As the club released its financial figures for the year ended 31st May 2008 with pre tax profits up £10m they also announced that Stan Kroenke has joined the board as a non-executive director. Welcoming him to the board Chairman Peter Hill-Wood said “We are delighted to welcome Stan to the Board of Arsenal. He brings with him a wealth of experience through his direct involvement in sports clubs in the US and we expect to benefit from his commercial insights and knowledge.”
Kroenke is apparently not a party to the lock down agreement currently in place between the other shareholding directors, which runs until 2012. However in adding his 12.2% shareholding to that of the existing board it now means that the board represents almost 60% of the total shares issued, adding stability to board decisions.
Stan Kroenke said “It is a real honour to be invited to join the Board of Arsenal given its pre-eminent reputation and position in football world-wide. I hope that my background in sports management will be an asset to Arsenal in its commercial dealings going forward.”
The statement issued on the club`s website this morning included a statement indicating that Kroenke intends to increase, or at least reserve his right to increase his shareholding in the not too distant future implying that there maybe some movement in shareholdings somewhere on the horizon. The statement reads
Mr Kroenke, and any person who has acted in concert with him or any person who is subsequently acting in concert with him, reserves the right to increase his shareholding beyond 29.9% of Arsenal’s issued share capital within twelve months, and to take any other action which would otherwise be precluded under Rule 2.8 of The City Code on Takeovers and Mergers, with the agreement of the Board of Arsenal or following the announcement of an offer or possible offer for Arsenal or if there is a material change of circumstances. Mr. Kroenke is not a party to the lockdown agreement which was signed by the other directors of Arsenal in October 2007.
The financial results reveal that nett debt has increased by £50m but this increase is accounted for by some £70m of extra loans taken on to complete the Highbury Square development. The club has revealed that the first phase of 65 apartments completed in July, which will only show in the current year`s accounts produced sales proceeds of £18.7m. While the club anticipates a ‘significant level of property sales activity` in 2008/2009 it is also ‘mindful of the current conditions in the property and mortgage markets.`
The financial results also show that wages have increased by almost £12mn over the previous year to £101.3mn. This is apparently as a result of improvement in key player and management contracts. As well as new player contracts Wenger himself extended his own contract last year.
While matchday and broadcasting revenues increased retailing and commercial revenues showed minor upturns and it is this area, with licensing now being handled internally following the ending of an arrangement where this had previously been handled by ITV, that Kroenke`s expertise may help us develop over the coming years.
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