The founding principles of the AST are set out in detail on our website (www.arsenaltrust.org) and in our constitution, but as times change and different challenges arise for the club and supporters it is important to update and amend the policy aims and objectives of the Trust.
In Autumn 2018 the AST Board reviewed its activities following the full takeover of Arsenal by Kroenke Sports & Entertainment (KSE) and produced this updated document. It builds on feedback received in members’ meetings and from surveys we undertake. We welcome further feedback from members at any time to [email protected]
The following are the specific priorities of the AST Board for 2019:
In summary, we will:
We will maintain the reserves accrued from the forced sale of the AST shareholding for the eventual use of reinvesting in Arsenal shares. This could arise as a result of a future sale or listing of Arsenal, or through legislative changes made by Parliament.
The Arsenal Supporters' Trust was founded in 2003. Our objectives were to:
From inception, the AST strove to develop and maintain a strong working relationship with the club as part of our commitment to raise the profile and understanding of financial and ownership issues, and promote the interests of supporter-shareholders. This relationship was established with the Arsenal Board while Keith Edelman was CEO, and continued through the early years of Ivan Gazidis in that role. This led to co-operation on the establishment of Fanshare (see below) and other changes to benefit supporters, such as the introduction of the ‘Young Guns’ enclosure and greater transparency on the club’s cash position. However, in recent years the club has responded to valid criticisms of such things as Board diversity, corporate governance issues and how the AGM is run, by reducing AST access to Arsenal directors and executives. We are working to reverse this for the benefit of members and all supporters, without sacrificing the principles on which the AST was founded.
The AST established Arsenal Fanshare, a scheme designed to allow more supporters a chance to own a share in Arsenal. Over 2,000 supporters were members of Arsenal Fanshare, which, at its peak, owned 116 Arsenal shares, making it the third largest shareholder at that time. Sadly, the scheme had to close when the market for Arsenal shares became less liquid following large-scale buying by Alisher Usmanov and Stan Kroenke. At the same time Arsenal withdrew financial support for the scheme following Stan Kroenke’s takeover. In 2014 the Board members of the Arsenal Fanshare Scheme took the difficult decision to close the scheme down. A full explanation of the reasons for this are set out here: http://www.arsenalfanshare.com/.
In mid-2018 the AST had around 1,000 paying members, many of whom were individual shareholders in Arsenal. Approximately three per cent of the club's equity was still owned by small shareholders. The AST itself owned six shares in Arsenal.
Then on August 7, 2018 KSE announced they had agreement to buy the shareholding of Red & White Holdings and their intention to force a squeeze out of all remaining shareholders.
When the AST was founded in 2003, Arsenal's Board and major shareholders were part of a plural ownership structure that took a custodianship approach, with all profits ploughed back in to the club. All of the major shareholders and Board members were lifelong Arsenal fans, with three generations of Hill-Woods and Bracewell-Smiths serving as chairmen and/or Board members. The Board largely worked together to do what was right for the club and monies raised by Arsenal were reinvested to make the club stronger.
As well as the larger shareholders on the Board, there were a couple of thousand smaller shareholders who held around ten per cent of the shares. The Arsenal Board had to answer to all shareholders, up to a point, with important accountability and transparency occurring through the publication of the Company Report & Accounts and the holding of an Annual General Meeting to which all shareholders were invited.
In 2011 Stan Kroenke, through KSE, became majority owner of Arsenal, eventually building a stake of 67 per cent. The other Board members sold all their shares to him and ceased to represent any equity interests. Now he has increased his holding to 100 per cent and Arsenal Holdings PLC is wholly owned by KSE (UK). He has taken out of loan of £557m which is secured against KSE’s assets.
To date Stan Kroenke has maintained a very low profile as owner and, despite promises to do so, has not met with the AST or any other supporters’ group since becoming majority owner in 2011.
The AST continues to believe that Arsenal is too important to be owned by any one person. The best ownership model for Arsenal will always include supporters being represented and involved in the ownership structure as shareholders.
We believe that ideally at least ten per cent of Arsenal shares should be in the hands of small shareholders and/or supporters' groups. There should also be supporter representation on the club Board and/or much more structured relationships with the owners and directors. This would allow interested supporters to have an appropriate voice, the opportunity to be engaged and to feel that they belong to the club. This still occurs at other leading European clubs such as Barcelona and it is integral to the German ownership model.
The AST supports Arsenal being run as a sustainable business and does not support the creation of a business model that places the future of the club at risk by exposing it to excessive levels of debt.
The AST was wholly against the takeover by Stan Kroenke and is concerned at the possibility of the acquisition debt of over £500m being placed against Arsenal and the potential use the club's income to service this debt, as has happened at Manchester United (and Liverpool under Hicks and Gillett). We want to see profits made at Arsenal reinvested into the club and we do not support dividend payments or excessive management salaries or consultancy fees as ways of extracting money from the club.
The AST intends to seek dialogue with the club Board and Chief Executive on ownership subjects, and we will continue to monitor the governance arrangements of the Club and its financial arrangements although it must be noted that the recent structural changes mean that there will be longer an AGM and reduced financial reporting. This includes reports being filed just once not twice a year and probably later in the financial cycle.
A long-term view should always be taken with regard to football results and the club's performance; we do not believe that reacting to individual events such as losing any single match is the best way. It is not current AST policy to make specific criticism on the football personnel of the club, particularly during the season. However, we are ultimately answerable to our membership on policy and will always represent members' views to the best of our ability.