The caller (or the principal specified with the AS option) must have either CONTROL permission on the securable, or a higher permission that implies CONTROL permission on the securable. If using the AS option, the specified principal must own the securable on which a permission is being denied.
Grantees of CONTROL SERVER permission, such as members of the sysadmin fixed server role, can deny any permission on any securable in the server. Grantees of CONTROL permission on the database, such as members of the db_owner fixed database role, can deny any permission on any securable in the database. Grantees of CONTROL permission on a schema can deny any permission on any object in the schema. If the AS clause is used, the specified principal must own the securable on which permissions are being denied.