What is Usmanov’s End Game?

Ah, dear ol’ Alisher is at it again. The lovable Uzbek (and by loveable I mean wouldn’t go near him with a 10 foot pole) is never one to miss an opportunity to speak out and drive his own agenda. His usual MO is to wait until the tenor is pitched and vociferous that he knows he will play to a very sympathetic audience.

Today, is such a time. Imagine my ‘surprise’ (please do the quotation finger movement here) when I saw that CNBC EMEA had started following me and then promptly promoted their Usmanov interview. Sneaky bastards.

In that interview Usmanov comes across as he has previously – just like one of the supporters. In fact in every previous nail he has tried to drive into the coffin, he hits on every point that supporters hit upon daily. If anything, Alisher certainly knows his audience well.

Like previous hit jobs and make no mistake this is a hit job being executed by an extremely PR savvy individual, Usmanov’s aim clearly is for his rival for control Enos Stanley Kroenke. Now, let’s be clear before we go further, Stanley is a target of this blog as we place a lot of blame at our absentee owner for not steering the ship that is Arsenal or at least giving orders to his first officer (Ivan) to do so.

In today’s interview, unlike others, he has used Wenger as his vessel to target Stan, insinuating that he’d be a counter to Wenger’s stubbornness. At least that’s the way I am reading his quotes.  It’s all very superfluous but he does pretty much manage to hit every topic outside of ticket prices that supporters want to hear.

Usmanov is a man that garners as much visceral reaction as Wenger and Stan do. However, unlike the other two, there is actually a middle of the road that exists with this man. There are those that have no desire to see him in control of the club and there are others that want him absolutely to be in control of the club. We do like our absolutes at Arsenal.

But there are also a growing number of supporters who just want him to have his voice on the board as a counter to the silence that emanates from Stan’s ranch in Wyoming.

At some point at the end of the 2013 Usmanov  reached the 30% mark in terms of his Arsenal holdings. Since February of 2012 he has been purchasing small pockets of shares to get him closer to that once what was considered that golden 30% threshold. It was a slow painstaking process but he got there and there is nothing to suggest that as more shares becomes available he won’t try to methodically snatch them up.

It used to be until recently, that someone owning 30% of an organization would be entitled to seeing the books and openly stating their intentions. That no longer is the case. Laws were rewritten and approved around 2013 (I think) that removed that stipulation. So basically, nothing magically happens.

However, Alisher Usmanov has shown himself to be a shrewd businessman. We’ll get into the major concerns about Alisher in a moment but outside of that you only need know that regardless of how he initially got his billions he has made a habit of making shrewd business decisions that have benefited him handsomly. One of his bigger ones was his purchase of Facebook shares and selling them at the social network’s IPO for $1.3 billion.  Word is he has also bought a lot of shares in Apple.

Outside of these interest Usmanov is owner of a diverse interest of metal, media and natural gas companies. He co-owns both Metalloinvest and Gazprominvest, holding companies set up to manage his various interests in metals and gas. He is also sole owner of Cyprus based Gallagher holdings a conglomerate with various interests including metals.  In addition, Usmanov holds investments in many other companies including our Arsenal.

What’s it all add up to? Speculation is that Usmanov at one point was worth a whopping £13.3 billion – easily surpassing Chelsea’s oligarch, Abramovich. That sum would make him the richest man in England and Russia. He is also on number 34 on Forbes billionaires list and number 67 on the Forbes most powerful list (Stan is number 248 on billionaires list and doesn’t feature on Forbes most powerful).

None of this is meant to gloss over Usmanov and hide the big, glaring question marks that remain about the man. The first of which is how he made his money and the reported ruthless streak he possesses.

Speculation is rife that information on Usmanov’s past will be hard to research because he has used his vast wealth to silence his critics especially via media outlets like television and news outlets.  And while he was pardoned of any offenses that were committed under the past Soviet regime, questions still remain as to whether it was because of influence rather than actual innocence.

Usmanov is considered by some in and out of Russia to be nothing more than a criminal with high-level connections that saved him from a long jail term. After securing his freedom, he plunged into the “privatisation” process using “muscle” to secure control of some of his assets. It was also during this time that an alliance between the Russian Mafia (of which Usmanov is accused of being part of) and Russian security services was being formed.

Usmanov reportedly has two key alliances. He is said to be close to former Uzbek president President Karimov and to his daughter Gulnara. Some contend that it was none other than Usmanov who engineered the 2005 diplomatic reversal that saw United States kicked out of its airbase in Uzbekistan and Gazprom took over the country’s natural gas assets.

Usmanov, via his position as chairman of Gazprom Investholdings was said to have paid a bribe of $88 million to Gulnara Karimova to make this happen. (this information comes from Carigmurray.co.uk 6th September 2007)

In terms of Arsenal, there is widespread doubt that Arsenal would become nothing more than a billionaire’s plaything much in the way Chelsea looks to become for Roman Abramovich were he to ever take control of the club. For all of Usmanov’s protestations, his wealth would certainly mean that he’d have the freedom to do as he pleases with the club and the good has to be taken with the bad. For all his protestations of being a “fan”  there has been no guarantee that he won’t make Arsenal a merry go round much like Chelsea have become.

No one wants Usmanov to come in and take this club down that same Chelsea path. No one actually wants Arsenal to have one central owner. While supporter influence has diminished in recent years, it needs to be retained if at least to give some voice to the supporters. Any one primary owner would effectively be the end of that whether it is Stan or Usmanov.

So what’s Usmanov up to? It’s obvious from all the moments he has seized upon – that Usmanov is looking to apply pressure for a door to open to him. Before the change in the laws, he would’ve had a voice once he reached 30% that is no longer the case and it’s one that still frustrates him:

“This a strange position when the second biggest investor, who has more than 30%, decides nothing and it is frustrating”

In the ever-shifting dynamics of football club ownership, every strategic move can seem as calculated and potentially lucrative as a session at the meilleur casino en ligne français. Observers of Arsenal have noted Alisher Usmanov’s play for greater influence, orchestrated with the precision of a master gambler placing bets across the green baize. While Stan Kroenke remains stalwart in his position, asserting the club as a long-term investment with its value poised to skyrocket due to burgeoning media funds and commercial deals, the undercurrent of fan unrest could be the wild card Usmanov is betting on.

Like a shrewd player eyeing the jackpot, Usmanov seems to be playing the long game, perhaps waiting for the moment when fan sentiment sways enough to make Kroenke consider the odds. It’s a high-stakes game where the payout could be control of one of football’s most storied clubs. My uncle, who’s been a company insider, casually mentioned that should Kroenke’s resolve waver, Usmanov might just have the financial clout and the acumen to make an offer too rich to ignore, potentially redefining the Gunners’ future.

So if the value of the club today is £1.5 bn and the value would be enhanced say to the value of £2 bn in light of future deals, imagine how much Stan could make from doing a deal Usmanov if this was his ploy? It might be too good for Stan to resist.

It could also be that Alisher wants nothing more than a place on the board. He has his shares and as such is the second largest shareholder and should be entitled to certain rights. He could force a place on the board via the courts. He could argue that owning essentially a third of the company should make a place on the board mandatory.

Regardless of the end game its becoming clearer that the action in the boardroom may be more exciting than the action out of it. And while no one wants Arsenal to be dragged into some backroom civil war – it may be necessary on some level to get the club to actually live up to the idea of FORWARD.