Arsenal AGM Report
12 comments October 23rd, 2004
Arsenal’s AGM took place the other day. Here’s what went on, with thanks to our intrepid reporter!
This year’s AGM was the first since AFC clinched the bank loans.
So this is an appropriate moment to remind fans that no other club in Britain could have persevered for four years and overcome all the obstacles, and jumped through all the legal and administrative hoops, in the way that Arsenal have done, led by Danny Fiszman and Ken Friar.
The team off the field does not appear on Match of the Day.
It only appears at the AGM.
Clearly, Arsenal have the best board of directors in the Premiership.
Historically, the club has always let the manager manage the football side, and Arsene Wenger does a lot more than that, as you all know.
Of course, each big football club is different.
At Bayern Munich the general manager is on the bench for every game. Uli Hoeness sits there in his stadium coat next to the coach, for every game !
AFC have no general manager because AW is the coach, the manager and the general manager.
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THE AGM kicked off with an opening address by chairman Peter Hill-Wood.
Then there was a presentation by managing director Keith Edelman on the financial results and funding arrangements, followed by Danny Fiszman talking about the Emirates Stadium development and associated projects.
In a change from past practice, following a request from Arsenal Supporters Trust, each shareholder was asked to submit written questions on a form.
There was an opportunity at the end to ask questions from the floor.
It began with a summary of the accounts, then questions.
Q) How much of Nike money has been paid?
A) Keith Edelman: £18m has been paid and the remaining £37m will be by July 2006 in two installments.
Q) Are the board planning to float the shares on the stock market?
A) Keith Edelman: Obviously we are on Ofex. It is something that we review from time to time. We always have an annual review.
Q) What are the intentions of the ITV/Granada shareholding?
A) Keith Edelman: Tom Beck[?] is an observer and I asked him before the meeting what his intentions were. He said: “No comment”. So I think I will have to give you a no comment to that question as well.
Q) What income do you expect to receive from the 2,000 flats being built across the bridge from the site and once the income has been received what will the outstanding debt be?
A) Keith Edelman: The flats that I think you are talking about are the ones that we sold to Wilson Connolly. The money goes into Ashburton Trading and then back in to the group funds. There will be a debt for construction when the stadium is ready to open. At that time we will review our position and will probably re-finance the debt at that time with two objectives: to lower the interest rate and to increase the term. The purpose of that is quite clear.
Currently we have a project finance loan which has a huge amount of construction risk and also the risk that we have never operated in the stadium and therefore they do not know how many people will turn up in the new stadium. We are pretty confident it will be full. But banks take a contingency view and that it might not be full. Once we have demonstrated that we can build the stadium, once we have demonstrated that construction is completed, we will be able to seriously to reduce the rate and increase the term.
The directors were re-elected and then Danny Fiszman gave shareholders an update on the building work.
He said, “At last year’s AGM, I gave a presentation on the new stadium project. I finished by saying that all was in place to start construction in the first quarter of 2004, once the financing was in place.
“As you know finance was put in place in February and as Keith has fully explained to you. I know would like to take you through the progress since February.
“The financing being completed allowed us to sign a £220 milliom contract with Sir Robert McAlpine. This includes not just the stadium, but also the waste disposal re-cycling centre and all of the structural costs plus the bridges.”
He explained that some of the contractors were relocated in the north part of the site and that two private waste operators had moved off site in February.
“The work started in earnest. By May the site had been cleared other than the waste transfer station and the depot. We did have to convince the banks to allow to draw down part of the loan without vacant possession of the site.
“I am advised that in project finance this has never been down before. So yet again a first for Arsenal.
“The relocation of the waste transfer station and depot was critical. July 23 was the target date given to us by Sir Robert McAlpine for completion.
“I am pleased to say that the new waste re-cycling center was a week early. The new waste re-cycling centre, built at cost of £50 million, was handed over to LBI in July and off opened last Thursday.
“It is a state of the facility with advantages over the previous waste transfer station at Ashburton Grove. The refuse comes straight in, and taken to the land fill site but also as all facilities for re-cycling.
“At end of September, the south bridge was launched into position. The bridge is 23 metres wide, which is the width of the M1 without central reservation. The site is now totally cleared.
“The west side of stadium already has its upper tier of terracing installed. And good progress is also being made on north and east side. The south side, where construction was delayed by waste transfer station, has some catching up to do.
“The Emirates stadium with its 150 boxes, 6,750 premium seats and total cap of 60,000 continues to be on schedule for that August 2006 opening. From results, you will know that property side continues to deliver profits to the group.
“Highbury will be turned into Highbury Square. We hope to start marketing next summer. We have taken on some residential developers to help as with Highbury Square. It is the board’s intention to develop and market it ourselves. We believe that will add something like £30 million for the club.”
A DVD of the new stadium was shown, and applauded
Hill-Wood said, ” Some people asked about seat allocation. It is quite complicated and I don’t want to get involved. So I will pass over to Keith to explain.”
Keith Edelman, “Executive boxes have been on sale. we have sold 120 boxes and have a lot of people in the pipeline. we have got boxes from one-year to 10-year, and some people have taken 10-year agreements.
“Some people paid ten years money up front. The most expensive boxes were the first ones we sold.
“All members will receive a big document which will layout in clear detail the 14 categories of priority for seats. We will sell 6,750 club seats and those will be sold first before we move to general admission sales, which we will do in 2005.
“The prioritisation tries to be fair to everyone;
We start with C and D debenture holders, then highest priced tickets through to lowest price tickets.
“There has been some criticism of this. They are saying that if you pay £50 here, you will have the first choice of the £50 seat in the new stadium. If you pay £30 here, you will have the choice of the first £30 seats in the new stadium.
“We are trying to be fair to everyone because if we give the higher priced tickets priority over everyone else then when the poor people who pay £30 come along, all the best seats will probably be taken.
“So we are trying to give each grouping here their priority over a similar seat in the new stadium. We will take into account row numbers and seat numbers. So if you have a £40 seat here, you will be called to an equivalent seat in the new stadium.
“We are trying to ensure the seat prices when we move to the new stadium will be similar to the last year at Highbury. It’s not a commitment to you, it is our current intention.
“We have always separated shareholders and the season-ticket waiting list. There are a vast number of people on our waiting list, but if we get to a position where there are season tickets left after the waiting list and membership have had the opportunity, then we will offer them to shareholders. I must be frank with you and say that I don’t believe that there will be any left.”
Hill-Wood then answered some questions
Q) Emirates name on the main structure. Concern how much of stadium be branded?
A) The answer is 50-50.
Q) Will the board consider moving shares from Ofex to AIM?
A) We haven’t closed our minds to that idea, but it hasn’t been formally discussed. maybe a year or so. I don’t think we have any intention of doing to at the moment.
Q) No smoking stadium?
A) Yes.
Q) Can we shareholders have a tour of the new stadium at the AGM next year 2005?
A) It is very likely impractical. You can’t go on site without a helmet.
Q) How can Emirates deal be give a higher values of £100million when discounted from £90million.
A)Edelman: A lot of the £90million occurs in the first eight years of the deal. We receive some money next year. So we have calculated it when the rights would have risen.
Hill-Wood
Q) Did the board consider putting the name of the new stadium to a vote at this AGM?
A) No we didn’t. [laughter]
Q) Bonuses for winning trophies in Emirates contract?
A) Yes. A few hundred thousand pounds here and there.
Q) Will we keep changing the name of the stadium when deal end?
A) It won’t be my decision, but I suspect not.
Q) Are the board happy signing up with a state airline of a non-democratic country with a dubious human rights record? Or do we have no moral position on this issue?
A) [Scattered applause]. I don’t believe that Dubai has a bad reputation for human rights. I think people are inclined to lump all Arabs together. These are very worthy honourable people and we have no moral issue about it.
Q) Would Emirates continue to sponsor the referee’s shirts as they do now, or is a conflict of interest?
A) I think that probably is. Might be worth asking Emirates.
Q) Will new sponsorship effect our relationship with youth group in Israel? Will we be able to wear the new shirts in Israel?
A) I can’t see it will effect the sponsorship and cant see why you shouldn’t wear the shirts. Should have no effect.
Q) Will Dennis Bergkamp get a testimonial this season?
A) I have no objections. But someone has to request to provide the stadium. It is not up to us to run the testimonial. For tax reasons we have to keep away from it.
Q) One for Mr Wenger. You seem a bit light on central defenders?
Wenger was cheered when he stood up.As usual !
A) Wenger : We are not very light as Kolo and Campbell are very solid. I believe that Cygan did well l when he came in. We have young boys like Senderos, who was out for a complete year and he is quite promising. We will find one of two other ones, don’t worry. Overall we have more midfielders and strikers than defenders. We will try to sort that out as we tried to correct that in the summer and it didn’t work. And we will try to correct it in winter.
Hill-Wood: The format wasn’t our suggestion. If everyone hates how we have run the meeting we can revert to previous formats. We did answer to the plea of the shareholders, so it is your fault if you don’t like it. Anyone else got any questions from the hall that we have not covered?
Q) Are you seeking we pay for Premium seats four years in advance?
Edelman : There are some seats which are being sold on a four-year up-front basis. For all the other seats at Premium level, it is your choice to take on one-year contract or four-year contract. The advantage of taking a four-year contract is you pay the same price for the whole 4 years, guaranteed no price increase.
Q) Any priority for Premium seats above normal season ticket holders?
A) Edelman: Premium seats do not give them the rights to cup final tickets.
That was about it!
In an ideal world GUNNER-BLOG would bring you the AGM report the following day……..We do our best.
Something about politics, and jazz.
Nice.
