Bracewell’s error: will Arsenal be like manciteh now?

Just when everyone was settled into a quiet week before the Derby, Lady Bracewell-Smith spiced things up. Not only is she looking to sell, but she might be looking to sell to an outsider. It was no accident she made this announcement today or contracted with Blackstone to advise her. The Lady made a strategic move to undermine Kroenke in order to keep the status quo. But she may have caused more harm and threatened the future of our Club.

Bracewell made her announcement today on purpose: to coincide with Kroenke’s deadline to make a decisions about his ownership stake of the Rams. Kroenke has to decide by today whether to keep his ownership stake in the St. Louis Rams for sell his 40%. That’s $300m in funny money up in the air based on this decision. By waiting until today, however, Bracewell potentially undermined all of the preparation he has put into place to use those funds for Arsenal.


Well, Kroenke is also waiting for May 1st; the earliest point at which he can purchase shares at the cheaper cost. Bracewell’s move, however, alters the financial playing field. If shares start to fly around at £10k and for some reason Kroenke needs to make a move to protect his stake before May 1st, this resets the cheaper stock buy out date from May 1, 2010, to April, 2011. As a result, the Club remains in the status quo, i.e. no clear owner, for at least another year. Well played Bracewell.

This is good for Bracewell, that is, if she wants to keep everything the same for a year. But it’s bad for us (fans) because it keeps things off balance for yet another year. In addition, her move might force Kroenke or Usmanov to act before they are ready. And, her move might increase the cost of the Club to a ridiculous amount, at least in this global market. Think of it this way, either Kroenke or Usmanov will have to pay out around £1 billion (around £700bn for the shares + £300m in debt) in addition to any money to invest in the Club (transfer fees). This price destroys Arsenal’s key value of having a working business model. Sure someone can come in and pay the money, but after investing £1bn it’s gone, finished, fin, terminar; we’d be no better than manciteh. Another crown jewel for the fantastically wealthy.

This is where Blackwell’s plan might backfire. Kroenke, Usmanov or someone else might call her bluff. And this is what I’m worried about. If Usmanov wanted a chance to make his move, Blackwell just gave it to him. Put it this way, if someone out there is willing to pony up £1bn and act like chelsea or manciteh, Arsenal is now on the block. And don’t be fooled, if there are individuals and groups out there willing to throw £1.2bn at manu, don’t think they won’t look at Arsenal for 20% less. Arsenal are the Kings of London. London! We have a huge growth potential, we haven’t even begun to grow in the States yet. So if one of the world’s deep pockets gets a sparkle in his eye, he might take this chance to swoop in. Kroenke, businessman that he is, might just cash in and take a handsome profit for his 29.9% if he can get £10k per share. Will this happen? I don’t know, but I don’t even like the possibility of it happening.

So thank you Bracewell, for giving us something to post about. But no thanks for the uncertainty.

-the student


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