EliteKiller wrote:LMAO wrote:So...how exactly did I create a fictitious scenario? I simply used the one you provided
Y'know, the one where you intentionally devalued Arsenal via a race car proxy. And then because you wanted to become an expert finance lecturer yet got the lesson wrong, I gave justification as to why the idea of investing in new assets without 100% share ownership isn't that dumb when you delve into it.
And then you introduced new information like I don't already know investment in players pre-Usmanov selling would've likely increased Arsenal's valuation, thus making Kroenke's buyout of the Russian oligarch more expensive. If Kroenke had let Usmanov actually invest, then Arsenal is likely worth a hell of a lot more than the $2.3B it's currently valued at. Arsenal may have been worth $3.0B if Usmanov was allowed to bankroll us—even without Kroenke providing outside funds himself. 67% of $3.0B may not be worth more than 100% of $2.3B, but when you include Kroenke not needing to cough up $712 million to buy Usmanov out, the potential profit from the increase in valuation would more than offset the difference for Kroenke.
I don't even know where to begin ... I created a fictitious analogy and called it exactly that ... the 2 billion dollar car? it's not real ... but the economics are very basic, or at least they should have been ... but clearly they went straight over your head ...
Now you're creating your own fantasy world to justify your previous fantasy ... and frankly it's beyond jackanory ....
If Kroenke had let Usmanov actually invest -
so in your scenario Usmanov gives Kronke free money?Arsenal may have been worth $3.0B if Usmanov was allowed to bankroll us -
that's based on what a dream you had?67% of $3.0B may not be worth more than 100% of $2.3B -
You're right it isn't So let's get your imaginary scenario in chronological order of how you think it would have gone ....
Usamanov invests 200m and for that he wants nothing back, he's just happy to be the nice guy Mr Arsenal, that 200m magically increases the value of the club by 700m from 2.3 billion and so we arrive at your lovely 3 billion number (
the other 500m coming from the magic money tree no doubt) .... Usmanov loves Kroenke so much he's happy for Kroenke to have complete control of his 200m investment and for Kroenke to take all the profit in his increased share value even though he made no investment at all ... what a lovely fella he must be ....
Meanwhile in the real world none of that happened ... nor would it ever happen ....
In the days of billion pound football businesses nobody puts 100's of millions into any club without getting something back ... not even fanatical fan football club owners ... you are living in a world of pure delusion if you think that was ever going to happen ... the fact it never did, and that Usmanov left, and that Kronke now owns 100% of our club kinda bears that out don't you think.
Usmanov wouldn't expect anything back and would do it out of the kindness of his heart? smfh. Where are you getting this straw man? Please point me to where I ever insinuated such.
Let's break it down for you: Arsenal is worth $1.4B. Usmanov gives the club a $400MM interest-free loan in 2011 to purchase players (getting the ball rolling and eventually Arsenal can sell those players on for a profit and get a huge jumpstart on being a self-sustainable juggernaut in the present day). Arsenal goes on to win major trophies, or at least consistently competes for them. Value increases to $3.0B (roughly what Bayern Munich is currently worth) because of on-field success leading to better sponsorships and being a club—the biggest club—in London.
For $400MM, the club's value increases $1.8B in almost a decade (instead of $1.1B from no outside funding). $1.8B * 30% = $540MM for Usmanov. He increases his potential profit by $140MM. Hardly receiving nothing in return and giving all to Kroenke, is it?
And before you give me some bs about a $1.8B increase in valuation from 2011-19 being unrealistic:
•Barcelona was worth $975MM in 2011, $4B now ($3B increase)
•Real Madrid $1.5B in 2011, $4.2B now ($2.7B increase)
•Manchester City $291MM in 2011, $2.7B now ($2.4B increase)
•Bayern Munich $1B in 2011, now $3B ($2B increase)
•Chelsea $658MM in 2011, $2.6B now ($1.95B increase)
•Manchester United $1.9B in 2011, $3.8B now ($1.9B increase)
•Liverpool $552MM in 2011, $2.2B now ($1.65B increase)
•Tottenham $412MM in 2011, $1.6B now ($1.4B increase)
Meanwhile, we've gone from $1.2B in 2011 to a whopping $2.3B now.
So please explain to me why that is? Why our peers exploded in valuation (i.e., at least near tripled in value, other than United who still managed to double), except for us. I'll save you the trouble and tell you: Kroenke is simply too risk averse to properly own a football club, and I don't just mean in terms of financing.