Arsenal blow Chelsea out of the water as Josh Kroenke 'really excited' about £199m masterplan

Today at 02:15 AM

As the public face of Kroenke Sports & Entertainment’s outpost in North London these days, Josh Kroenke is often the subject of intense scrutiny from the Arsenal faithful.

Almost two years on from the boardroom reshuffle that saw him promoted to co-chair at the Emirates, Stan Kroenke’s son faces a familiar family challenge: pressure for more investment.

Those calls have grown louder during Arsenal’s hot-and-cold run of form in recent weeks. The universal consensus – even before Gabriel Jesus’s ACL injury – is that a centre-forward is badly needed this January.

The Gunners are just about clinging onto Liverpool’s coattails in the Premier League title race. But while 2nd-place would be seen as a strong finish in previous years, the bar has been raised under Mikel Arteta.

The Kroenkes did release funds to help get Arsenal back in the lucrative Champions League, which has been worth north of £100m to the club this season and last.

But spending this season has tapered off and the club’s combined wage and amortisation bill (how clubs account for new signings over a period of time) is the lowest of any of the ‘Big Six’ besides Tottenham.

Unlike many executives of Premier League clubs, Josh Kroenke can’t hide behind Profit and Sustainability Rules (PSR).

Arsenal had about £164m of PSR leeway at the last count, based on world-renowned football finance analyst Swiss Ramble’s projections.

If KSE wanted to, they could easily give Arteta and stand-in sporting director Jason Ayto £100m to spend on a new striker. That is a fact.

They have a £70m credit facility (an overdraft, essentially) from which they could draw, or the owners could inject more money into the club via equity or a loan.

Their apparent reticence to do so only adds to the perception among some Arsenal fans that the owners think spending just enough to qualify for the top four delivers the best income-to-expenses margin.

Winning the league generally requires a less risk-averse approach that many believe is not in the Kroenke family’s DNA, although they would gladly be proved wrong.

If that's the case, it begs the question: what is Stan and Josh Kroenke's ultimate ambition in N5?

In principle, it's a straightforward answer – they want to make money. What remains unclear is how and when they will get there.

The Kroenkes have never taken cash out of the club via a dividend, and it’s highly unlikely they ever will.

Instead, the aim is long-term capital growth. They bought the club for about £1bn. One day, they will sell it, probably for a huge profit. It’s a long-term plan, but it is the plan.

To do that, however, they need to demonstrate the viability of the club as business to a would-be buyer.

• READ MORE: Arsenal planning to build 'new stadium in the sky' as Josh Kroenke's Emirates masterplan evolves

KSE could be sitting on £199m asset at Arsenal

Wage inflation and soaring intermediary fees are forcing clubs to innovate to increase revenue.

Arsenal, for example, are now part of a centralised sponsorship hub encompassing the whole KSE network. The hope is that this will help raise commercial income.

As well as making regular matchday tickets increasingly inaccessible for supporters, Arsenal are also among the clubs who are focusing on the lucrative corporate hospitality market.

Josh Kroenke has said Arsenal are exploring the possibility of expanding the Emirates, which would inevitably see more money-spinning facilities built to accommodate the prawn sandwich brigade.

Media income meanwhile is mostly overseen by the Premier League and UEFA and, while the value of TV rights has exploded over the last two decades, the growth will not continue indefinitely.

Women’s football is another area where the owners are seeing pound signs.

Arsenal, who appointed Renee Slegers as head coach on a permanent basis last week following an 11-match unbeaten run in her interim period in charge, are currently 2nd in the Women’s Super League.

They broke the attendance record in the English women’s game three times last season and the increased interest in the team is reflected in the balance sheets.

Last week, Deloitte release the Women’s Football Money League, showing that Arsenal matched Barcelona as the highest revenue-generating side in the women’s game in 2023-24.

They lost £820,000 on the £15.1m they earned in the season, a considerably more favourable margin than the £52m the men’s team lost on revenue of £467m over the same period.

Last year, it emerged that Chelsea valued their women’s team business at around £150m and, with owners Todd Boehly and Clearlake Capital in talks to sell a minority stake, have the chance to prove that appraisal right.

While there are myriad less easily quantifiably factors contributing to a club’s value, the starting point is usually a ‘revenue multiplier’.

Chelsea generated £11.4m, so a £150m valuation works at a roughly 13.2x revenue multiple. Using the same calculation, Arsenal’s women’s team would be worth approximately £199m.

It’s easy to see why Josh Kroenke, as quoted by ESPN in the summer, said he is “really excited about that part of the business” in the wider context of “women’s sport taking off around the world.”

It is an asset that, when the Kroenkes come to sell the club, will significantly move the needle in negotiations.

For context, a £199m valuation is almost £20m more than the sum paid by the San Francisco 49ers to take full control of Leeds United, one of English football’s most storied clubs, last summer.

• READ MORE: Stan Kroenke's right-hand man at Arsenal accused of trying to 'derail' £106m masterplan

Can Arsenal afford to sign a world-class striker this January?

To varying degrees, Arsenal have been linked with Newcastle’s Alexander Isak, RB Leipzig’s Benjamin Sesko, Brighton’s Evan Ferguson, and Juventus Dusan Vlahovic this January.

Different deal structures and loan arrangements have been mentioned, with Isak likely the most expensive permanent option. Newcastle value him at £115m.

The mood music is that the owners are willing to spend, especially after Jesus’s season-ending injury. However, a blockbuster addition would require the Kroenkes to revise their budgets for the season.

Liquidity (how easily the owners can access cash) isn’t an issue for them, but KSE’s emphasis on self-sufficiency and proving out the viability of their long-term business plan is.

The focus will be on value and, with the league title likely beyond them in 2024-25, it would be a surprise not to see them wait until the summer, when the market is less erratic, to make a Hollywood signing.