Tuesday, 26 April 2011

Lessons from history. A Q&A with fans from Kroenke’s other ‘franchises’

Words: 3,436. Estimated reading time: 12 minutes, 25 seconds.
In an effort to find out whether we can learn anything about what impact Stan Kroenke will have on Arsenal, I contacted supporters from the other sports clubs he owns. Their responses were interesting, and at least don’t give me any concerns that he’s a tyrant in disguise.

From an Arsenal perspective, the most significant thing I take away from their responses (below) is an increased sense that Kroenke will not make radical changes as major surgery is not required. There is also an impression, particularly with the ice hockey team since basketball appears to be his main passion, that things will be driven by knowledgeable people at the club, not by him or executives installed to carry out his orders.

Equally, he does appear willing to put his hand in his pocket and splash the cash if required. Well, I say ‘he’ – actually, it is a club decision because he is so willing to let those in charge get on with running things. And therein lies a double-edged sword for me: while I don't want the owner interfering in things, I do want him providing more direction and scrutiny. But judging by his previous record, there is little hope that Kroenke will demand a change in, for example, transfer policy if those that run the club (ie Wenger) don't initiate it.

Anyway that’s my interpretation, here’s how the supporters kindly responded. Nate Timmons (NT, in Nuggets blue) writes for the intriguingly-titled Denver Nuggets (basketball) website Denver Stiffs, Mike Thompson (MDT, in Avalanche burgundy) writes for Colorado Avalanche (ice hockey) website Mile High Hockey and Will Horton (WH, in black) writes for the St Louis Rams (American football) website Rams Herd. Thanks to them for their thoughts and time.

A is for Arsenal: How would you sum up Stan Kroenke’s impact on the club, both on and off the court/rink/pitch?

Nate Timmons (NT): Nuggets ownership was a mess before Stan Kroenke arrived. He brought great stability when he took over, built a new arena, and turned a team that was heading in the wrong direction around with a little luck (getting to draft Carmelo Anthony) and a lot of smart moves. And the Nuggets turned around in a hurry!

Nuggets fans are once again proud of their team, the arena is routinely packed, and basketball is a very hot topic around town. I'd say his impact has been great and the team is really building something special.

Mike Thompson (MDT): He personally has little to no interaction with the team as he has always preferred to hire knowledgeable people (such as general manager/president Pierre Lacroix who has effectively run the team for the last 16+ years). I imagine his interaction would decrease further now that his son Josh is the owner on paper due to the NFL's rules.

As a ubiquitous owner, he helped build the 2001 Stanley Cup team and the division champs that followed for the next several seasons. He's also been at the reigns during the two worst seasons in franchise history.

Will Horton (WH): The pitch? We call it the GRIDIRON! ;) Kroenke has been a minority owner of the Rams for more than a decade, but was always behind the scenes and didn’t make his presence felt. He had a chance to make a big wave when he took over, but thankfully he didn’t really have to. We have a promising coach and an acute GM who are on the same page, and have been rebuilding the roster for the past two years. Rather than upset the boat and bring in “his guys” right away, Kroenke essentially has provided guidance and stability.

He was confirmed as the team’s owner right before the first game of the regular season, and he went out of his way to come down to the locker room and speak to the players. Reports are that they were quite energized and came out of the gate playing very strong football.

However, there is a huge issue looming for the Rams: whether or not they’ll stay in St Louis when their stadium lease expires in 2015. Kroenke has not tipped his hand at all one way or the other, but it’s quietly expected that he’ll make a push for a new facility. Rams fans would love for him to “promise” to keep the team here, but I doubt we’ll hear anything like that until an actual deal is in place.

A is for Arsenal: Kroenke is portrayed in the press as a ‘small c’ conservative owner, who prefers to oversee incremental improvement rather than splashing out on big name signings. Does that description fit with how you and other supporters see him?

NT: I think Stan Kroenke is obviously a very smart businessman and with the Nuggets he has done a great job of letting his general managers do their job. Meaning that while he has the final say on signings and trades - he defers most of how the team is assembled to the guys he hires to do that job.

During Kroenke's tenure with the Nuggets the team has been among the top spenders in the league. He allowed the team to exceed the NBA salary cap and paid the penalty, which is the "luxury tax" in the NBA, where teams have to match every dollar they spend over the cap 100 per cent.

While Kroenke has been the owner of the Nuggets the team has brought in high-priced free agents like Kenyon Martin, Andre Miller, and Al Harrington. The team has traded for high priced players like Marcus Camby, Allen Iverson, and Chauncey Billups. The Nuggets have also re-signed or extended the contracts of guys like Chris Andersen, J.R. Smith, Nene, Carmelo Anthony (after his rookie contract was up), and most recently the coach George Karl was given an extension that was well deserved. Even Carmelo Anthony was offered the maximum extension allowed this season which would have been his third contract with the Nuggets (he just wanted to go play for his hometown team in New York).

The Nuggets have also made some cost-cutting moves that had some fans in doubt, but a lot of moves that have been made that cut cost have actually improved the team - sort of an addition by subtraction deal. Nuggets fans can't really complain about Kroenke's moves because his wallet has always remained open as far as the Nuggets are concerned.

Basketball is long believed to be Kroenke's true passion, so we should be in good hands. A lot of questions about the Nuggets will be answered this off-season though as the team has a lot of key free agents. Will the Nuggets be able to keep all their players? We all hope so.

MDT: Yes and no. Historically, since buying the team in 2000, the purse strings have definitely been controlled by Kroenke (or Kroenke Sports Enterprises) but he didn't have an overly tight grip on them.

They were willing to spend big money after purchasing the team and up until the salary cap was implemented in the NHL after the lockout of the 2004-2005 season where traditionally one of the highest payrolls in the league.

After the implementation of the cap and the fact that the Avalanche got burned by said cap (they were on the hook for bonuses to Joe Sakic and Rob Blake that counted against the cap and hampered the teams ability to sign free agents Adam Foote and Peter Forsberg, both who ended up signing elsewhere for more money), KSE's attitude toward the Avalanche and the NHL seemed to change. They still had some decent high-dollar signings (Ryan Smyth and Scott Hannan), but they no longer appeared willing to "overspend" on talent (Jose Theodore signing with Washington for not much more money being a classic example).

They were notorious about making honest, market-based offers to players but did not negotiate during the season (when players tend to have more leverage) and did not bend to demands that could be construed as bidding wars. Since 2008 the team has put for a "build from within" mantra following the successful models employed by the Chicago and Pittsburg franchises (be really bad for a while, stockpile high draft picks and talent, then be really good).

They finished third from the bottom of the league in 2008-2009, squeaked into the playoffs last season and were the 2nd worst team this season, all while carrying one of the league's lowest payrolls for three year's running.

I'm not sure it's a result of a change in philosophy or a change in how they perceive success in the salary-cap era of the NHL. It is important to remember that there is revenue sharing in the NHL and that there is an argument that a viable business model can be had by keeping costs low and being mediocre or even bad at times.

WH: I think that perception is pretty accurate, though it wouldn’t be fair to call him “cheap.” He believes in building through young talent, and isn’t afraid to spend top dollar to acquire them if necessary – witness the largest ever rookie contract, with $50 million guaranteed, given to Sam Bradford. But I doubt he’ll be the type to sign a bunch of mercenaries for a desperate one-year rush for a title.

A is for Arsenal: Do fans have any views on him getting so involved with Arsenal? Has his stake in Arsenal had any impact on your franchise’s finances?

NT: I don't see how his move to be a majority owner of the Arsenal can be a negative at all. Kroenke is building quite an impressive sports empire. The team is heading into the playoffs with a pretty nice buzz around it.

After this season though there are a lot of question marks. The NBA is heading into an owner lockout of the players as the NBA collective bargaining agreement needs to be re-negotiated. It's believed that Kroenke is a loud voice for wanting major changes in player salary. Nobody really knows how long the lockout will last and what things will look like on the other side.

When the NBA came back in 1998 from a lockout, players’ salaries really increased. In today's NBA, owners have been over-paying players and guaranteed contracts have really put some organizations in bad spots. So, the owners want change, but they are the ones who routinely sign off on ridiculous deals.

The Nuggets have a lot of key players that will be free agents and we'll see how far the Nuggets front office guys are willing to go to bring this great team back and how much Kroenke is willing to spend. If Denver re-signs their free agents it will be a great sign as the cost is probably going to be pretty high. This is a crucial juncture for the Nuggets - so we await what is going to happen with a lot of interest.

MDT: The salary cap and a change in philosophy likely have had more impact on the franchise than Kroenke's finances. There was a definite feeling in 2008 that money was being diverted from the Avalanche in an effort to make the NBA Nuggets better which enraged some fans.

Many still feel that the continued "build from within" approach is just a smokescreen for being cheap as he's enamored with his new "toys" in St. Louis and the UK. I don't think anybody thinks that he has a fixed amount of money that he's going to spend on his favorites, but I do think he's a shrewd businessman who has tried to leverage his various holdings to maximize their earnings and the NHL team is by far the least lucrative of those holdings (excluding lacrosse and soccer in the US) currently.

WH: If he was hurting for money, I think we would have felt it in the draft room last year. The Rams could have justifiably gone after Ndamukong Suh with that pick (and not Sam Bradford - JB) and saved themselves eight figures in the process, if economics were the only driving factor. Kroenke has a long history of managing lots of money well, mostly through real estate, and I don’t worry too much about his getting in over his head on a deal.

A is for Arsenal: Do you have any thoughts about what motivates him to get involved with sports teams? Is he just a sports nut or is he seeking a good return on his financial investment?

NT: I always heard the following phrase of: You don't become an owner of a professional sports team to make money.

I don't know how much Kroenke profits/loses on his teams and I don't really care. So long as he keeps a good basketball team in Denver and makes moves to get the Nuggets a championship, I'm happy. I don't know what Kroenke's motives are for building such an impressive sports empire, but it is just that - impressive. I shouldn't say I don't care what moves Kroenke makes outside of the Nuggets because they could affect the team at some point.

Right now I feel pretty bad for hockey fans because the Colorado Avalanche haven't been very competitive recently. I don't know what the issues are with that team exactly, but there are a lot of Nuggets fans that are Avs fans and are not happy with how the hockey team is being run. A lot of people feel like the Avs are being neglected and not spending the money they need to bring in good players. If that started happening with the Nuggets we'd have a whole lot of angry readers and with so many questions facing the Nuggets after this season we'll see what happens. But right now I feel like Nuggets Nation is in good hands.

MDT: I don't know personally, but he's been willing to spend money to make it and he's been very careful in the franchises he's obtained.

He's built an empire around his Colorado holdings as he owns two of the facilities that his teams play in and the regional TV network that broadcasts Nuggets, Avalanche, Rapids, and Mammoth games (and the Crush when they were active). He's also got his fingers in ticket sales with his TicketHorse operations in Colorado.

He's generated an extremely tight revenue stream centered around his Colorado holdings and it appears to be a sound business model. His NFL holdings (like all NFL teams) is a license to print money as that league is ridiculously lucrative. In the end it's extremely likely that he’s a millionaire with an interest in sports and making money in sports.

WH: I think he might actually be a bit of both. He isn’t a nut like Mark Cuban (the ‘larger than life’ owner of the Dallas Mavericks NBA team – JB), who will sit in the stands wearing the jersey and yelling at the team, but he seems to legitimately love his sports. At the same time, though, he is definitely building a substantial sports empire, and I doubt he’s losing money along the way. (For reference: The Denver Post wrote a good overview of his sports & business interests a few years ago).

A is for Arsenal: As you can probably tell from the previous question, there is a bit of suspicion of ‘benefactors’ over here, particularly ones who seemingly have no natural connection with English football. Why do you think Kroenke chose Arsenal?

NT: I can't answer this one - I don't know the first thing about Arsenal.

MDT: If I had to guess, it's because he sees a good opportunity for either short or long-term earning potential.

WH: This is one question I just can’t offer much insight into. He has strong ties in Denver and St Louis, but I don’t know what connects him to Arsenal at all. Obviously, the Premier League has been attractive to several American sports franchise owners of late, and Arsenal has a storied history that dwarfs that of any of the other teams he owns. I guess the devil’s advocate might ask “Why wouldn’t he be interested?”

A is for Arsenal: Arsenal is one of the highest profile clubs in Europe but have not won a trophy since 2005. Our head coach was previously very successful and is described as ‘wonderful’ by Kroenke. However, supporters increasingly regarded him as stubborn – he is perceived to be sacrificing glory by sticking to his belief in developing youth players and playing attractive football instead of winning at all costs. A lot of fans want more money to be spent on bringing experienced leaders into the team to help push the young talent we have. Given your knowledge of how Kroenke operates, how do you think he will respond to that situation?

NT: That's an interesting dilemma. When Kroenke took over the Nuggets they underwent a coaching change in 2002 and brought in a no-name guy who was well respected inside basketball circles with Jeff Bzdelik.

I was under the impression that Bzdelik was brought in more because nobody else wanted the job than anything else. He had a tough job on his hands with an awful roster in the 2002-03 season and the team won just 17 of 82 games. But the next season coach Bzdelik had a new roster with Carmelo Anthony and other guys and that team won 43 of 82 games and went to the playoffs.

Rumors started to swirl after that season that perhaps Kroenke wanted a bigger name coach to come in and takeover. ESPN analyst George Karl appeared to be that target and was hired in 2005. I think Kroenke believes a team finds success by starting at the top - with a good coach. Kroenke won’t hesitate to replace the coach if he feels like he needs to make a change, but I also believe that he puts the best people in charge to run things and gives them a fair shot to turn things around.

Hopefully Kroenke will turn things around for Arsenal quickly as I know how passionate people are about their football team. And I have a feeling, that like with his other teams, Kroenke won’t be comfortable until he feels he has the right people in charge.

MDT: It's funny you mentioned the youth movement and development along with the style of play. One of the over-arching complaints about the Avalanche coming out of the lockout was that the team had gotten away from "Avalanche hockey" with a change in styles.

After the dismal 2008 season, the franchise recommitted themselves to getting back to that "Avalanche" style. Their drafting and signings since then have indicated that IS a priority. In the past, the day-to-day operations of the team have been left to the experts, not Kroenke. He's supported management and personnel decisions 100% and it appears his son will as well.

Avs fans are also aching for some veteran leadership as well with the retirement of two idols in Sakic and Foote and a bevy of young, talented players who lack experience. For two seasons we've been asking and for two seasons we haven't seen any real moves to address the veteran leadership issue.

In all likelihood, someone at Arsenal is touting the company line of youth and beautiful games, but it isn't Kroenke's idea. He's trusting in the people under him to set priorities and make decisions. And that sounds a lot like the current situation for the Avalanche. Now if we see that same model creep into the Nuggets (which he doesn't "technically" own anymore) or the Rams, I'd start thinking it was a KSE philosophy and not just coincidence.

WH: I wouldn’t expect him to make an immediate break from the current regime. Kroenke is not known as a hands-on (or ‘meddling’) owner in the first place, and from the sound of it the current philosophy of patience and building through youth fits his M.O. After all, he was perfectly willing to let Sam Bradford emerge as the starting quarterback from Week 1 of his rookie season, never pushing for an “established” veteran QB like Donovan McNabb to take the reins, or even to offer in-camp competition.

However, Kroenke is in this game to win, and I don’t see him being satisfied sitting back and counting gate receipts while running a team of perennial also-rans who act as a talent farm for bigger clubs. My guess is that he will lean towards giving the current regime a full season of working under him before he makes any evaluations or major changes in course.

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