Kroenke has an eye for valuable real estate, both literally and figuratively.
Billions of dollars of Kroenke’s wealth is held in physical infrastructure on both sides of the Atlantic.
The Emirates Stadium, acres of commercial and residential property in his native Denver, a £500m ranch in Texas, LA’s iconic SoFi Stadium – the list goes on and on.
But when he first bought into Arsenal in 2007 and increased his stake over the next 11 years, it wasn’t because of what they owned in bricks, mortar or even the intangible value of physical assets like players.
Arsenal have always been a stylish, community-rooted club and their move into the streetwear market in collaboration with Adidas and local designers Labrum and Aries shows KSE leveraging on that.
British Vogue even ran an article on ‘how Arsenal became fashion’s favourite football club’ in November last year.
Their history and heritage is another major selling point, allowing them to flog merchandise based on the badge and its association with success alone – and not just in North London, the UK, or even Europe.
Arsenal are huge in the most populous football-mad markets like Indonesia and Nigeria, while the data suggests they are easily the most popular Premier League club in North and East Africa.
They’ve capitalised on that through a £10m-a-year deal with Visit Rwanda, although it helps that the country’s autocratic president Paul Kagame is a genuine fan and regular in the Emirates’ posh seats.
Setting aside the pandemic era, Arsenal are on a six-year run of pre-season tours in America, which tells you all you need to know about their thoughts on the States as a ripe commercial market too.
This kind of marketing speak makes most bedrock supporters in North London queasy, true, but it is exactly how Kroenke Sports & Entertainment (KSE) think.
It is also why KSE, now publicly fronted by Josh Kroenke at Arsenal, think they can one day cash in for an enormous profit, having invested approximately £1bn to secure full ownership of the club.
In fact, they have lost £311m since 2017-18 which, significantly, was the first of a seven-season absence from the Champions League.
That goes to show that, despite all the commercial partnerships, merchandise sales and hospitality lounges that surround the Emirates Stadium, what happens on the green bit in the middle is still king.
Now, their renaissance on the pitch under Mikel Arteta is being reflected in the balance sheet. Could they finally sign that world-class striker as a result? More on that later.
Arsenal poised to reveal major financial boost
For years now, Arsenal have been the worst-performing side in the so-called Big Six in financial terms.
Their last set of published accounts details revenue of £464m, well behind the two Manchester clubs, Liverpool, Tottenham and Chelsea.
Annual revenue of Manchester City, Manchester United, Liverpool, Tottenham, Chelsea and Arsenal
When it comes to Arteta and his behind-the-scenes team’s ability to compete in the transfer market, that is a big problem.
Stan Kroenke wants his teams to be self-sufficient, with every penny spent accounted for elsewhere in the business.
Yes, he has deviated from this model a little in recent years with the aim of getting Arsenal back into the lucrative Champions League, but their modest revenue has manifestly anchored their spending.
For one, Kroenke needs to have the necessary liquidity – AKA how easily he can access cash – but that shouldn’t be an issue given his personal reserves and access to the best lines of credit.
However, the potential £500m redevelopment of the Emirates Stadium is on the horizon and macroeconomic conditions are unfavourable.
Three factors that mean KSE probably won’t alter the existing budgets for the time being?
Unfortunately for Arsenal fans and football staff alike desperate to see a big name arrive this January, it isn’t in the Kroenkes genes to make this sort of high-tariff move.
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