Besides owning football clubs, there aren’t many obvious connections between Arsenal owner Stan Kroenke and Wrexham co-owner Rob Mac.
Stan Kroenke is worth in the region of £16.5bn. Arsenal make up about £4bn of that figure, depending on who you ask, while the LA Rams (NFL), Denver Nuggets (NBA), Colorado Avalanche (NHL), Colorado Rapids (MLS) and a sprawling real estate empire account for the remaining value.
Rob Mac, while certainly no pauper compared to you or me, does not exist in the same universe as the 76-year-old owner financially. There are no reliable reports of his net worth, but you’d likely have to add at least two zeroes to get from there to £16.5bn.
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He does, however, clearly have a good nose for investment and a cultural cachet that has proved enormously lucrative in football finance.
Wrexham owner Rob Mac at the 18th Annual Go Gala
Photo by Araya Doheny/Variety via Getty Images
Alongside co-investor Ryan Reynolds, Mac – who until recently went by ‘McElhenney’ – has turned Wrexham into a global brand almost by brute force.
Their £2m takeover of Wrexham in 2020 and subsequent commercial strategy has been genius. Whatever your personal opinions about the Welsh side’s Hollywood approach, that much is undeniable – just look at their reported valuation of the club…
The Wrexham owners are said to be seeking a new minority partner at a valuation of £350m. That’s a 17,400 per cent increase in five years, or about 70 times the rate that Bitcoin has risen in the same period.
So, you might be inclined to trust Mac, 48, when he signals what he thinks makes a good investment.
His portfolio includes a shareholding in Cosm, the £750m-valued ‘shared reality’ company which also lists Kroenke and Crystal Palace co-owner David Blitzer among its investors.
Arsenal owner Stan Kroenke attends an NFL match between New Orleans Saints and Los Angeles Rams
Photo by Sean M. Haffey/Getty Images
If that name sounds familiar, it might be because you’ve stumbles across it on one of the many times it has gone viral over the last two years or so.
The Los Angeles-headquartered company has built a number of venues that immersivity screen live sports, using huge LED dome screens to create an in-stadium feel for fans.
Currently, the company has just two venues, both in the United States: LA, California and Dallas, Texas. The first venue is on the site of the SoFi Stadium, home to Kroenke’s LA Rams.
However, Cosm want to go international and have raised hundreds of millions in capital to facilitate an expansion into Europe and beyond.
And in another recent big win, Cosm have extended their contract to screen the NBA. The new long-term deal will see basketball matches – including those involving Kroenke’s Denver Nuggets – in their venues into the 2030s.
The Premier League has a deal with Cosm too, through US rightsholders NBC. US-based Arsenal fans have been able to take in games as though they were in the Emirates from 5,500 miles away.
Wrexham fans in the States have had a similar luxury. The League One side have featured several times on Cosm’s screens, with the LA venue also featuring in Season 4 of their documentary, ‘Welcome to Wrexham’.
But why should you care? Well, because if you’re a fan of either Arsenal or Wrexham, this technology or similar initiatives in the same field could shape the financial future of both clubs.
Wrexham and Arsenal’s valuations are, on face value, very hard to justify. Yes, they both have global brand appeal and – to different levels – generate huge revenue. However, neither club is going to be consistently profitable until there is either a seismic structural or technological shift in football.
Kroenke is yet to take a penny out of Arsenal. True, his is seemingly a capital appreciation model wherein he will one day sell the club for a huge markup, but what about the next owner? That cycle can’t continue in perpetuity.
At some point, the club needs to make consistent profits in order to justify its soaring valuation. Otherwise, it’s what those in the finance biz like to call ‘Greater Fool Theory’, which is a precursor to a bubble bursting when it comes to market prices.
Arsenal pre-tax profit and loss figures graph
Arsenal profit and loss account Credit: Adam Williams/TBR Football/GRV Media
If Wrexham reach the Premier League, where booming revenues are sucked up in wages, transfers and agents’ fees, they too will have a similar problem.
However, there are many experts in finance and tech who will give you chapter and verse about the potential upsides of immersive technology in sport.
Put simply, they think it can super-size revenue by effectively monetising clubs’ global fanbases.
At the moment, clubs can sell merchandise and TV rights overseas, but they are limited by their geography when it comes to matchdays. Immersive technology, they think, could change that.
At the moment, it looks like a bit of a quixotic vision. But the list of investors betting big on Cosm suggests that, even if it is a moonshot, proves that there is real belief in its transformative potential.
Speaking exclusively to TBR Football earlier this year about Cosm and other similar technologies, Liverpool University football finance lecturer Kieran Maguire said: “There is a huge, almost evangelical belief that tech can be the next klondike in football revenue. I think Kroenke realises this.
“If you’re on the sell side of these products, you are always going to big them up – that is part and parcel of the industry. But Arsenal are in a strong position here, and the potential of this kind of technology is big.
“Arsenal can become early adopters of this sort of thing and combine that with the expansion of the Emirates. That could make what at present looks like a non-cost effective expansion worthwhile.
Updated chart showing the matchday incomes and stadium capacities of top English clubs
Matchday income and stadium capacities chart Credit: Adam Williams/TBR Football/GRV Media
“There is a genuine chance that this could change the parameters significantly, so it could be make or break for the stadium.
“With Cosm, you don’t need huge amounts of specific infrastructure to facilitate it, but for an even more immersive experience that is going to require more investment.”