Oil and water

It’s a sad reflection on the modern game that football owners, chairmen, chief executives and managing directors now attract as many column inches as the clubs and players they represent.

Gone are the days when the only time business impinged on what is still (lest we forget) a sport was in the area of transfer fees and player contracts. But in the last few years, the back pages have feasted on:
- Tales of financial mismanagement, most notably Leeds United)
- Foreign takeovers: the Glazers at Man U, Abramovich at Chelsea, Ivanov at Hearts, not to mention Liverpool, Portsmouth and several others
- Image rights (obviously, Brand Beckham springs readily to mind)
- Turnover and profit, with one often being confused with the other. Even the BBC mistakenly reported Arsenal’s recent £200m-plus turnover as ‘income’ (which is actually profit) – a bit like a doctor looking at an x-ray of your hand and telling a patient he has a broken metatarsal

And then, of course, there is the ongoing saga of Russian billionaire Alisher Usmanov and his attempt to buy Arsenal.

Let’s start with the facts. Usmanov has raised his stake in the club to 23%. The board effectively controls around 51% of the shares, and has made a ‘lock-down’ agreement which effectively prevents any of them selling up before April 2008.

Usmanov has talked about establishing a ‘blocking stake’ of 25%. This would allow him to block any special resolutions or changes to the club’s articles of association – in effect, to stop the board changing the club’s constitution – but in reality he would be unable to exert any influence over the day-to-day running of Arsenal. So 25% is not that significant a milestone in terms of his ability to launch a hostile takeover.

The next key stepping stone is 30%. At this point, City rules state he would be obliged to launch a takeover bid. But even that should be a formality in the current situation, as the board control a majority of the shares and so would be able to resist (if they chose to do so).

The magic number for Usmanov is 50% (technically, 50% plus one share). At this point, he would own a majority share in the club, be able to appoint a representative to the board, and effectively control the club.

Whether this would be a good thing or not is a matter for debate. Roman Abramovich’s money has helped bring star players and trophies to Chelsea, but has left many fans disillusioned, particularly after the events of the past two weeks. The Glazers’ takeover of Man U has not brought about the end of the world in the short-term, although doubts remain over the club’s heavy debt burden. Nikloai Ivanov at Hearts? An owner who wants to pick the team, a revolving door of new managers, captain sold for daring to speak his mind, and a team which is neither better nor more successful than before.

And yet … Alexandre Gaydamark has clearly had a positive effect on Portsmouth. Taksin Shinawat’s financial and political record may be dodgy, but his cash has certainly fuelled Man City’s revival this season. And while Randy Lerner’s money has not totally transformed Aston Villa yet, they are clearly heading in the right direction.

Anyhow.

It seems clear that, despite Usmanov’s posturing and charm offensive over the past couple of days, nothing much is going to happen until next April – at least. As a first step, he will almost certainly have to reach some kind of agreement with the American Stan Kroenke (remember him?), who owns 12% of the club. And then he will have to persuade one or more of the major shareholders on the board to cash in – by no means an easy feat.

I guess that probably still leaves things as clear as mud, but the fact is it’s not an easy thing to get your head around as a fan – largely because the murky world of business and financial markets never is easy.

Now I work in the business world (and so have a fair understanding of what is going on) and I love sport, but to the idealist in me they are and should always be two separate things, like oil and water. The fact that these two worlds now collide so regularly – and that football is now as much of a business as it is a sport – breaks my heart.