings and the players signed on longer contracts, then moved on to what the club is doing for us, the supporters: ticket prices have been frozen, the continuing Arsenalisation of the stadium and the Highbury Shrine to be opened shortly. He mentioned the four new members of his management team for day to day operations, and the need to pause, plan properly and look forward while retaining the core values. Arsenal is a community of shared emotions and values, he said. The soundbite of his speech was that it was most desirable to build success than buy it.

A series of more general pre-submitted questions followed: 

Why is there no reduction in prices for OAPs?

PH-W: Its not commercially acceptable. IG added more diplomatically that the Family Enclosure now held 5,000, compared to the maximum of 2,500 at Highbury, and the question had actually been specifically about Club Level, where the many corporate tickets made it impossible to police who should be given concessions.

Can we buy another centre-back, please?

PH-W: They dont grow on trees! There were personal thanks for the clubs charity work from a lady who knew a young man who had benefitted. PH-W noted the increasing contribution of the manager and players to the clubs charitable efforts, and thanked the back room staff at the club who worked on community initiatives.

What is the clubs digital strategy? IG talked about brand development and the key role of the digital strategy and ATV online.

A very long (some would say rambling) question followed, which took in the great Brazil and Holland teams of the past, how Brazil managed to play lovely football on hard dry pitches, water spraying up these days when players hit the deck, how often the pitch at Highbury was watered, and so on. In summary, why is the pitch watered so much? Answer: the manager wants it to be. Next.

AST Board member Tim Payton rose to say:

It is encouraging to read that the CEO is developing a vision and comprehensive plan for the next phase of the club’s development, the AST believes this must reflect  the values of custodianship and plurality. Will all stakeholders including the Arsenal Supporters Trust have an opportunity to provide input into this plan? What is the timescale for this work and will it be shared once it has been completed?

IG was happy to confirm that the AST will have a role, and he couldnt see how any such plan would work without the involvement of supporter groups.

Two less serious questions, from the twelve and seven year old sons of a shareholder:

What is the furthest distance a season ticket holder travels to matches? PH-W responded that there were some in Australia and New Zealand, but he wasnt aware how often they turned up though he hoped they would renew next season., and

Does Gunnersaurus visit schools and travel around? 

PH-W again: he does get out into the community sometimes. As for travel . . . (at this point one of his fellow Board members made a sotto voce comment to PH-W) . . . hes apparently been to Chernobyl. Hence his colour, clearly. Whether the joke was apparent to all on the podium is not known.

What are Stan Kroenkes intentions?

PH-Ws answer can be summed up as, Thats not for me to say. He added, I can be indiscreet. Lawyers have urged me to keep my mouth shut! The questioner responded that Mr Kroenke himself might like to say. Mr Kroenke, for obvious legal reasons, declined to do so.

Which of the current shareholders is the best custodian for Arsenal?

PH-W said that all were valued and “I don’t think we are looking for a change of custodian. The club is in pretty good hands. With your support we would like to think we would continue that way.”

(There was no sign of the ‘valued’ second largest shareholder at the meeting although his lawyers and PR advisors were patrolling the room).   

What recognition can we give Arsne, who is now our longest serving manager?

PH-W recognised AWs achievements and on prompting from Danny Fiszman joked that perhaps hed sign a new contract.

Why was a commercial sponsor used in the stadium name, as fans dont want to see the name changed every time the sponsor changes?

PH-W said that he believed fans have got used to the name and the name wont be changing in my lifetime.

Why has the second kit been changed to blue, when it has been yellow for 40 years? (This is clearly factually incorrect at one stage in the 80s it was blue and green, and other blue kits have followed, particularly in the O₂ years.) IG responded that some things were non-negotiable, but others including second kits have to be part of a commercial strategy. He has to respect the traditions of the club, but kits, which he referred to as uniforms, are part of the strategic review.

The questions ended there, and a five minute film of Arsnes achievements as Arsenal manager was shown, followed by the presentation of a book that shareholders had been invited to sign earlier as a birthday present to the manager.

AW then spoke, and included the following points:

         The club is special, and thats why he is loyal to it

         Last season was perhaps not so bad two semi-finals, a 21-match unbeaten run (the longest in England) and qualification for the CL for the twelfth year in a row, a feat matched only by Man Utd and Real Madrid. This is surely proof that money isnt everything.

         He believes we will win a trophy this year, and When I say that, it is not to please you, it is because I am really convinced of it.

         Its important for players to grow up in the club, from 16 or 17 or even before.

He then said he would answer questions, but not if they are disrespectful to individual players. A set of unscripted questions from the floor followed, and I paraphrase his answers:

Would you prefer to win the CL or the PL? We want to win both, but it is most important to still be fighting for the league at the end of the season, unlike last year.

How does football stamp out the disgraceful chants you have been subjected to? Perhaps by identifying culprits on CCTV and banning them.

To embrace globalisation would you go on a pre-season tour to the Far East or the US?  No it doesnt prepare the players properly, its not possible to take players who are just back from World Cups or European Championships, and the CL qualifiers might be vital to the season. Also the Emirates Cup is provided as an alternative.

Were conceding too many goals; what can we do? The start of last season was bad, but we improved and are still improving. We have an attacking philosophy and that can leave holes.

Do we have a keeper good enough to help us win trophies? Yes (but he didnt say which one). Keepers suffer a lot of negative stress because only their mistakes are examined, and even the best keepers make mistakes.

At this point, after an hour and a quarter, PH-W rose again to close proceedings.

AW graciously stayed on the podium to sign anything that any shareholder or fan cared to put in front of him. SK was also happy to make small talk with all except the media, who were directed to his spokesman. However, he did say he would probably be in London for the December Board meeting that precedes the AST Christmas Drinks in the Diamond Club so, as last year, AST members may well get a chance to meet Mr Kroenke personally before the year is out.