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Alarm bells sounding for Everton

Everton
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Boardroom blitz

If fans thought Arsenal's season had been a tale of uncertainty on the pitch it is nothing compared to the evermore mysterious manoeuvrings of the club's major shareholders. Historically regarded as one of the most serenely stable of all clubs, Arsenal's future remains shrouded in doubt as two powerful blocks have emerged over the last two years and have now positioned themselves in something akin to a Mexican stand-off seemingly waiting for the other to twitch. Arsenal have looked vulnerable ever since David Dein quit as vice-chairman in 2007 after reaching an impasse with the rest of the board over how to fund the club and how to remain competitive as foreign billionaires started taking an interest in football; and in-so-doing moved the goalposts of football finance. Dein argued that the club should accept investment from overseas in order to keep pace with the money being spent by their domestic rivals, most notably Chelsea. When Dein left Arsenal he walked straight into the arms of Russian billionaire Alisher Usmanov and exchanged his 14.65% holding in the club for around £75m and the chairmanship of Red and White Holdings - the consortium run by Usmanov and his business partner Farhad Moshiri - which now controls the Russian's stake in Arsenal. Earlier this week Red and White increased its stake in Arsenal to more than 25%, cementing Usmanov's position as the club's largest single shareholder and giving him a crucial tactical position with the ability to block resolutions which he disagrees with. With more than 25% in the club Usmanov can now check any board resolutions that need approval of 75% of shares. The question is: what does Usmanov plan to do next? Well, if he wants take the club over he must first increase his stake above the 29.9% mark which would trigger a mandatory takeover offer; a tipping point which also applies to any other interested party. It could be, therefore, that Usmanov is trying to force the man he regards as his key rival, US sports entrepreneur Stan Kroenke, into showing his hand. Or it could be that as an investor he is trying to bump-up his holding to maximise his earnings when an investor, Kroenke or otherwise, comes to buy the club. Crucial to Arsenal's future could be the 15.9% in Arsenal held by Lady Nina Bracewell-Smith. As a member of the club's board she was bound by a lockdown agreement which meant that she was unable to sell her stake until April and even then was required to offer first refusal to other board members. But having quit the board in December after a row with the other members, she is free to sell her stake, valued is excess of £50m, to whomever she sees fit. Bracewell-Smith's departure was a seriously destabilising development as it meant the board no longer held a majority of the club's shares therefore leaving Arsenal vulnerable to a takeover.

Who owns what at Arsenal

• Alisher Usmanov - 25%
• Danny Fiszman - 24.11%
• Others - 17.49%
• Lady Bracewell-Smith - 15.9%
• Stan Kroenke - 12.4%
• Richard Carr - 4.4%
• Peter Hill-Wood - 0.8%

Arsenal's eight-man board holds 41.80% of shares, with only Danny Fiszman (24.11%) and Stan Kroenke (12.19%) in possession of significant stakes. In April, Fiszman, who made his fortune in the diamond dealing business, would be able to sell part, or all, of his stake to fellow board member Kroenke thereby allowing the US investor to trigger a takeover for the club and in so doing outmanoeuvre Usmanov. But if Usmanov, or perhaps more pertinently, Dein, can reach an accord with Bracewell-Smith, Red and White could head Kroenke off at the pass. Adding further intrigue to a complex situation is the very real possibility that a clash of personalities could yet play a role. For the incumbent board Usmanov represents Dein, and his position is that of persona non grata for his readiness to accept foreign investment and for effectively creating the current situation. But having been ousted after an argument does Bracewell-Smith still share the same antipathy toward Dein as her former boardroom allies? This must all leave new Arsenal chief executive Ivan Gazidis' head spinning. Earlier this month the former Major League Soccer deputy commissioner said that many of the practises and dealings which are commonplace in English football would not be allowed in American sports. He wasn't referring to club ownership at the time but the power plays and political machinations at play seem to fit neatly into his interpretation that certain aspects of football are akin to a saloon in the Wild West.
Another week, another update on Chelsea and the financial health of Roman Abramovich, and the latest reports make uncomfortable reading for the Russian. In the vast majority of recent pictures Abramovich has looked more than a little crestfallen, understandable given that Russian business magazine Finans reported this week that his assets have lost £6.3bn as a result of the current economic downturn. It is an extraordinary amount to see wiped off the books, but before you start a whip-round for the former darling of the oligarch-class, it is worth pointing out that according to Finans Abramovich still has a personal worth of £9.3bn. Despite having abandoned the era-defining spending which marked Abramovich's early days at Chelsea, the club insist their owner's personal finances have no bearing over their decision to alter transfer policy to sell before you buy stance. This week, interim boss Guus Hiddink watched as Chelsea's reserves, featuring several promising youngsters, demolished Portsmouth 6-0. It could be telling that following the game Hiddink said he would be prepared to give youth a chance; perhaps to add value to the asking price of young prospects as much as to augment his starting XI. The club's most recent financial figures, first delayed and then published as planned last Friday, revealed a drop in losses to £66m (including payoffs to former bosses Jose Mourinho and Avram Grant) and that Abramovich has pumped around £709m into the club since taking over in 2003. Chelsea were at a pains to counter recent speculation over Abramovich's long-term commitment to the club and stressed the significance of his move to converting debt to equity more than half of his investment (the cost of Abramovich's bankrolling of the club now breaks down as £369.9m of equity and the remaining £339.8m as an interest-free loan). Regardless of how his investment is divided and logged in Chelsea's books, if Abramovich wanted to quit the club, whether his stake is purely equity or loan or a combination of the two, the only sticking point would be trying to find a buyer with the wherewithal to ensure he could sell-up without losing money.

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