I thought any one can buy share, when they come on the market so why have a law. This makes no sense.
Because, in the main, football clubs are not public companies and their shares do not get listed on stock exchanges. Although Arsenal is an odd one with shares very occasionally being available on ISDX. One Arsenal share was traded on 12th May. The mid price is £1,587,500.
I thought any one can buy share, when they come on the market so why have a law. This makes no sense.
Because, in the main, football clubs are not public companies and their shares do not get listed on stock exchanges. Although Arsenal is an odd one with shares very occasionally being available on ISDX. One Arsenal share was traded on 12th May. The mid price is £1,587,500.
Let's pretend RD is about to offer the trust a 10% stake in CAFC for a "fair" price.
How would the trust raise the funds to cover 10% of the annual losses? How would any group of fans?
Yes, you point out what appears to be the big snag in Efford's plans - at least for clubs in the top two divisions. The " value " of these clubs has rocketed in the last ten years. It would probably work ok in the lower leagues though. I could well imagine that at Sheffield United the cost of 10% might be half a mill and that a trust would raise that, especially if a few well off fans chipped in quite a lot ( which is what happened in the CAFC share offer in the 90s.
Indeed but I already mentioned this earlier, sorry I can't change the title of the thread.. and its not that I think its not doable, its more why would you. The big deal in this for a club like our is the 'golden' share - getting on the board, without having to buy 10% etc
Let's pretend RD is about to offer the trust a 10% stake in CAFC for a "fair" price.
How would the trust raise the funds to cover 10% of the annual losses? How would any group of fans?
Yes, you point out what appears to be the big snag in Efford's plans - at least for clubs in the top two divisions. The " value " of these clubs has rocketed in the last ten years. It would probably work ok in the lower leagues though. I could well imagine that at Sheffield United the cost of 10% might be half a mill and that a trust would raise that, especially if a few well off fans chipped in quite a lot ( which is what happened in the CAFC share offer in the 90s.
Let's use Charlton as an example, we lose what, 6m a year, where does the trust find 600k a year? It's gonna take more than a few wealthy fans to come up with that.
Let's pretend RD is about to offer the trust a 10% stake in CAFC for a "fair" price.
How would the trust raise the funds to cover 10% of the annual losses? How would any group of fans?
Yes, you point out what appears to be the big snag in Efford's plans - at least for clubs in the top two divisions. The " value " of these clubs has rocketed in the last ten years. It would probably work ok in the lower leagues though. I could well imagine that at Sheffield United the cost of 10% might be half a mill and that a trust would raise that, especially if a few well off fans chipped in quite a lot ( which is what happened in the CAFC share offer in the 90s.
Let's use Charlton as an example, we lose what, 6m a year, where does the trust find 600k a year? It's gonna take more than a few wealthy fans to come up with that.
Let's pretend RD is about to offer the trust a 10% stake in CAFC for a "fair" price.
How would the trust raise the funds to cover 10% of the annual losses? How would any group of fans?
Yes, you point out what appears to be the big snag in Efford's plans - at least for clubs in the top two divisions. The " value " of these clubs has rocketed in the last ten years. It would probably work ok in the lower leagues though. I could well imagine that at Sheffield United the cost of 10% might be half a mill and that a trust would raise that, especially if a few well off fans chipped in quite a lot ( which is what happened in the CAFC share offer in the 90s.
Let's use Charlton as an example, we lose what, 6m a year, where does the trust find 600k a year? It's gonna take more than a few wealthy fans to come up with that.
Its an awful idea.
I don't agree. I'd say it is an idea which is flawed, but well worth discussing in the House of Commons, so that a better version can eventually be enacted. If you take Swansea's example, they had to find "only" £50k. Swansea has been well run and now regularly makes a profit. The Trust banks the dividends, so that it can maintain its 20% share as and when capital is increased.
Let's pretend RD is about to offer the trust a 10% stake in CAFC for a "fair" price.
How would the trust raise the funds to cover 10% of the annual losses? How would any group of fans?
Yes, you point out what appears to be the big snag in Efford's plans - at least for clubs in the top two divisions. The " value " of these clubs has rocketed in the last ten years. It would probably work ok in the lower leagues though. I could well imagine that at Sheffield United the cost of 10% might be half a mill and that a trust would raise that, especially if a few well off fans chipped in quite a lot ( which is what happened in the CAFC share offer in the 90s.
Let's use Charlton as an example, we lose what, 6m a year, where does the trust find 600k a year? It's gonna take more than a few wealthy fans to come up with that.
Its an awful idea.
I don't agree. I'd say it is an idea which is flawed, but well worth discussing in the House of Commons, so that a better version can eventually be enacted. If you take Swansea's example, they had to find "only" £50k. Swansea has been well run and now regularly makes a profit. The Trust banks the dividends, so that it can maintain its 20% share as and when capital is increased.
How many other clubs, in the entire pyramid turn a profit?
Could CAST raise 600k a year? 60k a year?
@razil the 'golden share' is certainly, in my opinion a much better idea, although any place at the table with no shares will have little to no power, surely?
Let's pretend RD is about to offer the trust a 10% stake in CAFC for a "fair" price.
How would the trust raise the funds to cover 10% of the annual losses? How would any group of fans?
Yes, you point out what appears to be the big snag in Efford's plans - at least for clubs in the top two divisions. The " value " of these clubs has rocketed in the last ten years. It would probably work ok in the lower leagues though. I could well imagine that at Sheffield United the cost of 10% might be half a mill and that a trust would raise that, especially if a few well off fans chipped in quite a lot ( which is what happened in the CAFC share offer in the 90s.
Let's use Charlton as an example, we lose what, 6m a year, where does the trust find 600k a year? It's gonna take more than a few wealthy fans to come up with that.
Its an awful idea.
I don't agree. I'd say it is an idea which is flawed, but well worth discussing in the House of Commons, so that a better version can eventually be enacted. If you take Swansea's example, they had to find "only" £50k. Swansea has been well run and now regularly makes a profit. The Trust banks the dividends, so that it can maintain its 20% share as and when capital is increased.
Surely, it makes far more sense, to discuss a sensible version, from the off ?
All this will do, is switch most of the MP's off and make them less receptive to a sensible proposal.
Waste of time, unless he drops the 10% proposal.
I mean if the government wanted to discuss a £10M IHT threshold, what is the point ?
I can understand why Swansea are held up as the example and the inspiration because they have obviously got things right. However, i have a growing nervousness on these kind of approaches for a number of reasons:
1. I really do think you need to be in severe problem position for a Trust/ Supporters Group to properly come into play and be both effective in a positive sense in terms of organisation and assisting the club, but in gaining the wider respect and support of supporters.
2. Swansea could well have 'got lucky'. The timing was right, and everything has moved in a positive path since. Had there been a negative impact (a financial loss to deal with, a move backwards on the pitch), i don't know whether they would have been anywhere near as successful. Despite having a perceived perfect model, Swansea have just 1,300 Trust members.
3. Money has gone crazy, even in the last ten years. The level of investment needed now is just ridiculous.
4. The impact of social media now as opposed to 10 years ago has proven to be a far more negative hiderence instead of a positive tool in terms of 'supporter' promotion.
5. It potential works in a good scenario, but what happens in a bad scenario? Not all people who have put money in are welcoming to being told what to do by people who haven't.
I just think supporters groups having stakes in clubs (other than in an interim crisis period) is in most cases, hugely problematic. The important thing is getting structures right where there is a good joined-up approach between ownership, club employees and supporters, with club owners and employees taking an inclusive approach with fans, and everyone working together in the right direction to improve the status, success, feel, and balance sheet of the club.
I think Germany sets the example and seems to work well there where fans have 51% of most clubs. If it works there why not here? Sure Efford's not proposing that but its a start.
As for 10%, well for some clubs it fits some it doesn't, we shouldn't expect everything to work for every club including relationships with management who may or may not see a value in it.
As for Trusts, there has been a massive growth in this area, as a pooling of fans interests. I agree social media is a challenge, and of course you can get good and bad people on it, just like anything else.
But there is so much speculation and money going down now in the game, nothing is perfect but I can't see a better way of representing fans interests and for protecting clubs in the long term, indeed you could argue that social media is so damaging in some ways if misinterpreted that Trusts have an important role to play. Also the crises Dan talks about can be just around the corner for any club, particularly at our level, and ongoing in the case of debt building etc
In this case Trusts or a recognised fan group subject to strict rules and practices are a way of trying to assert a professional approach to taking part with the Board, altho indeed it has also worked without that buffer at Charlton no less.
@AFKABartram regarding Swansea Trust membership, the last time I spoke with them their paid membership- which gets you a vote - was even less than that. More like 800. However when they first formed it was 3,000, on an average gate of 5,000. Their explanation is simple. Everything seems to be fine, so many are content just to turn up to watch footie. As we have discussed here many times, there is only a small proportion of fans of any club who are ready and interested to "get involved" unless there is a crisis. I understand that it's a similar story in Germany, in most clubs only about a 1,000 or so will be active. The difference is that if an investor with funny ideas comes along, say, one who wants to make the club part of some network, he cannot just impose his idea because he can only buy 49%. RD failed to convince the members of Carl Zeiss Jena that his network idea as good for them. But he shrugged his shoulders and is happy to get on with the St Truiden style commercial development of the stadium.
Unfortunately it's difficult to imagine how the German model can be implemented here. But its success is undeniable, so the lessons are there to be drawn.
What's interesting about Germany is that the revenues are smaller than the Premier League, but their profits are significantly higher. It works. I'm not intricately knowledgeable about its machinations, but it strikes me that a club majority-owned by its members is self-policing in terms of finances. Comparing it to any other business, the other 49% is effectively available to investors, who will only profit if the club profits or their share is sold. It makes a lot of sense - the issue English football faces is the equity dilution for 'investors' (current owners) of moving to a model like this, and in particular the fact that English football loses money hand over fist, a level of risk typically solved by selling up.
I think what Efford is suggesting is flawed - albeit mostly because we're recovering from excesses rather than dealing with well-run businesses - but he's heading in the right direction. To me, what would be ideal is for 50+1 to be achieved in the long term through dilution of equity at each sale, and/or periodically, handing fans equity for nothing. The value of owners' investment probably hasn't changed to an extent where it no longer makes business sense to be invested, although this is where the losses are a real headache - for both investors and members.
I'm thinking out loud here a little, to be honest, certainly not fully formed thinking - how ideal it would be to start a football club and invite investment to a maximum of 49% - but we're starting at the other end, sadly.
Comments
Scroll down and there is some information as to why a 10% shareholding can be useful.
It goes without saying that the greater the shareholding the better of course but, as can be seen in the link, 10% can be useful.
How would the trust raise the funds to cover 10% of the annual losses? How would any group of fans?
Its an awful idea.
Could CAST raise 600k a year? 60k a year?
@razil the 'golden share' is certainly, in my opinion a much better idea, although any place at the table with no shares will have little to no power, surely?
All this will do, is switch most of the MP's off and make them less receptive to a sensible proposal.
Waste of time, unless he drops the 10% proposal.
I mean if the government wanted to discuss a £10M IHT threshold, what is the point ?
Be realistic.
1. I really do think you need to be in severe problem position for a Trust/ Supporters Group to properly come into play and be both effective in a positive sense in terms of organisation and assisting the club, but in gaining the wider respect and support of supporters.
2. Swansea could well have 'got lucky'. The timing was right, and everything has moved in a positive path since. Had there been a negative impact (a financial loss to deal with, a move backwards on the pitch), i don't know whether they would have been anywhere near as successful. Despite having a perceived perfect model, Swansea have just 1,300 Trust members.
3. Money has gone crazy, even in the last ten years. The level of investment needed now is just ridiculous.
4. The impact of social media now as opposed to 10 years ago has proven to be a far more negative hiderence instead of a positive tool in terms of 'supporter' promotion.
5. It potential works in a good scenario, but what happens in a bad scenario? Not all people who have put money in are welcoming to being told what to do by people who haven't.
I just think supporters groups having stakes in clubs (other than in an interim crisis period) is in most cases, hugely problematic. The important thing is getting structures right where there is a good joined-up approach between ownership, club employees and supporters, with club owners and employees taking an inclusive approach with fans, and everyone working together in the right direction to improve the status, success, feel, and balance sheet of the club.
As for 10%, well for some clubs it fits some it doesn't, we shouldn't expect everything to work for every club including relationships with management who may or may not see a value in it.
As for Trusts, there has been a massive growth in this area, as a pooling of fans interests. I agree social media is a challenge, and of course you can get good and bad people on it, just like anything else.
But there is so much speculation and money going down now in the game, nothing is perfect but I can't see a better way of representing fans interests and for protecting clubs in the long term, indeed you could argue that social media is so damaging in some ways if misinterpreted that Trusts have an important role to play. Also the crises Dan talks about can be just around the corner for any club, particularly at our level, and ongoing in the case of debt building etc
In this case Trusts or a recognised fan group subject to strict rules and practices are a way of trying to assert a professional approach to taking part with the Board, altho indeed it has also worked without that buffer at Charlton no less.
http://www.bbc.co.uk/sport/0/football/33409390
Unfortunately it's difficult to imagine how the German model can be implemented here. But its success is undeniable, so the lessons are there to be drawn.
I think what Efford is suggesting is flawed - albeit mostly because we're recovering from excesses rather than dealing with well-run businesses - but he's heading in the right direction. To me, what would be ideal is for 50+1 to be achieved in the long term through dilution of equity at each sale, and/or periodically, handing fans equity for nothing. The value of owners' investment probably hasn't changed to an extent where it no longer makes business sense to be invested, although this is where the losses are a real headache - for both investors and members.
I'm thinking out loud here a little, to be honest, certainly not fully formed thinking - how ideal it would be to start a football club and invite investment to a maximum of 49% - but we're starting at the other end, sadly.