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Next Game: Banbury Away On Friday March 29th Kick-Off 3.00pm

Saturday, December 27, 2014

Pay To Play

 
Andy Munsley looks back at the history of fan owned clubs.
 
They say history is written by the winners, but the Supporters Trust stories are far from all winners. Some of the early 'experiments' at fan ownership have failed and the Supporters Direct model of ownership is far from perfect. For every Chester or Telford there is a Bournemouth or a Notts County.
 
Northampton were the first fan-owned club in 1992 but, today, their Trust owns just 7% of the club and keeps a place on the board only by demand of the local Council as part of the deal that built their Sixfields stadium.

At Bournemouth the fans bought the club near death in 1997 and went on an ambitious stadium redevelopment that bankrupted the club once more after ten years of fan ownership. Their Trust was dissolved in 2010 as there was no one left to run it.

The Notts County Supporters Trust were the people that handed their majority stake in the club to the infamous Munto Finance. Having taken over the club in 2006, supporters voted in favour of the 2009 deal that wrote off £400,000 of loans for Munto to settle an outstanding £400,000 tax bill and other debts that the fans could not raise. Munto then reneged on most of their promises and disappeared into the night. Does that sound familiar?
 
Success stories like Wrexham needed to sacrifice ownership of the stadium to a local University to achieve a deal. Telford had to rely on the local Council to buy their stadium from the bank it was mortgaged to by the former owner. Chester also needed local Council assistance to get their fairly modern ground back to working order. None of these clubs are much beyond the infancy of ownership, the honeymoon period so to speak.
 
Exeter are beyond that period. It is ten years since they agreed a ten pence in the pound CVA to clear debts inherited from previous owners that were eventually jailed. An FA Cup trip to Old Trafford virtually cleared the balance in one fell swoop, but the club have spent the last five years trying to resolve the problems of financing the redevelopment of the ageing St James Park without much success.
 
Like Exeter, the new Hereford club hope to inherit an aged stadium in need of redevelopment. How do you finance that? How much is Herefordshire Council prepared to pump into Edgar Street to return the ground to full capacity and enable it to host football next season? Their financial issues are well known and there remains a small group of Councillors who would prefer the bulldozers to move in and give them a cash boost. You would think the larger the cost to the Council, the larger that small group of Councillors becomes.
 
Over at Portsmouth, their Trust owns 51% but does not have control of the boardroom. Just three of the seven Directors are from the Trust Board, meaning that the balance of power is in the hands of the twelve 'Pompey presidents' that invested large sums into the club. The Trust is protected by an agreement that any future sale of shares must be agreed by holders of 75% of the issued shares - giving the Trust a blocking vote against any undesirable new arrival as long as they retain 26% - and the club is protected as not one shareholder can claim a dividend on their holding so all profit goes back to the club.
 
At Portsmouth, to get their 51% stake, the fans had to raise nearly as much as their 'presidents' put in. Owners of football clubs have to put money in to call themselves that.
 
Supporters cannot expect 51% of the new club at Edgar Street to be Trust held without putting their hands in their pockets.