Writer: Nick Simmonett
Date:Thursday May 24 2007
With all the rumours regarding Stan Kronke and a potential takeover of Arsenal, fans of the club are all expressing worries.
So, with everything that's going on we here at Vital Arsenal took it upon ourselves to seek an interview with someone who may be able to help.
We found that man, and put some questions to him from some of our members.
Here is the interview with the head of Colorado Rapids's supporters group, 'Class VI' Mr Mark Bodmer.
1)Is Kronke investing in sports franchises because of his love of Sport? Or does he see all the sports investments as a means to an end? (Super Gooner)
It's a little of both. Kronke is definitely a big fan of the NBA. But
KSE (Kronke Sports Entertainment) which owns the Avalance(NHL), Nuggets(NBA), Rapids(MLS), Crush(Indoor Football),Mammoth(LAX) as well as the Pepsi Center, Dicks Sporting Goods Park, and Altitude Sports (TV Station) is kind of the vision of a Entertainment Corporation based on Sports more than a love of the individual sports themselves.
2)What's the general opinion of Kronke in America and what does he mean to
the Rapids fans? (Prits)
Kronke is considered a good owner. He allows the people he hires to run his teams and he's not a cheap owner. In hockey and basketball, he's spent money on some of the biggest names in the game(Forsberg, Sakic, Roy, Selanne, Blake, Iverson, Anthony, Camby, K-Mart).
Before KSE purchased the Rapids, we were owned by Ansultz (AEG). While Philip Ansultz was solely responsible for putting a team in his home state, he owned lots of other teams including NY, LA, & DC, so the Rapids were always considered the least important among his teams. Subsequently, while the league would give NY and LA all sorts of big name players and bend the rules for them because of the importance of the market, Denver never got those kinds of considerations.
Kronke owning the team means we have an ownership that is solely focused on the Rapids.
3)How have the fortunes of the Rapids changed since Stan's arrival? (Rocky7)
It's actually been a painful ride. When Kronke bought the team, it was announced that we'd have a soccer stadium built for our team. Playing at Invesco Field (the NFL's Denver Bronco's 70,000 seat stadium) wasn't suitable for the Rapids. There was no atmosphere and always a negative perception even if 20,000 people showed up for a game. Everyone was elated.
But then the realities set in. Over the next two season, KSE put zero money into the Rapids other than the stadium. There was no marketing and every player we took was because of low salary. Everything was focused on the stadium. There was even a rumor KSE wished the team to be suspended until the stadium opened.
Amazingly, we were one game away from the MLS Cup Final in both of the two years before the stadium opened, but the fan base had dwindled down to 6,000. Before KSE, the Rapids would always have 10,000 or more at a game with 14,000 being normal.
But the new stadium has made the wait well worth it. He went the extra mile and put a roof on it. He listened to fans desires and opened a Cantina inside the stadium. People are loving the new stadium and the fan base is growing again.
4)What finances have been made available to the teams he owns in terms of player purchases? (Iceman10)
When it comes to the NBA and NFL, Stan has never turned down the right player because of salaries. In the NHL and NBA, you don't purchase players, but rather sign free agents or make trades. With both of those teams, he's brought in some expensive players and some of the biggest names in the game.
With the Rapids, they haven't invested in players yet. There is an MLS rule called the Designated Player Rule (aka Beckham Rule) where the team can sign one player outside of the salary cap rules. For Los Angles - Beckham. NY - Reyna & Angel (NY traded for another team's Designated Player Slot) Chi - Blanco. The Rapids have not taken advantage of this rule. They did attempt to sign Borgetti because he would make a big impact on marketing of the team(Colorado has a heavy Mexican population) but he signed with Cruz Azul. The team has stated publicly that to take advantage of this rule, it would have to make sense marketing-wise.
5)How much of a hands on role does he (Kronke) play in the general running of the club? Does he attend the matches regularly? (Idolx)
Stan Kronke is a hands off owner. He hires people to run the team, and then lets them run it.
6)What changes he has made in terms of marketing the club i.e club website, T.V stations etc? (Iceman10)
The first two years before the new stadium, marketing virtually fell to zero. Many games were NOT televised even though KSE had their own TV station in Colorado.
Since the new stadium has opened up this year, there has been a marketing blitz. You see advertisements on buses, in newspapers, on the radio, billboards, just about everywhere now.
7)Did he use leveraged buy-outs to acquire any or all of his US clubs? (FatOldDave)
The purchase of the Avalanche and Nuggets was a single deal and was an outright purchase. The Rapids purchase was an outright purchase, though ownership in MLS isn't quite normal. I'm not positive of the exact details - but it works out that a team owner owns 49% of his own team and a stack in all other teams in MLS.
I'm not sure about how the St. Louis Rams (NFL) deal went down, but I believe he was a major reason the team is in St. Louis.
8)If you have access to the annual reports, how much debt do the organisations have? (FatOldDave)
I don't have access. One thing about KSE - they are a very close nit organization and don't let information out they don't want out.
9)How much is Kroenke taking out in salary/bonus' etc? (FatOldDave)
It's hard to imagine that Kronke is taking much out at all. His wife is from the Walton family - which owns Walmart. So Stan is VERY VERY wealthy. But that kind of information isn't available to the public.
10)How big is The Rapids' fanbase in the U.S? And who are your key players?
The base is probably at 6,000 - meaning you'll always get at least that many no matter the day of the week or the weather. Normal games will draw 12-14,000. Some games with a big promotion like a double header or the game Beckham comes to Denver will sell out the 18,000 seat stadium.
In the past at Invesco Field (the NFL stadium) - on our independence day, there is a BIG firework show that goes along with the game and they've attracted 50-70,000 people to the game. And a double header with Chivas(Mexico) would draw 30,000.
The Rapids haven't been very successful in regards to winning or even scoring goals over their previous 11 years - and that's taken a toll.
Denver isn't an enormous metro area in the U.S. Population: 2.4 Million Rank: 21st
11) If he was to takeover Arsenal, do you think he is likely to pay off the £260Million debt the club have after building a new stadium? (Baxrom)
This is purely opinion, but I wouldn't think so. Stan Kronke and KSE are first and foremost a business. When he does things, it always makes sense business wise.
12)Does Kronke own 100% of The Colorado Rapids, or are there other
MLS has a unique business structure. It's a single entity business. What that means is an owner is buying into MLS. An owner (I believe, not positive) owns 49% of his own team, and has a stake in every other MLS team. So essentially, every owner in MLS owns a share of the Rapids.
MLS has a lot of controls over the individual teams. They are moving more and more financial decisions to the individual teams now that MLS, as a business, is no longer is great danger of folding. The Designated Player Rule (aka Beckham Rule) is an example of this - a team can spend whatever it wants on a single player outside of the salary cap rules.
13) And I have one myself. We've seen three Premiership clubs taken over by American tycoon's (Man United, Liverpool and Aston Villa). Of them, two have been lumbered with massive debt in order to fund the takeover (Liverpool and Man United). Do you think Kronke would do the same thing, or would he seek funds from his father-in-law, who owns Wallmart?
This is pure speculation, but I would guess that Kronke would follow the ead of the Glazier, Hicks, and Gillette. Kronke is actually a self made man through real estate - he was rich when he married his wife. I doubt he'd seek help from the Waltons.
I'd like to thank Mark Bodmer for taking the time to answer our members questions. He's been very helpful. I'd also like to wish The Rapids all the best for their forthcoming season.
Date:Thursday May 24 2007
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