by Alex Fynn
To put it mildly, Arsène Wenger was not happy at losing his pal and closest ally on the board. However, by the time Hill-Wood went to see him at the training ground the next morning, he had – after discussing the situation with Dein – decided to stay. Nevetheless, asked how Wenger took the news of his friend’s sacking, Hill-Wood recalls, “Not very well. I didn’t expect him to. I know perfectly well he’s friendly with David and still is.” (Indeed, the two remain in constant touch and have occasionally been spotted together with their wives enjoying a meal in a local restaurant.) The chairman believes the manager wanted to stay because “he enjoys what he’s doing”. Ken Friar was detailed to take over Dein’s work on contract and transfer negotiations and prepared himself for a busy summer ahead.
Some months after his departure, Dein was “still feeling the pain”. Anger had replaced grief as the predominant emotion. He felt that he was the victim of a personal vendetta. “They [the board] were jealous of my profile.” And he could have added influence at the top tables. When he was replaced by Keith Edelman as Arsenal’s representative on G14, the members were disappointed to lose such a knowledgeable administrator. The Arsenal board, Dein felt, were out of touch and not acting in the club’s best interests. He cited a regional Premier League meeting at which no Arsenal representative had bothered to attend. Additionally, no-one took the plane to Switzerland for UEFA Club Forum meetings at which a number of other English clubs were present. Even Peter Kenyon of Chelsea, his long-time adversary, expressed astonishment at what he took to be Arsenal’s new non-interventionist policy.
Admitting sorely missing “the buzz of being in the inner circle” (with club, country, UEFA and FIFA) Dein began to carve out a new role for himself as a speaker on the football conference circuit, his opinions on the state of the game still carrying enough gravitas for him to be much in demand. He was also sought after by his former competitors who, having enjoyed jousting with him across boardrooms and Premier League meetings, felt his experience would be an invaluable asset to their clubs. However as a one-club man, whilst flattered by the offers, he rejected top management roles at Newcastle, Everton and Barcelona.
He was determined to keep his own counsel. He recalled the dignified way the actress Koo Stark back in the 1980s refused all temptation and pressure to kiss and tell about her escapade with Prince Andrew. He was going to keep his powder dry until the opportunity arose to respond to what he called his “brutal sacking”. In the meantime, he contented himself with justifying what Stan Kroenke could have brought to the party. “All the very wealthy football investors I’ve met are in it for the sport,” he claims. “They want some fun out of it. They’re not looking for a return on their investment. OK, they don’t want to lose anything, they have put in good money, but, invariably, it represents only a very small part of their overall wealth. It is a passion investment. They could put the money in the bank but that would be boring.” It was a view that wouldn’t be shared by everyone at Old Trafford.
Despite Dein’s exit, the Kroenke story wouldn’t go away and the furore was such that Peter Hill-Wood wrote to all shareholders reassuring them about the board’s resolve to resist any takeover. And, exceptionally, the reclusive Danny Fiszman went public for the first time anyone could remember, agreeing to an interview for Sky Sports News. He was adamant that the club was not for sale. “We are open to anything that will improve the club but it’s going to be very, very difficult to explain to me and to the rest of board how you can actually make substantial investment – which would be another £400 million, £500 million, £600 million – and not expect a return for that. If it’s just an eight to 10 per cent return, you’re talking about £50 million or so. That’s got to come out of the club, otherwise there’s no point making a purchase. I don’t know how they’re going to be able to improve the finances of the club at that sort of amount.” And anyway as long as the directors remained united, a takeover would be impossible. “The board has 45.5 per cent of the shares. We also obviously have friends which takes us over 50 per cent. They [Kroenke/Dein] can mount a hostile bid but they’re never going to gain control. The future of the club is in the hands of the board.” To prevent further speculation, this stance was confirmed by the entire board signing a lockdown agreement for 12 months, which meant they could not sell any shares until April 2008 at the earliest.
Around this time the Arsenal Supporters’ Trust (AST) emerged as a key opinion-former on the ownership issue. Formed in 2003 to bring together the smaller shareholders under one umbrella, the AST’s board represented its members in discussions with the Arsenal board and other significant shareholders. Comprising a number of highly qualified professionals from the banking, legal and PR industries, they could talk to the directors on equal terms about the minutiae of Arsenal’s business and quickly won the respect of all those who dealt with them. They discovered that following the share issue to Granada in 2005, one authorised share was left unissued due to a mathematical error. Dubbed the ‘orphan share’, the AST ran a successful campaign to persuade the club to donate the share to them for safekeeping. They also secured the club’s backing (and promised financial assistance) to start up a sharesave scheme to allow supporters to contribute towards the eventual purchase of shares in the club. When the AST launched its own website, they contacted the club to have a link posted on arsenal.com. The result was an immediate placing at the very top of the list of Fanzone entries on the site’s homepage, even above links to the club’s own pages for its recognised roster of supporters’ clubs and the Junior Gunners. There was no doubt they were the board’s favoured sons in the fan fraternity (which included the Arsenal Independent Supporters’ Association (AISA) and REDaction). Further, the media recognised them as a reliable source on how the rank and file viewed proceedings. Prepared to talk to all parties, the AST kept in touch with David Dein, cognizant of his con siderable stake, and kept an open mind as to the benefits of greater involvement from Stan Kroenke (but were always consistent in saying they would not support a debt-laden or hostile takeover).
Publicly, Kroenke never commented on his association with Dein. He had probably expected him to obtain Lady Nina’s shareholding in the light of paying top dollar for ITV’s 9.99 per cent. After that failed, short of selling up himself, all he could do was to bide his time and ensure his investment was in safe hands. Visiting the UK in October 2007 on the occasion of an NFL match at Wembley between the New York Giants and the Miami Dolphins, ‘Silent Stan’ (as he is known due to his public reticence) was asked about his relationship with the Arsenal board. “It’s a partnership at the moment,” he responded. “Everybody has a tendency to speed up but actually these things take a lot of time and a lot of effort and many years to develop. We tend to look in the long term. If you are an investor in a sports team and you don’t look long term you are probably not a good investor. This is a strategic investment for us.” He sounded a lot more cautious than the type of big spender David Dein had in mind.
Presumably Dein had also come to this conclusion and on 30th August 2007 he emerged from his Totteridge bunker and announced, at a specially convened press conference, that he had sold his shares to Red and White Holdings Ltd, a company specifically formed to acquire shares in Arsenal by Moscow-based billionaire Alisher Usmanov and his right-hand man Farhad Moshiri. Part of the deal, which paid Dein the handsome sum of £75 million for his shares, was that he was installed as the new company’s chairman. Presumably if Usmanov was ultimately successful in securing control of Arsenal, Dein would be back in the saddle again.
A statement issued at the press conference to announce the purchase of the former vice-chairman’s shares indicated that Red and White Holdings intended “to approach the board of Arsenal in the near future to discuss its ideas, to understand the future direction of Arsenal and to explore areas of potential cooperation.” It followed up with the assertion (reiterating Dein’s long-held conviction) that “Red and White believes that in order to remain competitive a
t the top level of the game, Arsenal will require access to significant funding.” The speculation that Red and White were interested in a takeover was supported by Farhad Moshiri commenting that “we look forward to increasing our stake”. And there was no hanging about as, within a month, they had raised their stake from Dein’s 14 per cent to 23 per cent, putting themselves well on the way to overtaking Danny Fiszman as the largest shareholder. Immediately the share price rocketed to £10,000 as Red and White bought out some prominent smaller shareholders such as the hedge fund Lansdowne Holdings and Birol Nadir, son of the Polly Peck tycoon Asil Nadir.
Dein now felt able to return to watch his team from the comfort of Usmanov’s box. He had retained his paid-for season tickets in the Club and upper levels and made them available to friends and family but for the first time in years there was no reserved parking space. He had to leave his car in a school car park and walk the few hundred yards to the ground, rather than use the parking space under the stadium reserved for the boxholder.
However, mixing with the hoi polloi showed Dein he had a lot of personal support. Walking from his parked car to the stadium for the Saturday afternoon game against Birmingham in January 2008 he passed the Tollington pub on the Hornsey Road, which had fans packed outside in a pavement terrace area. A friend who was accompanying him, anticipating potential ill feeling, dropped back a couple of paces. Over his shoulder Dein shouted to him, “You think they’re going to throw their beer over me, don’t you?” “Yep,” replied his friend who was dumbfounded to find that they greeted him like a long lost son. Lads leaned over the railing to shake his hand. “When are you coming back?” they asked. “I’m here, aren’t I?” he responded. Outside the stadium he was stopped for photos and autographs, asked the same question and gave the same answer. In spite of some negative press in internet blogs and fanzines and a large banner created by the REDaction group to relay the message that Usmanov was not wanted, there were no catcalls and abuse for Dein, nothing in fact to warrant him needing the kind of minders a Russian magnate wouldn’t dream of leaving the house without.
Arsène Wenger was circumspect about the predatory share-buying of the company that had installed his friend as chairman, adamant that he had no intention of getting involved in the boardroom politics of the ownership issue. However, he did admit, “I’m concerned with the intent of people coming in”, although he distanced himself by stating, “What is happening up there [in the boardroom] is nothing to do with me. I’m not a shareholder and I don’t want to be involved in a strategic struggle for shares because, basically, it’s not my problem. Self-sufficiency should be any club’s target. You cannot have a policy at the club that, every year, somebody puts £50 million or £100 million in. Prices are rising but will people continue to pump in £40 million, £50 million or £100 million every year without any natural resources or dividends paid back? I’m not convinced. You have to work with a club’s natural resources.”
The manager with the degree in economics had previously expressed a distaste for the exorbitant spending that other clubs practised, and Dein’s reasoning behind bringing Usmanov to the party was not going to change that view. “Am I concerned that major foreign investment might affect the way we work here?” said Wenger. “Yes. There are many ways to work in the game. You can say you don’t want any youth development at all and I’ll respect that. If there are good players on the market, you go for them. But we’ve gone for a different solution and that’s what we want to continue to do. We go this way. I feel we are strong enough to compete and that’s what I want to show.” Defiantly, he emphasised, “If I wanted to buy a player today I have money available, it’s not a problem.” The company books, however, suggested that in fact he didn’t quite have a blank chequebook.
Wenger’s transfer and wages budget was later described by Ken Friar as being a case not so much of the manager saying “I need this much” but more asking “How much have I got?” Was it significant that Theo Walcott did not appear for the first team between joining from Southampton in January 2006 and the end of that season, before being selected for England’s World Cup squad? Although he made the bench on occasion, the suspicion was that if he’d actually trod the turf in Arsenal colours, an immediate further instalment on his transfer fee to his former club would have been activated. At a time when every penny was being counted, perhaps the decision was taken to give him first-team experience purely from the perspective of a non-playing substitute.
Now Wenger was in a situation where he could concentrate on developing younger players without any internal pressure to buy more established names. There was simply no choice. So he accepted it willingly, and got on with the job he loved. It was certainly a different position to the one Dein had taken up on his behalf. However, Wenger had been content to work without any cash and then when given some, he didn’t necessarily spend it. Nevertheless, Dein’s position was that he needed “bags more”, and quickly. Not so long ago Dein and Wenger were, in Dein’s words, “a team”. Peter Hill-Wood had been asked “Have you ever known David Dein to disagree with Arsène Wenger?” “Never”, he shot back. Perhaps Dein felt he had been given the licence to act as Wenger’s agent provocateur. More likely, as with so many self-made millionaire businessmen, Dein trusted his own judgment implicitly and found it difficult to veer away from his predetermined course of action.
If the situation regarding Stan Kroenke a few short months earlier had been unnerving, then the new threat to their position had the board reaching for their tin hats as shares were being hoovered up by Red and White at a rate of knots. Contrary to the view of many who regarded David Dein as no longer having any influence, the former vice-chairman believed he held an even stronger hand than hitherto. He could now wield Red and White’s shareholding which was much larger than his former stake. There were even mischievous rumours that, to demonstrate his resurrection, he might turn up at the club’s AGM in October 2007, although they proved inaccurate. It was just as well, as he would not have enjoyed hearing the board give the strongest indication yet that they would be around for the long haul with the announcement of an extension to their ‘lockdown agreement’, which was greeted by spontaneous applause from the large gathering of several hundred shareholders (more than anyone can ever remember seeing at an AGM). Under the new agreement, none of the directors’ shares could be sold until 2009, and even then, only to family members or fellow directors. In 2010, if there is unanimous agreement, then shares can be disposed of, but failing this, no one can sell until 2012. Keith Edelman later triumphantly claimed the pact made the board “bulletproof”. The edict sent a message out that the status quo would remain. (By 2010, the Highbury Square residential development is due to be complete, a decent chunk of the outstanding debt should have been paid off and the future should look much rosier. The value of the club might actually be greatly enhanced and the board members might be able to cash in if there is any inclination to sell.)
Despite the backslapping, there were still unresolved issues regarding the future. The Hill-Wood and Bracewell-Smith families may have had three generations on the board over the years but none of the offspring of the current directors are being groomed for succession. Despite Danny Fiszman, the board’s major shareholder, having five grown-up children, there is currently no sign that any of them are ever likely to be involved in establishing a third Arsenal family dynasty. Further, with the majority of the board in their seventies, their ownership of the club could soon be subject to last wills and testaments, worth tens of millions of pounds in the cases of Danny Fiszman and Lady Nina. Peter Hill-Wood revealed that discussions had taken place about the years ahead. Asked whether the board might bring in someone who would be around in 20 years’ time, Hill-Wood replied, “When you say the board is not youthful, they are very experienced.” When put to him that this was not necessarily true in terms of marketing or television rights, he responded, “But do we realise that the world is changing? Indeed we do. If the perfect answer is a 40-
year-old from Google or something, we’d be very happy. We’re not ex cluding them but we certainly look at it and we all know that we’re unfortunately getting older.” Equally unfortunately, inaction was speaking so much louder than wishful thinking. However, the growing relationship with the AST indicated that the directors were beginning to widen their horizons.
The board donated use of the Diamond Club suite for the AST’s annual Christmas drinks do, held in conjunction with AISA. Four of the directors – Danny Fiszman, Keith Edelman, Ken Friar and Sir Chips Keswick – attended. Obviously there was no compulsion to do so, but a board meeting had been held at Highbury House earlier, so it was convenient for some of those attending to pop along and show their faces. The first drinks were on the AST, but Danny Fiszman appeared somewhat taken aback at being asked for £3 when he subsequently ordered a Coke at the bar. Possibly never having had to buy a drink at the stadium before, his grasp on the club’s finances may not have extended to the mundane matters that affect the rank-and-file. When questioned about the events of recent months off the field, Fiszman responded, pointing towards the pitch, “I haven’t given up six years of my life to make this happen only to walk away from it now.”
Fiszman spoke of the stress of being responsible for the well-being of the club, in that so many people cared so deeply about it and thus were reliant on him “to get the stadium right without endangering the club. It’s one thing if by failing you suffer yourself,” he explained, “but it’s different when there are so many people relying on you.” If the remarks were reassuring, the motive may not have been entirely without self-interest, but it suited all concerned to take it at face value for the time being. Fiszman told senior members of the AST he would in future be spending more time on club matters, having understandably taken something of a back seat after the extraordinary commitment he had displayed in getting the stadium up and running. Despite the message, some observers still believe he might contemplate selling up when the time is right as long as it does not entail the Red and White Holdings chairman replacing him.