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Fan Shares ?? a Blueprint for success?

By John Jennings :  08/02/2011 :  Comments (20) :
There has been much talk on TW, and many other forums, that the time is right for all committed Evertonians to quit complaining about the overall state of the club and start taking action.

I know that Tony l'Anson & Mike Owen are already doing some great work on the Trust idea and I thought that the following BBC online article will be of interest to many fans who are thinking the same way.

Tony & Mike have already said - no rush. Let's get this right. A very important part of that is to learn from others successes and failures.

It would be interesting to hear as many views as possible from TW regulars and then I know the guys are thinking of a meeting in early March to kick the whole thing off.

Here's to the 'Toffees Trust' or whatever this great idea launches as.

Nil Satis Nisi Optimum.

Fans club together to claim fair share

Matt Slater's Blog | 12:57 UK time, Monday, 7 February 2011

When people knock at my door, it is usually because they want me to give them money. Nothing wrong with that - they are nearly always polite - but it would be nice if it was the other way around for once.

Sadly, that is unlikely as I don't think any of my ancestors lived in south-east London a century ago. If they had, there is a chance they might have taken a £1 gamble on a new company called Arsenal Football Club Limited.

Pressing debts had seen its predecessor go bust in 1910 but this firm, whose only product was Woolwich Arsenal, seemed to have more get-up-and-go about it. So much get-up-and-go, in fact, that three years later it moved to north London, dropped the "Woolwich" and became a football giant.

A century later, many of those shares, of which 1,280 were issued, have been forgotten about or lost. But they have not stopped growing in value. That £1 punt is now worth almost £90,000, which is why some fortunate people have been getting knocks on the door from private investigators with good news.

They will expect a commission for their efforts but the most likely purchaser of your newly reissued shares will be somebody a bit like your Woolwich Arsenal-supporting forebear: a regular fan who wants a stake in their club.

Except it will not just be one fan. It will be hundreds of them.

The Arsenal Fanshare scheme is one of those ideas that seems so simple you wonder why it has taken so long to come up with it. And while there are elements of it unique to Arsenal, the general idea could become a template for all future relations between clubs and their supporters.

Woolwich Arsenal play Middlesbrough at their pre-Highbury home in Plumstead in 1906. Photo: Getty

Launched last August by the Arsenal Supporters' Trust (AST), Fanshare has more than 1,600 members who have invested over £350,000 in Arsenal shares.

The genius of Fanshare is that it made a virtue out of the biggest obstacle AST faced to achieving its goal of being a critical friend to the club. That obstacle was the runaway price of the shares.

Currently trading at £11,200, Arsenal's stock has been rising ever since English football's earning power changed forever with the advent of the Premier League in 1992. That was one year after Arsenal performed a 1-for-8 share split, making a few lucky people with south London links a nice profit.

But that profit started to become potentially life-changing a few years ago when Arsenal became the focus of a bidding war between an American sports magnate called Stan Kroenke and an Uzbek oligarch named Alisher Usmanov.

With those two snapping up shares - and only 62,219 of them in circulation anyway - AST had a tough time converting good intentions into actual power. Prior to Fanshare, AST had gained three Arsenal shares in eight years.

And then came the light-bulb moment: let's really club together, like a racing syndicate, and buy shares of shares.

A "Fanshare" is a 100th of an actual share, so approximately £110. Members of the scheme, having paid a £20 membership fee, can invest between £10 and £1,000 a month.

Once they have enough in their account, they can buy a Fanshare, bringing them direct ownership of a stake in Arsenal, the chance to attend the Arsenal AGM (100 Fanshare members went to October's), quarterly financial information from the club and a vote on key resolutions. Buy 100 Fanshares, equivalent to a full share, and you are given full voting rights and a guaranteed AGM place.

I should probably make it clear at this stage that Arsenal's fans are not the first to come up with a share-save plan. Rangers supporters, to give just one example, definitely got there before them. But unlike Arsenal's Fanshare, the GerSave scheme has not really delivered yet. There is one crucial reason for that: there is no relationship between the fans at Ibrox and the club's ownership.

Run by the Rangers Supporters Trust, there are 500 GerSave members with almost £70,000 in the bank. But until club owner David Murray relinquishes control of the Glasgow side, the fans do not want to prop up his regime.

This brings me back to what is so special about Arsenal's Fanshare. It has been done with the full support of the club's board - and even the major shareholders not on the board. AST has been able to convince everybody that a bigger say for "real fans" does not mean a storming of the barricades.

It is this attitude that has attracted praise for Arsenal and its Fanshare from interested onlookers, such as the Sports Minister Hugh Robertson and Uefa chief Michel Platini.

It is also why MPs sitting on the parliamentary select committee hearings into football governance went to the Emirates last week for their first fact-finding mission.

They met AST representatives, Arsenal manager Arsene Wenger and chief executive Ivan Gazidis, wanting to know how other teams could replicate this consensual approach - no easy task when so many club boards seem to be at war with their fans.

As for the parliamentary select committee hearings, they start with a bang on Tuesday, when former Football Association chairman Lord Triesman give his opinions.

But Triesman - and Arsenal - are not the only ones with good stories to tell.

FC United have risen from English football's 10th tier to the 7th since their birth in 2005. Photo: Getty

Perhaps the most interesting example of a new way of doing things for football can be found a long way from Arsenal at FC United of Manchester, the club started by disaffected fans of Manchester United.

FC United have shared Bury's Gigg Lane ground since their formation in the wake of the controversial arrival of the Glazers at Old Trafford in 2005. And the last six years have seen steady growth for a club many thought was a protest movement that would fizzle out.

With average gates of 2,000, the semi-professional team want to move to a home of their own in Newton Heath, the birthplace of Manchester United.

The plan is to build a £3.5m community sports venue, part-funded by grants from the local authorities, Football Foundation and Sport England, with £2m coming from the club's own coffers and a Community Share Scheme. The target is to raise £1.5m by 28 February. They are nearly there.

Members of the club, which is run as a co-operative, have invested sums between £200 and £20,000 in the new ground. The money is ring-fenced for three years but, after that, 10% of the pot can be repaid a year, enabling fans to get their money back should they need it. They could also earn small dividend payments.

FC United's general manager Andy Walsh told me the Community Share Scheme was the most exciting project they had attempted so far and thinks it could be spun out across the leagues.

As he pointed out, if FC United can raise £1.5m from a committed fan-base of 2,000, what could a team with gates of 10,000 or more achieve? More wholly supporter-owned clubs should be possible.

So there are positive signs of football fans organising themselves to be heard and respected at both ends of the spectrum. This is heartening news if lessons from recent high-profile financial failures are to be learned.

Football clubs are far more than just the current squad plus fixtures and fittings. They are assets to nurture and treasure, because one day, a 100 years down the line, they could be something really special to an entirely new generation of custodians.

Reader Comments

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Eugene Ruane
1   Posted 08/02/2011 at 15:48:53

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Really interesting stuff and more importantly, in these times of greed, disloyalty and the Murdochisation of football - a glimmer of hope.
Tony I'Anson
2   Posted 08/02/2011 at 16:03:52

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Thanks for that John. We were looking at posting "TrustEverton.com Update 2" today, but thought it better to wait until after the fall out of the accounts analysis.

We are still working away and we are fully aware of the Arsenal Fan Share idea.

Maybe we can use this article for any fans to come up with questions about what's involved in running a supporters trust? The more questions we get, the more we can have well thought out answers in place at launch time.
David Israel
3   Posted 08/02/2011 at 16:06:01

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Everton are not a quoted company, meaning the shares are all in private hands and cannot be bought on the Stock Exchange. There is therefore no way such a scheme could be started at Everton, unless shareholders agreed to sell some of their shares to the Trust or whatever.

The best thing, though, would be for Everton to issue new shares ? a way of finding investment money ? a portion of which could be ascribed to season-ticket holders and/or the Trust, if already in operation. This would, of course, dilute the holdings of all current shareholders, and "some" of them may not be interested.

Still, an excellent initiative, no doubt.
Tom Hughes
4   Posted 08/02/2011 at 16:09:43

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A real eye-opener as regards the potential of such a scheme. I think if we interpolated the figures achieved by FC United upto the level of our fanbase, then there's no reason not to believe that great things could be achieved. More power to Tony and Mike's endeavours!!!
Eric Myles
5   Posted 09/02/2011 at 02:53:25

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David #3, shares cannot be bought on the Stock Exchange unless someone is willing to sell them.
Gavin Ramejkis
6   Posted 09/02/2011 at 07:33:36

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Someone or more likely quite a few have sold recently, BK has bought more and Grantchester has reportedly bought more too. Good luck for the idea Tony and Mike, more vision in the last few months than our board in over a decade.
John Jennings
7   Posted 09/02/2011 at 11:48:46

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Tony ? I have my chequebook out at the ready.

But don't tell the missus...:)
David Israel
8   Posted 09/02/2011 at 17:08:49

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Eric (5), true, but shares tend to be more readily available for purchase in the case of quoted companies.
Michael Stevenson
9   Posted 10/02/2011 at 09:27:32

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£50m quid could be raised by 50,000 fans investing £1,000 each.

Riquelme anyone? ;-)
Rob Dolby
10   Posted 10/02/2011 at 10:18:38

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If we raised £50m what would we do with the cash? That wouldn't be enough to force a share issue from the current owners would it? Is the idea to oust Kenwright or work with him?

In the EPL £50m doesn't go very far does it. Victor's and Coleman's contracts would swallow up £10m of it.

We could put a new tier on the Park End. I seem to remember a few years ago someone trying to get this off the ground and failing, can't remember his name, Steve something.

The concept is good. I think Barcelona have something similar in place, maybe that is the model to follow rather than FC United.

Tom Hughes
11   Posted 10/02/2011 at 13:35:30

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Tony and Mike want Evertonian's to help formulate the make-up, direction and key objectives of the trust. They desperately want to get this right, so that "WE" fully harness the potential of the whole fanbase, to generate additional funds in order to tackle some of the issues that are holding the club back. Anyone and everyone with ideas/information, or with any particular expertise that may help should contact them.
Michael Stevenson
12   Posted 10/02/2011 at 14:03:56

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Rob #10. As has been mentioned before, this couldn't go ahead without approval of the existing shareholders so there is nothing that anyone can do to 'force a share issue'. It would only work if the existing owners agreed to create and sell more shares in the company.

This would dilute existing shareholders' percentage holding so they may not want to do this. However, seeing as they currently own a depreciating asset, maybe it would make financial sense to them to bring in extra capital. 50% of something is worth more than 100% of nothing. Anyway to answer your question sadly (in my view) Mr Kenwright would remain very much in place.

As for how much money to raise, I was only plucking figures out of the air to make a point. However, I think if you offered DM £50m right now, he would take your hand off!!

Michael Neely
13   Posted 10/02/2011 at 20:33:26

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£50 million is a bit of a pipe dream but £28 million from season ticket holders is more achievable. If everyone took out a £1,000 loan, the cost could be spread over three years. Then, a Trust or whatever name you want to give it, could loan the money to EFC interest free over a period of time that would make repayments easy on the clubs finances. It should be made clear though that the money must be made available to the manager and not the banks.

This could be done every three years if Trust members were to forego repayment altogether and actually give the money to the club. Personally, I'd be willing to do this, but I'd want some serious benefits to compensate.

As for the stewardship of the club, I'm not disatisfied with the current custodians. I don't consider them dishonest or inept, I just consider them skint ? which, as far as I know, isn't a crime.

John Jennings
14   Posted 11/02/2011 at 08:28:09

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I think Andy Green's blog points the way forward in terms of breaking out of the debt spiral. Look at how much we earn per seat in match day revenue compared to our loveable neighbours. Their attendances are higher, but it is the revenue generated by better corporate facilities, as well as additional bums on seats, that makes the difference. A decision needs to be made on redeveloping GP, or not.

If the Bullens Road could be demolished and rebuilt to hold an extra 2-3 thousand, but with great corporate facilities, then that could start to break us out of the spiral. Rumour has it H&S could make the decision for us! We need some decisive action by the board and then get the Trust behind them, all pulling in the same direction.
Guy Rogers
15   Posted 11/02/2011 at 08:52:14

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£50m ? lets offer it the red shite for Carroll or what about the Lady boy!... sorry, juvenile I know!
Jamie Rowland
16   Posted 12/02/2011 at 10:50:01

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We can't have a trust like Arsenal supporters have ? we are a private limited company. Shares are not readily available to buy. So how would it work if no shares are around to purchase? Arsenal is a plc ? floated on the Stock Market; we are not.
Tom Hughes
17   Posted 12/02/2011 at 12:45:05

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Jamie,
In theory, a trust may need to only buy one share to formalise a connection with the club, and offer share-holding status to its membership.... That is readily achieveable at any time, as shares are often available. A trust may become a vehicle for any number of objectives, not just ownership. There are a whole list of club-issues that could benefit from its potential revenue.
Jamie Rowland
18   Posted 12/02/2011 at 20:43:25

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But any transaction of shares at EFC are chaperoned by the clubs broker are they not? And the club may not wish to recognise a trust or a share scheme of any kind?

And purely for info, last time I enquired, the brokers had no shares to trade?
Tom Hughes
19   Posted 12/02/2011 at 21:09:02

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Shares can be traded privately.... If I remember rightly that's how I acquired mine. I haven't applied to the brokers lately, but as recently as say 12 months ago I was told shares were available. Shareholders may be holding on at the moment due to the low value (or to see how the current ownership issues go), but generally they are available. Regardless though, I'm not sure it is a show-stopping issue. Surley a trust can align itself to the club as a completely separate entity if necessary....
Michael Kenrick
20   Posted 13/02/2011 at 01:26:05

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Jamie, as Tom says, that's not really correct. Blankstone Sington probably have a sweet arrangement with the club whereby anyone enquiring about shares is referred to them as sole broker. However, anyone can buy shares individually and independently without going through them ? all you have to do is find someone who has them and is willing to sell them at a price you are willing to pay.

Now, I used to know this bloke...

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