Most liked posts in thread: Would you donate?

Nice thought .. until you do the sums.

Let's assume that the value Rupp places on the club is around the £6m mark - slightly more than what he paid for it but well short of some silly numbers which have been mentioned. Now let's assume that every adult and child season ticket holder, every flexi card holder and every occasional fan wants to buy shares in the club. For ease of maths, I'll assume this group is 15,000 - a ludicrously high number to illustrate the point.

Now the simple sums ..to subscribe for 25% of the value of the club would mean fans collectively being ready to part with £1.5 million. Or an average of £1,000 for each and every one of those 15,000 fans who might watch footie at VP at some time. As much as I like the idea of a fan-owned club, I don't believe that is realistic amongst a fan base who whinges when a slight increase in the price of our cheap tickets is ever mentioned.

 

I suspect that the companies you have shares in already create sufficient cash to fund their further development without recourse to their shareholders. They're run with a proper business philosophy of making profits and reinvesting those profits to develop the business. Occasionally you might find even in the best run companies that they have to seek further investment to grow the business. Typically that would come from commercial or investment banks but just occasionally shareholders are asked to dip into their own pockets to subscribe for a rights issue of further shares at a discount to the prevailing price to raise the extra cash. That's completely voluntary and if an individual shareholder chooses not to do so then their existing shareholding is slightly diluted because of all of the new rights issued shares. So far, it looks as though your companies haven't had to do this.

Lower league football is very different. Despite most being limited companies and most saying they are run on business like terms, the reality is very different. The vast majority do not make sustainable profits and its the profits which generate the cash to improve the club's infrastructure; buy players; relay the pitch; have a better academy and so on. That's why owners have to dip into their own pockets to do these things or occasionally go cap in hand to the bank for a loan or rely on windfalls from cup runs and sell-ons from the sale of players.

You mention Portsmouth and yes for several years they were owned by fans - collectively through their own supporters trust together with a handful of individual wealthy fans. They all invested a lot of their own money to get Pompey back on its feet but it all came to a crunch. About 3 years ago, they realised that to get Pompey out of the khazi division and hopefully to get back to the Championship and to refurbish Fratton Park would require a load of cash. They estimated over £10 mill in the next 3-4 years. And if they were successful in geting back to the Championship an even bigger load of cash would be required to establish them in that league. Nobody sensible was willing to loan them the money (who would given their recent financial history?) and the fans couldn't get enough support from themselves to raise that kind of money to advance the club. And they were therefore forced to put the club up for sale if it were to move forward. They were quite smart in their thinking and included legal commitments from the new owner to invest in the ground and in the players to give themselves a good chance of becoming a Championship club again. Their new billionaire owner agreed to these commitments and the fans's shares were sold to Eisner. And so far it appears to be working. Fratton Park is being refurbished and they've made the first step in getting promotion to Div 1.

Imo, it was a good outcome for the club and the fans. But it illustrates that if fans wish to take a shareholding in our club, it doesn't end there. If further investment is required to develop the club both on and off the pitch and there aren't profits being generated to fund that, the fan-shareholders would be expected to dip into their own pockets for the cash as some already expect the current owner to do. That's what shareholders, ie the owners of the club, are expected to do unless they simply want to tread water.

 

I suspect the experience of your parents' neighbour isn't that unusual. I bought shares in City when BFG was trying to raise extra money on top of all of the loans, leasing deals etc which the club had already negotiated. There were several hundred other fans who also did the same. We even received a dividend from the shares (as of course did the Richmond and Rhodes families) which imo was too good to be true and too high to be sustainable. I ran into GR (we lived quite close to him at the time) and I said what I believed. He told me I was wrong (in less polite terms). Three years later we were in Administration and the shareholders lost their 'investment'.

I don't believe fan ownership is a workable solution. There aren't many such arrangements around the world. Even in Germany where people believe there is more fan ownership of clubs, it isn't really true. Yes, most Bundesliga clubs have a club membership scheme which gives the fans some control over the direction of the club but they aren't shareholders in our terms. Ownership outside of Bundesliga 1 still resides with family groups, local banks and major sponsors.