It’s well known that funds are tight at Arsenal. Wenger has hinted recently that more money available would mean more spending – unlike previously, when he’s claimed to be happy with what has been offered by the Board. But where to get some money from? I’ll tell you one way.

Before I go into the detail, let me start with a few basic background facts.

Fact 1: Arsenal have some rich shareholders. Usmanov, Fiszman, Lord Harris and Lady Nina B-S are all on the Sunday Times Rich List, and Stan Kroenke sleeps in a solid gold bed. Well, he probably doesn’t, but he could if he wanted to. So there’s plenty of money around the club, but it’s staying firmly in shareholders’ pockets.

Fact 2: The club’s turnover can cover the debts. Arsenal are most unlikely to go bankrupt, but they can only pay off the stadium debt slowly, and it doesn’t leave much to spend on big signings.

Fact 3: Arsenal have a huge wage bill. Arsène likes to pay everyone in the squad very good but not spectacular money. Right or wrong, that’s his method. Fine at Highbury when there was money left to buy a few experienced players every season; not so good now when there’s a whopping debt to pay off. It now seems obvious that whatever the club has been saying, Arsène’s spending has been very tightly controlled over the last couple of years.

Fact 4: The current Board like being in control and don’t want to lose their privileged positions.

Given those facts, what to do to get some cash? One way is a rights issue of new shares. I’ll explain in detail what that means.

The first problem here is that Arsenal shares are too expensive. Not that the club as a whole is worth too much, but the price per share is prohibitive because in terms of a business this size there aren’t very many of them. This doesn’t bother the current Board because a price of around £8,000 a share stops fans like you and me casually buying them on a whim, and makes it a much more exclusive group who have any say at all. Imagine how many shareholders would want to turn up at the AGM if we all had some. However, we’re assuming here that the Board want to help the cash situation, so the first thing to do is a share split.

Let’s say they do a ten-for-one split. All that means is it that for every one share held by anyone before the split, they’d now have ten shares. The company is still worth the same, so each share is worth £800 instead of £8000. No one has lost out. (In practice the price normally changes a bit on a split, often upwards, but for simplicity let's say it doesn't.) The proportion of shares held by each shareholder is the same, and the only difference is that the price is now in a range more people can afford.

There are around 63,000 Arsenal shares issued, but working on round figures for ease, let’s call it 60,000 ‘old’ shares. So after the split there are 600,000 new Arsenal shares. Previously the club was worth 60,000 x £8,000 = £480million; now it’s worth 600,000 x £800 = £480million. No different.

Now on to the rights issue: Arsenal announce that they will create 100,000 new shares which will be offered to existing shareholders – for every 6 an existing shareholder has they can buy one new one. (As an aside, I should add that ALL major shareholders, including our friends at Red & White Holdings, would have to be in favour of a rights issue for it to go ahead – but everyone involved wants the best for the club, right? Right? This would be a good way of finding out.) To encourage people to buy, the new shares are issued at a bit less than the market price, so say £750. Those not taken up by any shareholder will be offered to the public first, before being offered to other existing shareholders.

If all shareholders take up their allocation, then the proportion of the club owned by each person stays exactly the same – Kroenke can’t get one over on Usmanov, and vice versa. And there’s no need to worry about this being a trick to squeeze out small shareholders. All small shareholders can prevent their shareholding being diluted by taking up their new shares, though of course this costs them £750 a share.

Usmanov, Kroenke, Danny, Nina, etc can all do the same if they don't want their percentage reduced, but they don't have to – it depends what their cash situation and strategy is. Suppose Usmanov and Stan both want ultimate control: they will both buy their allocated portion of new shares, but Danny and Nina probably wouldn't (Danny’s keener on selling these days and Lady N has less cash). Some other shareholders probably won't either, so say 40% of the new issue now becomes available to the public – that's 40,000 shares available to you, me, every Arsenal fan at £750 each. As long as there are rules about who gets first option on these (us the supporters, or Usmanov/Stan) and how many per person – say a maximum of 50 or 100 – then the small shareholder group actually grows bigger and more powerful. And most fans think that would be a good thing.

If the public (ie you and me) don't want to take up all the leftovers then there could be a rule that either another existing shareholder can buy them or they can just remain unissued. Stan or Usmanov might prefer to take up any slack and increase their percentage, or they might not. Who knows? (They may not want to increase their shareholding over 30%, because stock exchange rules mean they would then be forced to make a bid for ALL shares. For those who care, there could be a further complication if some shares remained unissued after the big boys had taken up what they were originally allocated, so in practice an outside party might be required to underwrite the issue to ensure proportions couldn’t change in an unforeseen way for the biggest shareholders.)

Either way, as long as all the new shares are taken up then the club gets a cash injection of £75m. As the club's assets have increased by £75m then the total value of the club is theoretically now £555m, divided by 700,000 shares now issued, so each share is worth (£555m divided by 700,000 =) £792 (down from £800). Again, in practice things don't always work exactly as the theory says they should, but all other things being equal it won't be too far off.

So at the end of all that the club is £75m richer and can reduce debt, buy players, or a combination of both. In practice they’d probably announce that they were reducing the debt (to howls of protest from naive fans who believe anything they read), so that other clubs wouldn’t suddenly put players’ valuations up.

In summary a share split and rights issue means:
• Arsène gets money to spend
• All shareholders can demonstrate whether they really care about the club or just their own profit from it
• Supporters could buy into the club more easily, and do it knowing they were helping Arsenal rather than just lining another shareholder’s pocket

As far as I am concerned this is the best way to raise money, and with the right rules around who can buy, does not lead to an increased chance of a takeover by one investor.

Of course there are reasons why the existing Board may not be in favour of this, but if they are most concerned about the club they should do it. If they're most concerned about their own pockets, they probably won't. But on the bright side, Stan Kroenke has a history of investing in his sports teams to increase chances of success. He might see the benefit of this, and judging by his recent deals with Fiszman and the Carr family, not to mention the small numbers of shares he picks up in the open market regularly, he is still prepared to put his hand in his very big pocket.

So come on Stan. Arsenal needs you.