Labour’s Proposals For Fan Ownership – Are They Credible?

The Labour Party’s commitment to legislate for partial fan ownership published today by Clive Efford, Shadow Sport Minister, is admirable for its intent but worryingly short on detail says Mike Dyer, Director of Portsmouth law firm Verisona Law .

Dyer said that “there is a tendency to think of Football Clubs as being somehow different from any other business organisation.” In many respects, perhaps they are, but the underlying fact is that they are companies and as such bound by Company Law in the UK.

The proposals do not seem to address the fact that fundamental changes would be required to the Companies Act 2006 surrounding (in particular) Shareholder rights.

For example, the proposed right for a Supporters Trust to appoint and remove Directors whilst only being a 10% Shareholder represents a significant departure from the present legal position.  As the law currently stands, a Shareholder with only 10% of issued shares would not have such a right unless there is a Shareholders Agreement in place (a document setting out various terms between Shareholders and regulating the voting rights on certain issues).

Without such an Agreement, a 10% Shareholder will be unable to pass the necessary resolutions to give effect to this “right” without new Company Law legislation.

I sincerely hope this proposal is not just a poorly considered populist vote catcher – but if it is to be treated as credible then significant further detail of the proposal is needed.

Mike Dyer

Director, Verisona Law

The changing face of community ownership in Scottish Football

At the weekend prominent Ayrshire Businesswoman and Kilmarnock fan Marie Macklin gifted more than 45,500 of her shares in the club to the Killie Trust supporters group.

That the BBC reported on this fact and that most of the newspapers featured the story, says so much about the changing face of Community Ownership in Scottish Football clubs. I am sure that if this had happened just three of four years ago then it would have struggled to get a mention even in the local papers.

Macklin, whose property company has previously expressed interest in owning the Scottish Premiership club, has kept hold of 1,000 shares but most importantly she hopes that, by giving her shares to the Killie Trust, it will enhance the cause of community ownership.

Of course as an advocate of Community Ownership I congratulate Marie Macklin on her magnanimous gesture, which I know will be appreciated by the Killie Trust. At Motherwell, the owner John Boyle has taken the level of generosity to new heights, through donating his shares to the Well Society, which will on reaching a financial target (to give them sustainability) see his shares gifted to the fans. His view being , who is better placed to keep the club at the heart of the community, than the very community that it serves. Now if we only had a few more owners like that?

In both Sweden and Germany we have seen the benefits of community ownership where through the football associations the 50 plus 1 rule means that businesses must work with the local community and cannot own the community asset that represents the town or city. It is too much to expect such radical steps to happen here in Scotland; but as the new ownership structures do emerge, so too will we get ordinary supporters going to Hampden Park to represent their clubs.

In Scotland, thanks to the efforts of many fans and likeminded business people we are reaching a tipping point where Community Ownership is ready to be embraced throughout the Divisions. Initially we only had traction with the likes of Clyde, Stirling Albion, East Stirling, in the lower leagues and with clubs such as Clachnacuddin, Gretna 2008 and Clydebank in the non league circles.

Now however, we have high profile cases at Heart of Midlothian and Dunfermline Athletic showing that businesses and supporters can work together to build a sustainable future for our clubs. What has become apparent is that that football is not a conventional investment and apart from a few interesting exceptions people can’t make money out of football in Scotland. So on the one hand there are no white knights willing to take on the burdens of club ownership and yet despite that dynamic we have seen a considerable amount of business people combine with supporters at the time of need to ensure these community assets (clubs) flourish.

Of course a business person can still get something out of it, through proper engagement with this audience which is so much easier to do when you are working together rather than sitting isolated in the Boardroom. As we have seen with Dunfermline Athletic and Hearts the supporters are happy to work with the business acumen of the investors and indeed if they help by providing funding to buy the club or the stadiums then supporters are comfortable with these business fans getting rewarded with a reasonable return on their investment. It has been surprising to many that business in Scotland has adapted to the concept of democracy in football and that as part of these process supporters are suddenly allowed a say in running their club. At the crux of that debate is who actually owns the club? Having the shares might mean something emotionally to the individual or give him some small comfort of having a financial investment; but the reality is that share certificates mean very little as the heart and soul of the club is embedded in the vibrancy of the collective energy of its supporters, not in paper certificates.

As we enter this new landscape it is perhaps no surprise that the Politicians have seen the changing dynamic and discussions have already started to see how we protect our community football clubs: through either the right to buy or the protection of club assets such as the Grounds. I welcome these discussions; but would ask that all the political parties start to think about how these communities owned clubs can be protected and indeed incentivised financially and maybe then we will be in a position to help stop the boom and bust cycle that has seen 154 administrations across football in the UK since 2000.

Paul Goodwin is Head of Supporters Direct in Scotland and author of Saving Scottish Football.

To find out more about Supporters Direct Scotland, visit: http://www.supporters-direct.org/homepage/what-we-do/scotland