The two sides in football

The private
In the West Ham programme for 9 May 2010, David Sullivan (Chairman) wrote:
'In a few months' time we are considering a general shareholding where supporters can buy shares in the football club.'

On the West Ham website (13 August 2010), we read that the club has raised £4m in new equity through a placing of shares, primarily with new investors. These include John Harris and Daniel Harris (father and son), and also Terence Brown (former Chairman of the club).

If necessary, readers will be able to find out a little of the background of Mr Brown by using their favourite search engine. The welcome given by West Ham fans to this news must have been fairly muted.

Daniel Harris has joined the board as a non-executive director while Terence Brown becomes an honorary life president.

In case you, and Mr Sullivan, have forgotten, 'in a few months' time we are considering a general shareholding where supporters can buy shares in the football club.'

But perhaps not ordinary supporters.

The public
This side was represented by Members of Parliament speaking on behalf of their constituents in the Adjournment Debate on 8 September 2010: (the) role of football supporters in the governance of professional football clubs.

The debate was well attended by MPs, both listening and speaking, and also by club supporters in the visitors' area.

It was opened by Steve Rotheram (Liverpool, Walton) (Lab) who has the distinction of having two premiership clubs (Everton and Liverpool) in his constituency. The debate showed that MPs are well aware of both the importance of football in the life of their constituents and the nature of the problems which need to be tackled, particularly in connection with premiership clubs.

One gained the impression that MPs would be quite prepared to support the introduction of a legal requirement that supporters, if they wished, should be able to gain control of their clubs.

The bridge?
West Ham is currently owned by WH Holding Limited, a private limited company This structure is not appropriate for a large number of small shareholders.

But the most obvious alternative, a public limited company, would probably be unacceptable to the present owners.

What is needed is an intermediate body in which supporters could invest, and from which they could withdraw if necessary, sums of the order of £500 to £1 000 in absolute safety, until the money could be used to buy shares in the main company.

Finally, these members would be able, if they wished, to exchange the value of their investment for benefits of equal value provided by the main company, now the members' body.

Between the idea
And the reality
Between the motion
And the act
Falls the Shadow.

T. S. Eliot

A political solution for football?

Since July 2009, the posts in this blog have tried to indicate what I think may be a better way to run professional football clubs in England. In the lower divisions of the Football League and in non-league clubs, there has been some progress but usually only when a club has reached financial desperation.

In the Premier League, the clubs and the sums involved are so much larger that only an incremental approach is likely to be effective. Recently both Manchester United and Liverpool supporters have tried to change the way their clubs are run, so far without success. The money which would have to be raised is simply too large for a one-stage process.

There has always been a general recognition of the part that the local football club plays in the life of the community. In the past, there have been several political initiatives intended to promote this connection. I believe politicians have not been unwilling to help and indeed some legislation has been passed to provide assistance. But it has been largely unsuccessful, particularly with the larger clubs. Is there a key to unlock this financial barrier?

Suppose that instead of trying to raise all the money and transfer ownership in one stage (which would be the usual method in business), a football club could be bought gradually by its supporters. It could probably happen at present, except that, given a choice, the larger clubs would probably prefer not to have to deal with tens of thousands of small shareholders. In other words, they would be very reluctant to change.

So it has to be plan B. This would require a political initiative to compel a football club to sell a fixed number of shares at an agreed price to any person applying for them. Over time, the number of shares bought and owned in this way would become a majority. The small shareholders could then, if they wished, decide on the next stage of restructuring the company. The model of FC Barcelona might be used to guide them!

Keen readers will probably find lots of snags in this proposal. So please make your views known, particularly if they include suggestions for improvement. Remember that all six MPs who declared themselves as West Ham supporters replied positively to the original initiative by WHAM!

John Sweeney's summer brake?

Which was the most significant of the footballing stories this summer? Not, I think, except for Spain and South Africa, one concerning the FIFA World Cup. It is true that there were other countries such as England, France and Holland who made the headlines but not, I fear, for their skills on the pitch.

No, my vote would go to an unlikely source - a Panorama television programme shown on BBC1 on Tuesday 8 July at the unpromising hour of 10.35 pm, just three days before the start of the World Cup.

John Sweeney, a reporter and Tranmere Rovers fan, had prepared a devastating indictment of English football, particularly of the Premier League where the total debt is now £3.4 billion. This is greater than the total for the rest of European football.

Supporters of Sweeney's case included:

Dave Boyle, Chief Executive of Supporters Direct, 'English football (is) groaning under the weight of unsustainable debt';
Andy Green, financial analyst, 'Glazer core business in USA got it absolutely wrong';
Dave Wheelan, Chairman, Wigan Athletic FC, 'Got to stop. Debt in Premiership is unsustainable. Wigan next season will break even. No more debt; what goes out must come in'.

Among the people and organisations who declined to appear (no great surprise!) were:

The Football Association, the Premier League, David Gill (Chief Executive, Manchester United), the Glazer family (father and six children), and Hugh Robertson (Minister for Sport) who was concentrating on our 2018 bid for the World Cup!

Football would probably not be top of the list of concerns for the politicians at the moment. But in the end, the solution to football's woes will probably have to be political. Most clubs are unlikely to volunteer to change. Few executives and directors are natural democrats. But change is needed if a financial catastrophe is to be avoided.

Next time
A political solution for football?

Why did West Ham United Supporters Trust fail?

West Ham United Supporters Trust (referred to as WHUST) is the trading name of West Ham Supporters' Society Limited, IP29300R, first registered on 24 October 2001 and now dormant.

These notes are based on the only documents (no longer available) which could be found on the web. The information provides an insight into the likely reasons why WHUST has not survived. This is of obvious importance to WHAM! who would not wish to repeat any mistakes made by WHUST.

At the WHUST AGM in September 2003, it was made clear that the Trust "could not veer from its pro-fan agenda and therefore could never join the anti-Brown campaign".

It is likely that the fate of WHUST was sealed from that date as the West Ham Board, and the fans, realised that the 'revolutionary' forces did not have enough votes and the support of major shareholders to bring about change.

Weaknesses of WHUST revealed in the documents available

1. A shortage of active members
Amanda Matthews (who re-appears later in connection with the "Stand up, sit down" campaign) says that, of the original members, only two remain. On 15 January 2004, she appeals for more help for the 8 active members.

2. A lack of focus
It can't make up its mind if its main purpose is to raise funds to buy shares so that it can influence the football club or to act as a forum for the whole range of opinions you can expect from football fans.

3. Poor use of the resources it does have
Much effort is spent in replying to every point raised by fans on the website.

4. Some dotty ideas
These probably appear as a consequence of other weaknesses. For example 'we do have a healthy amount in the bank at our disposal, which we have earmarked to use to double our membership, in doing so will then be able to invest in more shares'.
But supposing this does not produce any new members? Or very few? What then, with no funds, is the future of the trust?

5. A lack of financial control
There is no indication that priorities have been properly assessed and finances directed accordingly, in other words having a plan with a realistic budget.

6. A lack of influence
As someone pointed out (18 September 2003), with just over 300 members at £20 each for each of the two years the Trust has been running, the total raised equals £12 000. Spending just half of that could have bought (21 May 2003), at £3 a share (including dealing costs), 2 000 shares. The Trust had 200!

Every effort has been made to ensure that the facts in this analysis are accurate and that the comment is fair. If you would like to discuss the matters raised, please respond, either on this site or by direct communication.