Arsenal owner Stan Kroenke superimposed over Man City's Etihad Stadium Photo by Kristian Skeie/UEFA via Getty Images/ James Gill - Danehouse/Getty...

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Arsenal and Stan Kroenke could be in trouble as Man City take official action over £200m worth of deals

Adam Williams

Wed 12 February 2025 20:10, UK

The sun never sets on the City Football Group empire, with Manchester City one of 12 outposts across seven different time zones. But in Arsenal owner Stan Kroenke, they have a rival in terms of scope.

Kroenke Sports & Entertainment (KSE) was founded in the late 90s, originally to house Stan Kroenke’s NFL franchise, the St Louis Rams.

Fast forward 25 years and the St Louis Rams are now the Los Angeles Rams and KSE has taken over franchises in the NHL, NBA, MLS and, of course, the Premier League.

In terms of the overall value of the 77-year-old’s portfolio, City Football Group, worth around £5.5bn, isn’t even in the same weight class. Arsenal are just one island of wealth in £15bn ocean.

On the pitch, however, Man City have clearly had the upper hand since their first title in 2011-12, shortly after Arsene 𝓰Wenger coined to term ‘financial doping’ for clubs backed by the wealth of nation states.

Unlike the Kroenkes’ long-term plan at the Emirates, City’s ownership doesn’t expect a financial return on investment, or at least not any time♔ in the near future.

They are, for many fans’ money, the dream owners. The𓃲ir model has allowed City to spend freely in the past, which has accelerated their progress on the pitch and, in turn, their strength 🌞as a business.

After losing nearly £600m in the first five years of Abu Dhabi ownership, City are now one of the Premier League’s most profitable teams and have vast Profit and Sustainability Rules (PSR) headroom.

Arsenal tဣoo are relatively comfortable in terms of PSR, but less so than the team that have beaten them to the last two leaguꦑe titles. As a business, they have lost over £300m in the last five financial years.

This fact has been pointed out by City as a counterpoint to Arsenal vice-chair Tim Lewis’s🦹 argument that state-sponsored investment should not be allowed in football as it upsets competitive balance.

Almost two weeks on from the Gunners’ 5-1 demolition of City, the rivalry in the boardroom is as fierce in the ꧑b🌠oardroom as it is on the pitch.

Why? Well, it’s complicated. At least, it’s more comp🤡licated than the ‘blue vs red cartel’ raging in the more conspiratorial corners ofܫ social media would have you believe.

As a titan of American capitalism, you might 𒈔think Stan Kroenke would be all about free-market dogma. But when it comes to Arsenal, he wants more red tape, not less.

Arsenal have voted against City on raising the PSR 💯limit from £105m to £135m, for example.

They have also reserved the right to seek compensation if City are found guilty of the financial charges levelled at them🔥 by the Premier Le෴ague, which could run into the tens of millions.

Incidentally, City were upset that executive who appointed the judges in the 115 charges case is an Arsenal fan. That said, so too is Lord🐠✱ David Pannick, the man representing City.

In what was widely seen as a counterpunch to that case, City have since launched a legal challenge to the Premier League’s Associated Party Transaction (APT) rules.

Arsenal gave evidence in favour of 𒁃the Premier League at the tജribunal, deepening the tension between the two clubs further.

City were partially successful in their challenge, forcing the league’s lﷺawyers to rewrite some lines of the APT rules, which govern transactions between clubs and owner-linked entities.

However, City aren’t done yet. The latest fallout from the challenge could hav✅e implications for Arsenal.

• READ MORE: £50m attacker now expected to join Arsenal as soon as the season isಌ over

Fresh Man City APT challenge could hurt Arsenal’s PSR position

One revisio𓂃n the Premier League had to rewrite following the two-week APT case in October concernꦜed soft loans, which are effectively interest-free loans from shareholders.

Essentially, Ci♉ty’s argument was, i🅷f commercial deals with owner-linked companies need to be screened by the Premier League for fair market value, why aren’t loans from shareholders treated the same?

They 🐟were ✅successful in that department, with Premier League clubs voting to pass a new set of rules that will apply a fair market interest rate to shareholder loans for the purposes of PSR going forward.

Arsenal have over £200m worth of soft loans from🌸 Stan Kroenke which, had they borne interest since they were taken out, would have eaten into their PSR position relatively significantly.

Now, City are launching a fresh challenge to the APT s🐟ystem, which they think should be declared null and void. What’s more, they appear to want the new soft loans rules applied retroactively.

If successful, that would take a chunk out of Arsenal’s PSR calculat♓ion, albeit for assessment windows that have already passed.

• READ MORE: Stan Kroenꦫke confirms £445m cash injection as Arsenal target ‘extr🐼aordinary’ Emirates Stadium expansion

Arsenal set for new PSR challenge next season

2024-25 is the l൲ast season Arsenal will have to ⛄be mindful of the Premier League’s £105m allowable loss limit.

Instead, from 2025-26, a new system will be applied which is due to be simi♏lar to UEFA’s squad cost rules.

Under the new model, Arsenal will be limited to 🐟spending 85 per cent of their annual turnover and profit from player sales on wages, transfers and agent fees.

For context, based on projections for their 2023-24 financial ac♏counts, thatཧ would give them a limit of £518m.

Ho🦂wever, given that Arsenal have been used to the UEFA squad cost rules for several years, compliance with the new Premier League rules shouldn’t be an issue.