Arsenal Club Finances
Arsenal beat Sporting Lisbon 5-1 in the Champions League, Photo, https://www.freemalaysiatoday.com/category/sports/2024/11/29/arteta-says-arsenal-must-be-near-perfect-to-catch-liverpool/
Arsenal Financial Structure and Ownership over Time
Sir Henry Norris' Scruples Lead to a New Era of Arsenal
A yearning for financial stability and the opportunity to compete with the best clubs in the world while remaining fiscally conservative are central themes embedded in Arsenal’s identity and ownership philosophy. This tradition started with Sir Henry Norris, who may have taken this yearning too far, too quickly. Sir Henry Norris’s under-the-table dealings ultimately culminated in the successful poaching of Herbert Chapman, who many considered to be the best manager in the world at Huddersfield Town, for a record £2,000 (£155,000 today) per season salary plus tempting perks.
Norris then restricted Chapman’s requests to add depth to the roster, and the wheels started coming off the bus. William Hall, the director and other co-owner along with Norris, discovered that Norris had illegally cashed a check forged with Chapman’s signature to buy the team’s reserve bus. This was compounded by other extravagant discretionary purchases like cigars, alcohol, dinners, and
cars with Arsenal’s accounts.
Hall requested that Norris resign, and in response Norris filed suite and requested a League Committee investigation into Hall.27 Hall then went above the League, instead petitioning the Football Association (FA) to examine Arsenal’s finances. The FA ultimately
charged Sir Henry Norris with illegal payments spanning over eight years and banned him from
football for life on August 29th, 1927.
Norris’s ban from the League left Arsenal with burning uestions surrounding leadership and the direction of the club.
Sources:
“The Rise and Fall of Sir Henry Norris – Part 2,” Breaking the Lines, September 2, 2023 (accessed March 2, 2025)
The Glory Years: Smith and Hill-Woods Family Ownership
Thankfully, an existing director since 1918, Major Sir Samuel Hill-Wood, took over as Chairman and, together with Herbert Chapman, gave the club the direction it desperately needed.
By the outbreak of World War II, the majority of Arsenal’s shares were owned by wealthy football enthusiasts and politicians Samuel Hill-Wood and Sir Bracewell-Smith, who both spent time on Arsenal’s board and saw the share purchases as a “charitable exercise” in order for the working people of North London to have recreational past-times.
Sir Bracewell Smith was an MP for Holborn and later the mayor of London, who made his fortune in the property and hotel development business. Hill-Wood was an MP for High Peak and had previously chaired and owned Glossop North End F.C., funding it with over £30,000 personally.
There was no dividend and therefore ownership inherently meant patronage of a club with deeply entrenched fiscal austerity. Upon Hill-Woods and Bracewell-Smith’s deaths, the majority of Arsenal’s shares and therefore custodianship was passed down to their respective children and grandchildren, remaining in the hands of these two families until fairly recently.
Sources:
“Custodianship at Arsenal,” Arsenal Supporters Trust, https://archive.arsenaltrust.org/activity/custodianship-at-arsenal.html,
(Accessed February 27th, 2025).
Shifting Leadership: Commercializing Arsenal through Dein and Kroenke
In 1983, sugar trader and English businessman David Dein bought 16% of Arsenal for £292,000 from the Hill-Woods family. Peter Hill-Woods, the Chairman at the time, remarked: “I think he’s crazy. To all intents and purposes, it’s dead money.”This reaction perfectly encapsulates how dire the situation was for funding soccer clubs at the time--only foreign billionaires in the form of vanity projects could make the financial commitment to buy a soccer club, as it simply burned through cash.
European football hence felt like a totally unsustainable business model, wearing down on the ownership’s family through constant obligatory capital injections until the money dried up and new foreign investors were willing to come take the shares off their hands.
The families that owned Arsenal for generations were finally throwing in the towel, just as other multi-generational family-owned clubs in Europe started selling out to foreign billionaires in the 1980s, 1990s, and early 2000s.
Arsenal was also at a low point and needed new ideas from an outsider like Dein, providing him with the opportunity to buy chunks of Arsenal at an attractively low valuation. Dein was able to profit off of this transaction in multiple ways—he used his position as Vice President of Arsenal to catapult into several of the most influential roles of soccer politics around the world (councillor
and then vice-chairman of FA, chairman of the G14, and co-founder of the Premier League in 1992).
Dein also introduced Arsene Wenger to the club, which allowed him to fundamentally revolutionize the commercialization of the sport as Arsenal’s play started to improve.
By helping form the Premier League, Dein was able to make soccer ownership immensely more profitable through massive TV deals, higher match-day revenues through re-branding, international expansion, and pushing a model that replicates American football (going to a match should be treated as a daytrip for the whole family).
Over time, as English football embraced a more global marketplace, additional pressure was applied to Arsenal’s ownership model as foreign ownership in the Premier League became the norm, not the exception. The flurry of foreign investment in the Premier League had the effect of rendering clubs uncompetitive without significant recurring investment in player recruitment.
Meanwhile, the ‘Arsenal bonds’ issued to pay for the new Emirates stadium in 2006 left Arsenal with a crippling debt burden and subsequent cuts to player wages. In an effort to push for foreign cash,
Dein argued that “without new investors, [I fear] Arsenal might very soon not be able to compete successfully at the very top level,”
and ultimately sold 14.5% of his stake to a Russian billionaire, Alisher Usmanov.
This triggered a bidding war between Usmanov and American Stan Kroenke for majority ownership of Arsenal, both of whom had been gradually accumulating shares. Stan Kroenke ultimately won, completing a full takeover in 2018 through his business Kroenke Sports and Entertainment.
While some fans welcomed the prospect of robust financial backing, others questioned whether distant ownership might erode the familial, local, and communal character that traditionally underpinned Arsenal’s identity.
A group of local consolidated shareholders that used to own ~5% of Arsenal through the “Arsenal Fanshare” scheme. This scheme "gave more local supporters a chance to own part of Arsenal. 2,000 supporters invested £2 million to become members and buy 125 shares, making Arsenal Fanshare the third biggest shareholder in the club.” The Hill-Woods family collaborated with local ownership trusts like this, but Kroenke has apparently not been willing to since buying the team.
Because of Kroenke's unwillingness to work with local fan ownership schemes, local support groups like the Arsenal Supporters Trust have made the difficult decision to shut down (largely because of lack of liquidity in the share market with Stan Kroenke’s “land grab for ownership." The AST shut-down during the 2015-16 season.
Kroenke has essentially removed any opposition from the board and has made it clear it's "his way or the highway," prompting speculation from fans around his motives with the team.
One potential clue exists when we explore what made Kroenke a billionaire in the first place: American broadcasting and sports entertainment company Kroenke Sports, the entity which technically controls Stan Kroenke's ownership interest in Arsenal. While capitalizing on broadcast revenues may be the future of sustainable soccer economics, it also leaves financial incentives sometimes at conflict with what long-time fans desire.
Please let us know in the forum how you feel about Stan Kroenke's ownership since his take-over in 2018!
Sources:
- Kelso, Paul, “Market trader who sat at game’s topmost tables,” The Guardian,
https://www.theguardian.com/football/2007/apr/19/newsstory.sport7, April 19, 2007.
- Russian oil tycoon purchased Chelsea in 2003, American businessman Malcom Glazer purchased a majority stake in
Manchester United in 2005, and American entrepreneurs George Gillet and Tom Hicks purchased Liverpool in 2007
- Glover, John, “Arsenal out to win with bonds,” Business – International Herald Tribune,
https://www.nytimes.com/2006/07/07/business/worldbusiness/07iht-arsenal.2140466.html, July 7th, 2006.
- “Foreign Cash ‘can boost Arsenal,’” BBC News, http://news.bbc.co.uk/2/hi/business/6971124.stm, August 31st, 2007.
- Sky Sports News. “Usmanov Agrees to Sell Arsenal Shares to Kroenke.” August 7, 2018.
https://www.skysports.com/football/news/11670/11464775. Accessed March 1st, 2025.
Woolwich Arsenal Football and Athletic Company, Ltd. Stockholder Prospectus, dated 1910, and the Woolwich Arsenal Ownership Split as of April 1913 (The Arsenal Collection)
Sir Henry Norris
From Left to Right: The Queen of England, Peter Hill-Woods (previous majority owner and Chairman for 35 years), and famed coach Arsene Wenger
Ownership Stakes in Arsenal, circa 2007 (Source: BBC Sports, August 2007).
Share certificate for Arsenal Holdings, PLC
Current Arsenal Owner Stan Kroenke