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

Steadily down?

In retrospect, 2003 was a peak year at West Ham; not on the playing side (where they were relegated from the Premiership), but for supporter involvement in the management of the club.

Some long-term shareholders had decided to decrease the size of their holdings and these shares became available for purchase by supporters. This trend was not altogether welcomed by the directors who increasingly found themselves having to account for their decisions. As many of the new shareholders only owned a single share and took advantage of their right to attend general meetings, these events became less cosy and predictable. Especially so as some of those present were not always certain of the procedures to be followed. But they were cetainly liveley and interesting gatherings!

The opportunity for the ordinary supporter to be a shareholder disappeared at the end of 2006.

West Ham United Supporters Trust was formed in late 2001 and at its peak in 2003 had some 300 members. As previously mentioned on this site, it had its problems and only really flourished in a crisis. Its last recorded gasp was in January 2005. It must be admitted that there does not at the moment appear to be any great desire to build a long-term body to represent West Ham supporters.

Also at this time, the Hammers Bond Company (an unincorporated association of bondholders of West Ham United plc) was active. In November 1991, the Hammers Bond had been offered for sale in connection with obtaining finance for the development of the Boleyn ground. Although only 808 bonds were sold, the Bond Company became mainly a social organisation which could communicate the views of the bondholders to the football club management. Not perfect, but it certainly seemed to be effective.

Sadly, after the AGM in May 2008, nothing has been heard of the Bond Company. Letters and phone calls to West Ham have so far proved fruitless.

At the end of 2003, 'Whistle' appeared on the scene but after publication of the infamous 180 questions sent to the West Ham chairman, Terence Brown, in April 2004, the writs began to fly which, from the company's point of view, had the desired effect. 'Whistle' was silenced.

In the year ending 31 May 2006, the total emoluments paid to Terence Brown were over £1 million, about twice as much as might have been paid to the Chairman of a FTSE 100 company at the time.

On 21 Novemeber 2006, the sale of West Ham United plc to Eggert Magnusson and Bjorgolfur Gudmundsson for £85m was agreed. On 13 December 2007, Gudmundsson bought out Magnusson's holding. In June 2009, ownership passed to CB Holding, which was controlled by the Icelandic bank, Straumur.

In January 2010, David Gold and David Sullivan bought a 50% interest in the club, with an option to buy the remaining 50% in four years' time. The company was valued at £105 million including debt.

So not a very encouraging decade. But at least Premiership status has been retained, even if ordinary supporter ownership seems further away than ever. Perhaps this is the dark cloud before the silver lining.