From Rhys Jaggar :
http://www.theguardian.com/football/2015/oct/15/arsenal-chairman-agm-fans-demand-answers-payment
Shareholders in attendance at the AGM repeatedly pressed for details of the payment but the ambiguous response from the club’s board prompted increasing frustration from supporters and disdain from the top table.
Sir Chips sought to explain the payment without giving insight into the specifics of the specialist advice Arsenal receive from KSE, saying: “I felt it was right to pay a fee for a wide range of services provided by KSE.
“We should not be in a position where we expect these things to come for nothing – that would not be good governance. I would remind you that KSE is one of the most respected sports organisations in the United States. This has contributed to our positive evolution in a number of areas. Finally, I’d remind everyone that we have a majority owner who is respectful of our traditions.”
That provoked heckling from shareholders who wanted to know exactly what services were part of this transaction. One of the questions from the floor summed up the mood of mistrust: “Is there a written contract or is it like Platini and Blatter’s verbal agreement?”
Sir Chips was noticably piqued as he responded: “I am not Mr Platini, I am not Mr Blatter, and there is not a written whatever-you-wanted because as I have explained, good advice is where you can get it and how you get it and if you get good advice then you succeed. If you don’t get the right advice, then you fail.
“You cannot codify how many times we have taken advice or how we have taken them. I will make no attempt to do so except to say we get the best advice as quick as we possibly can, and if you want proof of what that is worth, you can look at this [nodding to the FA Cup], look at that [the Community Shield], and look at our accounts.
“I don’t know how many of you here run your own businesses but those of you who do will know that the best advice you can get is the quick advice from people – and this is the point – in other organisations who know more about the problem than you do. If you are humble enough to accept that then you go and you get good advice. That is precisely what we do at the Arsenal with KSE.”
Let me make something abundantly clear: Arsenal absolutely delight in not paying for good advice. I can’t tell you the number of times I either comment to you, at Le Grove or elsewhere about something and, blow me down, days or a few weeks later, Arsenal are repeating things almost to a T.
They get orgasms when they take free advice. ORGASMS. Sir Chips is talking out of his backside….
The most interesting comment is the one about the ‘owner who understands the traditions of the Club’ i.e. that dividends haven’t been paid.
Enos Stanley Kroenke would like a £3m dividend (he’d probably prefer a £15m one but there we are) so he needs to find a way to extract one.
I don’t think KSE IS the most respected organisation in American sport. KSE’s franchises win almost nothing in America.
He’s a loser who creams in millions because US sport is a closed shop oligarchy where every franchise is guaranteed to make a profit, each and every season. However, its the parent organisation of the majority shareholder of Arsenal, so I guess Arsenal wouldn’t want to put his nose out of joint by going out to tender, would they? He might not sign a cheque to sign the next Alexis Sanchez if they did, might he??!!
I’m absolutely amazed that Arsenal don’t document what they get for KSE”s £3m.
It should be absolutely simple to do so. You open a file and each time the Board take advice on a matter, it is recorded on file as: ‘advice sought from KSE on XXXX. The value of the advice is considered to be YYYY, based on what it would cost to get that advice elsewhere’. If you’re a businessman, you’ll know what it costs or, if you don’t, you’ll find out jolly quickly.
I have to say that if the chairman of a company just about breaking even can hand over nearly 1% of annual revenues without documenting what he’s getting for his money, then he’s not a very professional businessman. If he gets four or five pieces of advice a year, whose net worth to Arsenal is genuinely £3m, then documenting it is a piece of the proverbial yellow river…….
So is it analytics? Is it construction advice? Is it facilities management? Is it drafting contracts? Is it management of liquid assets? Is it global travel arrangements?
It shouldn’t be too hard to document what it was and the track record of KSE in supplying such expertise in American sport, should it?
The fact that he hasn’t documented it, hasn’t even got a contract (which could be a draw-down contract based on ‘on demand consultancy on an as-needed basis’, which is one of the most basic used in consultancy businesses in the UK) does suggest that he doesn’t know the basics of running a public company.
Arsenal is after all listed and such activities should attract the attention of the auditors, since £3m bungs for uncontracted, unspecified services to parent companies is hardly the gold standard for transparent, professional, rigorous, audited business practice, is it?
Have to say that I cracked up laughing hearing the Arsenal Chairman being compared to Sepp Blatter and Kroenke being compared to Platini.
My view is that both Kroenke and Keswick are totally wet behind the ears. What you can do in a private company isn’t what you can do in a public one. And if they don’t know that, they shouldn’t be on the board of a public company.
Ah well, Arsene has stated that Arsenal will challenge for the title this year.
The injuries to Silva and Aguero were most timely for him, I must say. And those to Gomez and Ings. All he needs now are a couple for Utd and he’s laughing all the way to Betfair’s bank.
Let’s just hope that Coquelin, Walcott and Sanchez don’t get injured.
Myles says:
If a billionaire landowner-businessman is American, he won’t give free advice to a British football club he owns.
Not taking dividends is an alien concept to Stan and Yanks like him. It’s too foreign, not part of the capitalist system that’s in his blood. Yesterday’s protests will have left Stan shocked and bewildered.
His consolation is this: Arsene Wenger is still the perfect manager for my business model.