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Arsenal pull plug on share issue as they look to build from within
Ben Hunt8 Jul 2009
Arsenal have decided against a proposed rights issue which would have generated almost £150million for the club from their shareholders.
Alisher Usmanov, Arsenal's second biggest stakeholder, had suggested the plan as a way of raising money to either pay off debt or invest in players.
Danny Fiszman, 16 per cent shareholder, and Stan Kroenke, who owns a 28 per cent stake, met last week to discuss the plan with the club's financial advisor, Rothschild.
However, they have decided against the rights issue, with chief executive Ivan Gazidis saying the club could cope with their debt, which stands at around £400m and is mainly down to the building of Emirates Stadium.
Gazidis said: “The board, with its financial advisor Rothschild, considered thoroughly the proposal to use permanent equity capital to either pay down debt or to add to the club's spending in the transfer market.
“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.”
Gazidis said because Arsene Wenger would not pay over-inflated prices for players, there was no need to raise cash for transfers through a rights issue.
This summer, Arsenal have only bought defender Thomas Vermaelen from Ajax for £10m, although Robin van Persie did today agree a new deal with the Gunners.
Gazidis said: “With regard to players, the board decided not to issue permanent capital in the hopes of signing one or two players in an inflated transfer market.
“Instead, the focus continues to be on securing the services of talented young players we have on long-term contracts and making very selective acquisitions, only where a new signing will add real value to our already strong squad.
“We have developed some of the best young players in the world, as they showed by advancing to the last four in the Champions League.
“Simply spending money in the transfer market does not make a team or guarantee success.”
That shrewd approach has worked with Van Persie, who cost £2.75m from Feyenoord in 2004. Since then, he has played 177 games and scored 63 goals — including 20 last season to finish as the club's top goal-scorer.
Van Persie is believed to have agreed a four-year deal worth £70,000 per week, which ends months of speculation about his future. However, the Holland international says he never had any doubts about not extending his stay at Emirates Stadium.
He said: “I'm so happy to have signed a new long-term contract. I've been at the club for five years now and there really is a great feeling here.
“We have a top-class manager, a squad full of superb young players, a world-class stadium and brilliant supporters. Arsenal have a very bright future and I want to be part of it.
“My heart is with Arsenal and I just can't picture myself in a different shirt. I just can't see it now because I love this club so much.
“If you look at the last five years, look at the steps I have made every season, if you look at the support the boss and the whole club gave me, the fans gave me, my team mates gave me — this is the right decision.”
Van Persie's deal is another boost for Wenger, who has already seen Cesc Fabregas distance himself from a move to Real Madrid.
The manager said: “Robin is a hugely gifted player and has the talent and goalscoring ability to win matches at the very top level. We have already seen many times what Robin is capable of on a football pitch but, at only 25, there is still much more to come from him. Robin has the potential to become a true Arsenal great.”
Wenger has already moved to tie up the long-term futures of youngsters Jack Wilshere, Aaron Ramsey and Kieran Gibbs this summer, while Gazidis believes next season looks bright for Arsenal.
He said: “There are plenty of reasons to look forward to next season with optimism. Our young players have some high-level experience under their belts and they will be one year older and better, mentally and physically.
“They will learn the lessons from last season and will be better players next year as a result. They are ready for the challenge.”
Reader views (9)
What we need actually is midfield defender like MELO because he is someone who got a lot of caracteres and determination- sort of Vieira- As striker iam positive Chamakh will be good enough to help us with eduardo and rosiscky to win the premiere league..just little bit more patience and 2009-2010 will be ours .
- Dessack, mitcham, surrey, 15/07/2009 01:05
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I like arsenal so much, as a fan i want the management to add some exprience players to the club so that we can have enough bench. I am happy with manager and players. I think we should maintain our spending too much signings is not too much trophies.
- Amaechi S Ibe, Kaduna Nigeria, 14/07/2009 16:56
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I think Arsenal should have took the money, that way they may have even been able to stop fleeseing their fans at the turnstile
- Rob East Stand Lower, London, 09/07/2009 12:43
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I commend the management at Arsenal for the great decision not to accept the offer. It will open up rooms for unwanted interference with the way the manager manages the team. We alsready have a good business module that works perfectly well - bringing up young players. To be honest the 'young' players are not phased by the task before them. All that is required is buy some few expereinced players but, not at the price that is beign floated around!
- Jayt, Watford, UK, 09/07/2009 12:24
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With a fully fit team we can go places. Let us hope that Rosicky, Fabregas and Eduardo do not suffer any further injury and the team continues to impress in the season ahead.
- Gooner In Spain, Pego, Spain, 09/07/2009 08:20
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I have been a Gunners fan ever since 1958, I am 67 years young I will always be a GUNNERS FAN, Just as the saying goes MONEY CANNOT BUY LOVE, the same applies to sports, you can spend all the money in the world, buying the best players money can buy, I am afraid that does not mean that you will win all competitions if any, you face. Yes I am for winning with style ( that is what all fans pay good money to see)That is why fans all over the soccer world LOVES watching ARSENAL play.I am all for bringing our young players through and at the same time keep Arsenal as one of the world successful club.
- La. Big Al, Los Angeles California USA., 09/07/2009 04:35
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Arsenal will continue to do well by any objective standard, what they will not do is win trophies. The shareholders are very happy, the players are well paid, Wenger is respected but the fans will have to settle for thrashing the likes of Hull, being thrashed by the top 3 and struggling to come 4th. Oh and we fans will also have to go on paying through the nose for seats in a great stadium.
- Up The Arse, Highbury, 08/07/2009 23:40
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Arsenal are a superb example of how to run a football club. The debt incurred was to build a state of the art stadium, financed by the increased income derived from it & associated projects. The more successful clubs in terms of trophies tend to be hugely in debt, with Real Madrid an absurd example of how not to run a club. Although I would dearly love to see Arsenal win trophies, I derive extreme pleasure from watching the way the club has progressed through building amazing training facillities, stadium & bringing through young players at a relatively low cost, who either make it into the 1st team or can be sold on profitably to other clubs.
- Rob Gooner, North London, 08/07/2009 15:08
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I have been an Arsenal supported since 1967 and have never been more happy to support the club. The youth policy, the style of play, the magnificent stadium and the management's refusal to take on debt to buy short-term success are all sources of immense pride. Last season may not have produced a trophy (for the men at least) but it was still successful, with the Gunners going to the wire in all major competitions. Sure I would like to win something soon, but I - and many like me are prepared to wait. While never in the 'dirty Leeds' category, we had many years of winning badly. Winning with style and elan with young players is worth waiting for.
- Nick, Eye, Suffolk, 08/07/2009 14:48
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