Annual General Meetings are not usually the most exciting affairs, regardless of whether they are for football clubs or any other type of organisation. However, corporate governance of a football club does have a rather direct relation to happenings on the pitch given enough time. Ask Blackburn Rovers’ fans.
Arsenal are currently doing rather well on the pitch and have recently obliterated their transfer record on one Mesut Özil. Wenger rather drily remarked during his speech that “You don’t need scouts to buy Özil, you just need money.” However, AGMs are the shareholders’ chance to ask questions around corporate governance and power always needs holding to account, whether the company is performing well or not.
Before I launch into the transcript, some ‘housekeeping’ for the purposes of this piece. It isn’t quite verbatim. Direct quotes will be shown in quotation marks, everything else will be paraphrased but faithfully so, or as faithfully as I possibly can (that stands up in court, right?) Treat this as a dispassionate account. I have taken a note of the names of the individuals that had questions answered, however I won’t name them here.
The inquisitors did not read their questions out themselves; instead they were displayed on plasma screens. As such it was difficult to note them 100% precisely. In case I have mis-phrased, misunderstood, misread or misheard a question, I wouldn’t want it published against an individual’s name here. If you had a question submitted and feel I misrepresented it, hit me up on Twitter @LittleDutchVA and I’ll be only too happy to edit.
Anyhow, this was Sir Chips Keswick’s first year as official MC. Beastie Boys’ fans will be disappointed to learn that he didn’t implore Stan Kroenke to “mix master, cut faster!” at any point. However, for fans of continuity, he does share the clipped, Etonian tones of his predecessor. He asked us to turn our mobile phones “awww” at the outset.
The meeting began with a nod to Sir Chips’ predecessor Mr. Peter Hill Wood, who retired from the role of chairman recently after 30 years as chairman, to which applause was generously apportioned. Sir Chips described Mr. Hill Wood as an “evolutionary, but quiet figure.” Sir Chips pre-emptively reported that questions had been submitted in advance but had not been “cherry picked.” He informed all present that the meeting would be split into two parts; the receipt of the accounts until 31st May 2013, and what he described as “the formal part of the meeting.” After which questions would follow.
Proceedings kicked off with a question relating to the accounts, specifically the acquisition of a U.S. Data Management company. Sir Chips went all 8 Mile and handed the floor to Ivan Gazidis who clarified that the club has a desire to lead in all fields. “We need to be the best in scouting, player development, athletic performance and analytics. Analytics makes decisions more robust.” He also pointed out that they can aid your assessment of your opponents. (Come on Ivan, everybody knows Arsene doesn’t analyse his opponents).
Gazidis went on to say that analytics are becoming increasingly sophisticated and the U.S. is leading the field in technology around analytics. He stressed that Arsenal have a close relationship with Kroenke’s other sports clubs in the states and they have been using them for some time. Gazidis went on to say that the board conducted a review of the field 2 years ago and it led them to the acquisition of this company. Ivan said that this acquisition would “keep the club at the cutting edge of sports analytics.” He also stressed that the company acquired is independent and not linked to Stan Kroenke or any other board member or shareholder.
Then came the boring, formal parts, where resolutions to receive the financial accounts, to reappoint Deloitte as company auditor until the next AGM and to authorise the reappointment of Ken Friar and Stan Kroenke (though some cheeky monkeys put their hands up to oppose his re-election, not enough for a majority though). Sir Chips then handed over to Stanley Kroenke to soothe our bugger lugs with his soft, American drawl.
Kroenke, like all good entertainers, opened with a (semi) quip, by thanking the shareholders for re-electing him in a vote that was “close to unanimous anyways” – a sideways nod to the pocket of renegade hands that opposed his reappointment. Kroenke said that he was “very pleased with the progress of the club … most importantly on the pitch.” He also emphasised that there are several areas that on pitch success is contingent on, such as commercial development, increasing revenue and the continuing payment of debts. “Nobody is happy until we win championships and trophies” was his closing line on that point.
Kroenke said that a few clubs had become available for his investment if he had been inclined before he plumped for Arsenal. He said that the reason he became interested in Arsenal was down to their “tradition and values” which he said were “tied up in the manager Arsene Wenger” who he believes shares the sporting values of KSE. When Arsenal shares became available therefore, his interest was immediately piqued. He then described it as “an honour” to introduce Arsene Wenger to the stand.
Wenger was his usual, affable self. He described it as always being a pleasure to meet with shareholders but that it was a “bigger pleasure when the team is doing well.” Arsene also thanked Peter Hill Wood, whom he described as “a symbol of Arsenal Football Club in his respect of traditional values, but forward thinking,” which he emphasised by quipping, “He appointed me! Which was brave and forward thinking.” He also paid tribute to Hill Wood’s “battling qualities”, before wishing well to Sir Chips Keswick.
Wenger began by reviewing the period since the last AGM on the pitch. He admitted that last season didn’t start well due largely to the loss of Robin van Persie which led to “lots of unrest and scepticism, we were destabilised.” Results were redressed in 2013 and anyone playing Arsene bingo will be delighted to hear that he directly attributed to the team’s “mental strength.” He admitted that it was a huge disappointment to go out of both domestic cups to lower division sides, but that was tempered by a strong finish to the season.
When pointing out that we’d only lost 1 of our last 26 league games, describing the game we did lose as “a revolution,” which he attributed to it being the first game of the season and also to our inactivity in the transfer market to that point. He diplomatically said that he “totally understood” that. For this season, he maintained that our target was to win the league, which it always is, but he hinted that that ambition was more realistic now that financial restrictions aren’t as pronounced.
Wenger outlined his 3 point plan for the club to progress. The first point was to “defend our style, philosophy and values” and to achieve that “the core of the team has to be developed inside the club,” he said big investments have been made in the youth set up to maintain that. He reeled off Szczesny, Gibbs, Gnabry, Chamberlain, Jenkinson, Wilshere and Ramsey as having made their Premier League debuts at Arsenal. He said that these players, “know our style of play and they give the team its values.”
The second point he described as being “down to our eyes.” Specifically, the quality of scouting and coaching and use of connections within the game. He used the examples of Laurent Koscielny and Olivier Giroud as having arrived with low profiles that have since blossomed into full internationals. The third part was to scout and buy recognised quality such as Mesut Özil. “You don’t need a scout to buy Mesut Özil!” He also told the audience that “I hope we have shown you we are not scared to spend.”
Arsene spoke a little about the landscape now and in the future in European football. Economically, “Europe is becoming poorer, Asia is becoming richer,” he said. Asia is investing its wealth in European football, which means that competition is broadening beyond Europe and coming from even more countries. “There used to be 4 or 5 clubs that could win the Champions League, now I could name ten because they have the budgets.” He stressed that the number of clubs with sizeable investment available is likely to increase.
He said that Arsenal’s ability to compete will depend mainly on the work done to develop from inside the club, after which we can “buy with numbers.” But buying in couldn’t be the main pivot of the plan because it’s not sustainable. He pointed out that Arsenal’s philosophy is well respected across Europe because of our values, because we give deserving young players a chance. “People love our club because of the way we try to play.”
He admitted that there were times last season when the Emirates didn’t feel like they had that belief in the team, but he was quick to qualify, saying, “I understand that. It is for us to give you belief, not for you to give to us.” Arsene was cautiously optimistic, saying Arsenal were in a good position but forewarning that the end of November would be when we’d see where the real strength lies in the league. He ended by saying, “I’m confident we’ll all be happy in May.” Sir Chips thanked him, before remarking that “your speeches are as fluent as your football.”
Then we came to the submitted questions. The first one simply asked what the long and short term ambitions of the club were. To which Sir Chips replied, “Relegation and liquidation, that’s why we’re appointing Harry Redknapp as new manager.” Of course he didn’t say that. He said that the clubs want “trophies, leagues, cups and pennants.” I think the latter are on sale in the club shop so that shouldn’t be too difficult. Honestly, has it taken 8 years to go to the Armoury and buy one?!
Chips said that the “club’s investment bears this out,” but stressed that “we’ll do this within our values and traditions.” As something of an afterthought he plugged the Arsenal Ladies who apparently won the “Intercontinental League Cup” (sic, it’s actually the “Continental Cup”) a fortnight ago. He also advised that people go to Borehamwood to support the girls “if you have nothing to do.”
At this point, Maria (she of “Come….On….You…..Gunneeeeeers!” fame) desperately tried to intervene to point out that the girls were actually playing at Borehamwood in a few hours. Sir Chips was not instantly receptive, pointing out that it wasn’t the yet the forum for un-vetted interventions. To his credit, in dealing with another question a few minutes later, Ivan guessed what Maria’s point was going to be and pointed out that the girls were playing at Borehamwood that afternoon and encouraged people to go along.
The second question concerned the AST’s recent report into the make up of the board and asked whether it ought to be refreshed to include a younger and more diverse presence. Sir Chips said he was still “getting to grips” with the board in his role as chairman and that he hoped to make the club successful and uphold its values. He responded to the question by pointing out that the board were surrounded by staff of “youth and vigour,” that worked towards the more experienced presence on the board. He said that the club would consider any changes when the time was right.
The next question asked whether shareholder engagement might be broadened to hold a random draw for a shareholder to use any unsold boxes on match-day. Sir Chips said indefinitely that it was not viable. “We use them shamelessly to promote the club to commercial interests” and that they were needed for that purpose.
There followed a question about rain coverage in the front rows at the Emirates. Gazidis fielded this one, confirming that the club were “working on roofing issues.” The roof does apparently cover the front row and beyond but wind patterns could alter the trajectory of rain and the only foolproof method of preventing that would be a full, closeable roof which would not be viable at this stage. Ivan quipped that “if it offers any comfort, Arsene and the players have the same issue down on the bench and Arsene has a significant disadvantage because the zipper on his coat doesn’t work.” BOOM BOOM!
The next question asked if the board appreciated that on field success drives commercial revenue and asked whether the board will make on field success their main priority with commercial revenues consequently taking care of themselves. Sir Chips described this as an “easy virtue, but like most easy virtues it’s hard to achieve.” He pointed out the need for commercial partners to support us precisely so that we can sign players such as Mesut Özil. The Emirates deal is worth £150m cash over 5 years according to Sir Keswick, which is “obviously great for the bank balance, which is close to my heart” but that more importantly, it aids success on the pitch. He said he was honoured that the Emirates continues to support Arsenal when other options are available.
Once again, the board were asked whether Stan Kroenke could confirm that he has no intention of extracting dividends from Arsenal. Chips said that Kroenke had never done so before in his other sports enterprises and had no immediate plans to do so now. This was grouped with a question from another shareholder asking if she was ever likely to get any dividends because “I don’t seem to have had any!” Keswick confirmed she was likely to be disappointed.
The next question was with regards to Fanshare, specifically whether Kroenke would commit to meet Fanshare members to explain his vision for Fanshare or to outline whether he was likely to support the scheme in his stewardship. Sir Chips said that he couldn’t preempt a meeting or promise that that could happen in the near future. Doubtless you’ll have seen some media coverage over the issue of Kroenke’s commitment to meet supporters’ groups in the last few days, the desire to do so, as I understand it, is tied up in the pursuit of clarity over Fanshare’s future.
Two questions were grouped together on ticket pricing, which Gazidis fielded. He pointed out the club’s need to balance competing demands to increase revenue and spend on the team so that it can compete but also to make tickets affordable. Gazidis took the opportunity to explain that general admission season tickets had only been raised twice in seven years and that the club continues to actively engage with supporters’ groups on ticketing initiatives which he grouped into three splinters. 1) On young fans. 2) On away ticketing and 3) on ticket exchange so that the Emirates can be full to capacity as often as possible.
For young fans, there has been the Young Guns scheme which has made £10 tickets available to teenagers. He said that the club had actively supported Premier League initiatives for cheaper away tickets, a commitment the club had made good on by offering a £2.50 discount on all away tickets in this season’s Premier League starting from 26th October. He said tickets for the upcoming Norwich game were available for as little as £26 and that prices for League Cup games continue to be available for £10, even for the upcoming visit of Chelsea in the competition.
Ivan said that “we are not where we want to be yet” on ticketing but that the club was visibly engaging with supporters’ on these issues and delivering schemes designed to ease the financial burden on match going fans. He said that this week the club has launched an improved ticket exchange system so tickets can be electronically transferred to family and friends, but promised that further discussions will take place with supporters’ groups.
Another two questions were grouped together about board engagement with supporters. Again, Gazidis fielded this. He started by saying that “Stan Kroenke has fulfilled commitments made in the takeover document and has met with supporters’ groups several times.” He continued that AGMs were the primary place for him to hear concerns and that Stan had attended the last 6 AGMs as well as this one. Gazidis emphasised that Kroenke had “conveyed his thoughts here every year and across several media interviews,” which he described as “unique” for any owner in the Premier League.
Gazidis explained that Kroenke instructs him and the board to meet with fan groups on a regular basis, even when times have been difficult. He alluded to a supporters’ Christmas drinks that he attended the day after the Bradford defeat. He said that he conducted Q & As with fan groups regularly which are filmed for Arsenal Media too, concluding that “I spend a lot of time with fan groups” in both public and private forums. “The credit for that engagement all goes to the board” and Ivan confirmed that he reports back on all of those meetings with the board.
Changing topic, the next question asked what efforts are being put into player development, given that no player has come through our academy into the first team since Jack Wilshere in 2008. Gazidis again fielded this one, stressing that the club had a “strong and brave” philosophy which sees Arsenal as a club recognised for giving good young players a chance. He reeled off the names of Szczesny, Gnabry, Zelalem and Chuba Akpom as players in or coming through to the first team.
Ivan alluded to a report that concluded that Arsenal produce more young players than any club in England. He said that Arsenal continue to invest in new staff at Academy level and that Arsenal’s academy achieved a Level 1 ranking in a Premier League report recently. Gazidis paid tribute to outgoing head of Youth Development Liam Brady, who will remain at the club in another role (unspecified) but that a new head of Youth Development would be appointed in due course.
A question was asked about steps Arsenal are taking to review the contract situation at the club. Gazidis said that this was an area they were “constantly reviewing.” He pointe dout that we’d signed Wilshere, Walcott, Ramsey, Gibbs, Jenkinson, Chamberlain and Koscielny to long term contracts, whilst Podolski, Cazorla, Giroud, Monreal, Flamini, Sanogo and Özil had been signed recently. The club are therefore in a “healthy position” with respect to the player pool. He again confirmed that the judgement on contracts is inextricably linked with Arsene’s judgement. “No club is perfect in this respect, but we have an outstanding record.” He said that the investment in analytics was further proof of their commitment to making these decisions even more robust.
Somebody asked whether it was appropriate to bid for Luis Suarez due to his, ahem, “disciplinary” troubles. Chips said he found it “invidious” to comment on individual players, but that any player Arsenal signed “must understand and adhere to our principles” pointing out that the club would not tolerate any less.
A question was submitted about transfers. It was long and I couldn’t read it properly and Sir Chips gave it short shrift, describing it as “a rather general mish-mash of what you read in the newspapers.” He said that the one thing the “reel of misinformation” over transfer reporting was useful for for Arsenal was to show that “we’re active and we’re always looking.” He said that he was “very happy with our acquisitions” emphasising the plural.
The final pre submitted question asked how rigorously Arsene Wenger was held to account by the board of directors. Sir Chips said that the board were “happy with the way Arsene operates and with the input he gets from his staff.” Elucidating that Arsene “operates with high skill and high intensity.” Chips said that, in any case, “We would never engage in public disharmony- which to me means fisticuffs.”
That concluded the submitted questions. At this point, Chips invited people in the audience to put their hands up and approach the microphone , which Sir Chips emphasised should only be addressed to him and no other board member.
The first gentleman asked whether Arsenal regretted not engaging with NBC’s visible advertising of their Premier League rights deal this summer, when Tottenham so visibly did in New York. Gazidis answered by admitting that it was a “significant development” that NBC were involved with the Premier League, which the club welcomed. Gazidis said he and Kroenke have close relationships with NBC. Gazidis said that he was “aware of the Gareth Bale poster all over Time Square. But he doesn’t play for Tottenham anymore. Now he plays for one of our rivals.” Can I get a “SLAM DUNK TO IVAN!” up in here?
The question was then asked as to why Alisher Usmanov was not involved with the board and whether there were plans to involve him. Sir Chips gave this question a rather caustic response, “I won’t discuss who should and shouldn’t be on the board in public because I think it is invidious to do so but thank you for your question.” Can I get a “SORCER OF MILK” for Sir Chips up in here?
Another gentleman indicated gratitude over the reduction in away ticket prices, but asked whether the club could help to cap rail prices, as this was another burgeoning expense for the travelling supporter. Gazidis responded by praising the “unbelievably positive” away support. He confirmed again that the club were very active with the Premier League initiative to reduce the cost for the travelling supporter. But he said the club decided that the reduction on tickets for all matches was the fairest way to proceed because it rewards fans regardless of how they travel and it increased the rewards for those that attend regularly.
Then a question was posed as to whether Arsenal could match their commitment to Arsenal in the Community by paying their more junior staff, such as programme sellers and catering assistants, the London Living Wage. Ivan said he believed that the LLW was well intentioned, but that the club offer competitive packages to all of their staff and fulfil all of their legislative obligations. He said he didn’t want to get into a discussion about something as “complex and politically sensitive” as the London Living Wage.
The final question from the floor asked whether the club had a view as to the prospect of a winter World Cup in 2022 and asked that the club convey strong opposition to such an eventuality. Sir Chips quipped that he had no plans to go to Qatar because “I probably won’t be alive in 2022!” However, he admitted that the board shared the concerns of the gentleman and felt that it would be very disruptive.
He said it was a big issue but that we “can’t really shoot from the hip here.” Gazidis picked the question up and explained that the club were working with the Premier League, who are actively handling the issue. Ivan said that he sits on the board of the UCA and that Arsenal have a very direct input into discussions. He admitted that “Arsenal don’t have control over this issue” but that concerns have been made “very plainly” to FIFA. He said that he was relieved that FIFA have confirmed that the “football family will be consulted” before any decision is taken.
Sir Chips thanked the audience for their participation and the proceedings were brought to a close with a short film on Arsenal in 2013. LD.