Arsenal's Usmanov Criticizes Board Over Finances, Van Persie - San Francisco Chronicle

(Adds Arsenal comment in seventh paragraph.)

July 5 (Bloomberg) -- Arsenal's second-largest shareholder criticized the London soccer club's board over the direction of the team following captain Robin van Persie's decision not to extend his contract.

Red and White Securities Ltd., headed by Russian billionaire Alisher Usmanov and Farhad Moshiri, released an open letter to the board saying the team can't compete and keep its best players with its current financial model. Van Persie, the Premier League's top scorer last season, announced yesterday he wouldn't seek an extension when his contract ends next year.

"Yet again we are faced with losing our true marquee player at the club because we cannot assure him of the future direction and give confidence that we can win trophies," said Red and White, which owns almost 30 percent of the club's equity. "Where are the safeguards to ensure that this doesn't happen again and again in the future?"

Stan Kroenke, the U.S. owner of the National Basketball Association's Denver Nuggets and National Hockey League's Denver Avalanche, took control of Arsenal in 2011 and Red and White says it's sought and been refused meetings with the American billionaire.

Red and White said it's invested about 200 million pounds ($311 million) in the club and does not have representation on the board. The group maintains Arsenal Chief Executive Ivan Gazidis has created the impression of a "bitter standoff" between the parties that may "destabilize" the club.

Trophy Drought

"In our view it is clear that you are trying to distract attention from the more fundamental issues facing the club," the letter read. "These are the financial model, the lack of investment and the club's future strategic direction."

Arsenal said it had received the letter and was reviewing its contents.

Van Persie said on his website yesterday that his decision was based on disagreeing with Gazidis and manager Arsene Wenger over the club's future. Arsenal finished third in the Premier League last season but hasn't won a trophy since 2005, the season before it moved into the 60,000-seat Emirates Stadium.

Prior to last season, the Gunners sold captain Cesc Fabregas to Barcelona, while midfielder Samir Nasri and defender Gael Clichy joined Manchester City, which went on to win the Premier League. Fans have been critical of management's lack of spending to strengthen the squad over the past few years.

'Tight Finances'

"As a consequence of this policy, which is dressed up as prudent financial planning, it is down to our manager, and not the shareholders, to have to deal with the club's tight finances, carry the burden of repaying the stadium debt by selling his best players and having to continue to find cheaper replacements," the Red and White letter read. "All of that, naturally, comes at the expense of performance on the pitch."

Red and White says it will continue to purchase more Arsenal shares from "anyone who wants to sell them to us." It also set out its vision for the team.

"It is simple," the letter read. "A debt-free club, with a big enough war chest to buy top talent players who can hit the ground running and who can complement the club's long tradition of developing young players and homegrown talent. Together they can help the club win the most prestigious trophies, because it is the trophies which are the crowning achievement for everybody at the club."

Annual Revenue

Arsenal's board has previously rejected Usmanov's call for a rights issue of shares to raise funds. Last September, Arsenal Holdings Plc posted annual revenue of 255.7 million pounds, down by a third on lower property sales at its former ground. Net income was 13 million pounds, while net debt was reduced by 28 percent to 97.8 million pounds.

Usmanov and Moshiri wished Kroenke "every success" in running the club, even though they said they had reservations about the policies of the management team and board.

"We, as the co-owners of Red and White, will proudly retain our holding in the club as a long-term investment for ourselves and our family members to benefit for generations to come," the duo said in closing their letter. "We want the absolute best for the club and will do what is necessary to ensure the success of the club that we all love."

--Editors: Peter-Joseph Hegarty, Chris Elser

To contact the reporter on this story: Bob Bensch in London at bbensch@bloomberg.net.

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net.