Owner, majority shareholder or something else?
If you’ve read any books that tell the history of Arsenal (or even Chelsea or Tottenham) it is very likely that you would have read about Henry Norris arriving like a knight in shining armour to save Arsenal from extinction in 1910. Some histories will say that he bought the club, some will say that he was the majority shareholder.
However, neither is correct. And by quite a considerable way.
As a public limited company (incorporated on 26 April 1910), Arsenal are duty bound to lodge their annual accounts as well as a register of shareholders with Companies House. These records are available for all and sundry to see, albeit at a price.
On The Arsenal Collection website we have published two of these sets of documents that help to show how much of Arsenal Henry Norris actually owned. We have some documents from other years but they are only partial copies so we didn’t want to publish them until we had the full documents, which will happen in due course.
Early in 1910 it became apparent that Woolwich Arsenal FC was in financial difficulty. Over the past decade they had received help from local businessman and major shareholder George Leavey. At the half-yearly meeting in January he proposed that the limited company that ran the football club be put into voluntary liquidation and a new company formed to take over. The full story of this is told in Woolwich Arsenal 1893-1915: The Club That Changed Football.
The long and short of it was that the new company was undersubscribed and was on the verge of collapse before three Fulham directors – Henry Norris, William Hall and William Allen – stepped in to save Woolwich Arsenal. Allen soon dropped out but Norris and Hall stayed the distance.
Of the 6,600 shares that were made available to the public only 1280 were allotted. The two biggest shareholders were Henry Norris and William Hall with 240 each. Some simple maths shows us that both men each owned 3.6% of the available shares or 18.75% of the allotted shares. At this point Henry Norris was a long way from holding a majority of the shares, let alone buying the club outright. The next biggest shareholder was George Leavey, the man that had kept the club afloat for most of the previous decade, with 100 shares.
The first complete document that we have is from 1913. This shows that 1509 shares had now been allotted. Norris and Hall had both increased their shareholding to 340, each buying 100 more shares. This now gave each of them 22.5% of the allotted shares.
Roll forward eight years and the directors have done a sterling job with bringing in new investors. We now see that 3,175 shares have been allotted. Henry Norris still had the 340 shares from 1913 but William Hall now had 345 shares, five more than Norris. Not only has Norris’ share of the club been reduced to 10.7% but he was now only the second biggest shareholder!
Although we don’t have the full breakdown of shareholders, we do know that in September 1927 Hall had increased his shareholding to 508 and Norris to 487 plus five more in his wife’s name. Even if the same 3,175 shares from 1921 were the only ones in circulation, this would mean that Norris’ share of the company was only 15.5% even if we include his wife’s shares.
At this point Norris and Hall were banned from football and excluded from holding a position on the board of the club. Hall sold all of his shares to Percy Boyden who was chairman of Leyton Orient. That is another story, though! Norris sold ten shares before his death in July 1934, with the club’s accounts in August 1934 showing 477 shares in his name.
Therefore, Henry Norris never bought Arsenal, was far from ever being the club’s majority shareholder and it is highly unlikely that he was ever solely the club’s biggest shareholder.
What many football fans of today don’t realise is that this method of ownership was typical for pretty much every football team before 2003 when Roman Abramovich purchased Chelsea lock, stock an barrel so they will talk about Arsenal’s owner being Henry Norris because he was known as being involved in the ownership but not knowing that he didn’t own the club.
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Copies of our books Royal Arsenal – Champions of the South and Arsenal: The Complete Record 1886-2018 are still available from the publishers.
What happened to Norris’ shares after his death?
They were sold by the executors of his estate some time between 1934 and 1948, I’ll look into it and let you know if I find out.
Do you know why 400 of the 7,000 weren’t offered to the public? Were they already split between Norris and Hall, or was there some other reason? Because eventually (when David Dein turned up) the full 7,000 were issued.
I can’t find anything in the newspapers at the time to say why 400 shares were held back.
For the 1893 share issue only 3000 of the 4000 shares were originally offered to the public. In 1899 a number of the unsold shares were issued as “preference” shares. These shares were were paid a dividend ahead of those previously sold. It could be that the 400 were held back so that the directors could offer a similar incentive in the future if need be.
I guess it would only be in Board meeting minutes. I just have a suspicion from info I got from Sally Davis ages ago that it might be Hall and Norris controlling voting rights in some way. Is there anything about voting in the prospectus?
The decision to offer only 6,600 shares was made before Norris & Hall became involved.
The prospectus was put together by George Leavey and a number of local businessmen in April 1910. The big change from the Articles of Association of the 1893 company was that a shareholder would need to hold at least 25 shares to be considered a director. In 1893 anyone holding just one share could be a director, having been negotiated down from five shares originally.
I assume the reason for this would be to give a stable board of directors. Between 1893 and 1910 the board was in constant flux which meant that policies continually changed and directors would try to accommodate the views of as many shareholders as possible to try to ensure they kept their place on the board.
When the share issue failed in May 1910, it was at this point that Norris, Hall & Allen became involved.