New Investment Options

[Spiderpig]

 , I'm not a WS member and never will be if it remains  in it current format. It sole purpose when formed was to ask the fans to contribute cash on a regular basis to provide an overdraft facility For the club.

Proper fan ownership would have seen the fans given the opportunity to buy actual shares in the club to raise cash they would then have a genuine say in how the club was run.

No doubt changes in the governance of the club will be forthcoming if the outside investment is finalised so there will be an opportunity to change the WS as well for the benefit of everyone, it might even persuade me to join if I wad becoming an actual shareholder and not just a source of funds.

[steelboy]

9 minutes ago, Spiderpig said:

 

Proper fan ownership would have seen the fans given the opportunity to buy actual shares in the club to raise cash they would then have a genuine say in how the club was run.

 

I don't see how you could possibly have more say as a small shareholder than as a Society member?

Everyone is equal in the Society, it gives us a legal structure to pool our resources, no one can take money out of it and it could easily outlive most of us.

[dennyc]

3 hours ago, steelboy said:

I don't see how you could possibly have more say as a small shareholder than as a Society member?

Everyone is equal in the Society, it gives us a legal structure to pool our resources, no one can take money out of it and it could easily outlive most of us.

There is definitely strength in numbers and members donations being locked in is also a positive.

But the Club and others have been given Society funds on a permanent..not loan....basis. Contrary to what we were promised would happen when the Society was established. So Society funds are lower than they should be given total donations collected. A figure in excess of £1.25m is gone forever. The people who allowed that to happen are still on the Society Board. More recent appointees are looking to have better control over Society assets but it remains to be seen whether they will succeed. I genuinely wish them well and early signs are promising.

Given how Society funds have been managed up to now, the limited scope for increasing monthly income given our fan numbers and the fact the Club has failed to at least break even for a number of years .........for how long do you think the Society can continue to sustain the Club before funds run out? Having to demonstrate the ability to financially cover an 18 month period to appease the football authorities also comes into play.

I believe external investment is essential to ensure the future of our Club at the present level. Respect them or not, it is clear the current Club Board shares that view. And on that basis I think  they are acting in the Club's best interest. But we need to find the correct balance, which retains the Society as the major shareholder, does not make us overly reliant on the goodwill of any outside investor and protects Club assets. Not an easy task.

Until we are presented with the facts of any investment offer we need to keep an open mind. It would also help if meantime the Society would spell out exactly how our funds will be utilised in future. Are we returning to the original model and so longer being utilised as a piggy bank to be raided for whatever purposes certain people see fit. 

[steelboy]

38 minutes ago, dennyc said:

Given how Society funds have been managed up to now, the limited scope for increasing monthly income given our fan numbers and the fact the Club has failed to at least break even for a number of years .........for how long do you think the Society can continue to sustain the Club before funds run out? 

 

That's not true though. These are the figures during the period of fan ownership so far. When you compare it to other clubs during the same period we have done exceptionally well. According to Derek Weir at the AGM we are likely to break even this season which is impressive considering the dead weight in the playing squad.

16/17: (£104,000)
17/18: £1,720,000
18/19: (£436,000)
19/20: £346,590
20/21: £3,575,615
21/22: (£1,082,000)
22/23: (£1,605,000)

Net profit: £2,415,205

[steelboy]

1 hour ago, dennyc said:

There is definitely strength in numbers and members donations being locked in is also a positive.

But the Club and others have been given Society funds on a permanent..not loan....basis. Contrary to what we were promised would happen when the Society was established. So Society funds are lower than they should be given total donations collected. A figure in excess of £1.25m is gone forever. The people who allowed that to happen are still on the Society Board. More recent appointees are looking to have better control over Society assets but it remains to be seen whether they will succeed. I genuinely wish them well and early signs are promising.

 

I agree with this and whenever (or possibly if) we have a Society meeting there are going to be a lot of questions asked about exactly that.

Going back to the very start of the Society one of the first things that happened was the Society bought 5% of the club for £250,000 without informing the members which led to complaints, a meeting and new rules being put in place. The share sale recently apparently involved selling 5% of the club for £10,000 which is hugely undervalued. My back of a fag packet calculations put this at a 90% discount for the buyers. I'm sure i'm not the only member who wants to know why this is considered beneficial for the membership and who exactly benefitted from the discounted sale.

 

 

[dennyc]

1 hour ago, steelboy said:

That's not true though. These are the figures during the period of fan ownership so far. When you compare it to other clubs during the same period we have done exceptionally well. According to Derek Weir at the AGM we are likely to break even this season which is impressive considering the dead weight in the playing squad.

16/17: (£104,000)
17/18: £1,720,000
18/19: (£436,000)
19/20: £346,590
20/21: £3,575,615
21/22: (£1,082,000)
22/23: (£1,605,000)

Net profit: £2,415,205

Ok. so not a complete run of losses. Just the four loss making seasons out of seven and that includes the most recent two years which represent the biggest losses. A trend which should cause concern, and would in most Businesses. 

So my question about sustainability is still valid. How many £3m players can we unearth and profit on given current transfer rules? Strip that Turnbull fee out and the seven year Net Profit more than disappears. And in that timeframe we have also ingathered funds from a fair number of Development/Agreed Fees which failed to offset operating losses. The strategy of relying on such sales to survive is just asking for trouble.

 

[steelboy]

48 minutes ago, dennyc said:

Ok. so not a complete run of losses. Just the four loss making seasons out of seven and that includes the most recent two years which represent the biggest losses. A trend which should cause concern, and would in most Businesses. 

So my question about sustainability is still valid. How many £3m players can we unearth and profit on given current transfer rules? Strip that Turnbull fee out and the seven year Net Profit more than disappears. And in that timeframe we have also ingathered funds from a fair number of Development/Agreed Fees which failed to offset operating losses. The strategy of relying on such sales to survive is just asking for trouble.

 

Bringing players through is part of our business model. We have Lennon Miller now, there will be more. 

Focusing on 12 month cycles rather than the medium term would be cutting our own throat. A lot of annual losses over the years have just been investing the profits from the previous year. 

[dennyc]

1 minute ago, steelboy said:

Bringing players through is part of our business model. We have Lennon Miller now, there will be more. 

Focusing on 12 month cycles rather than the medium term would be cutting our own throat. A lot of annual losses over the years have just been investing the profits from the previous year. 

I'm not saying investing in youth should not be part of our strategy. But relying on sufficient player sales from that source is too risky. It is too tempting for young players to walk away when their contracts expire, or before they reach full contract age. Those sales should be a bonus and not a "get out of jail" card.

Amongst other things, external investment on the correct terms could help us develop a stronger youth programme. That way we have the best of both worlds. So that is a bit more than a 12 month cycle. 

Bottom line is that we cannot continue as is. It does not work and leaves us exposed.

[steelboy]

3 minutes ago, dennyc said:

 

Bottom line is that we cannot continue as is. It does not work and leaves us exposed.

7 continuous years in the top flight and £2 million in the black. It does work and it is sustainable. 

 

[wellgirl]

43 minutes ago, steelboy said:

7 continuous years in the top flight and £2 million in the black. It does work and it is sustainable. 

 

I personally don't think we should have to rely on selling our young talent to stay in the black 

[santheman]

11 minutes ago, steelboy said:

7 continuous years in the top flight and £2 million in the black. It does work and it is sustainable. 

 

So far and only because of the Turnbull money.

Next season you've got both Dundee clubs with owners seemingly happy to pump millions into their playing squads.

Hibs with 5m American investment.

Kilmarnock with Billy Bowie and his blank chequebook

Hearts hoovering up all the better players in our league with 15m sitting in the bank from their foundation and Budge and Co happy to keep putting money in.

Ross County with Uncle Roy's blank chequebook.

Aberdeen with a rich chairman putting his money where his mouth is (not that its helped this season of course)

St Johnstone with a potential American buyer with money to burn by the sounds of it.

Even St Mirren have Gilmour putting money in albeit in the form of soft loans.

Old Firm take care of themselves. 

That leaves us and with no form of outside investment unless you class the WS as that.

Money doesn't always buy success of course but it makes it a damn sight easier.

Do we sit back and hope that the teams with more money than us manage to keep  f*****g things up and we keep "punching above our weight" and continue to get lucky with bargain basement buys to stay in the top flight.

I'm still of the opinion that the WS retain control of the club but if we want to keep competing at this level in light of whats happening at other clubs we need to look at every option otherwise we might find ourselves in the never ending cycle of trying to avoid the dreaded bottom 2 places every season and the type of football that brings

 

 

 

[wellgirl]

9 minutes ago, santheman said:

So far and only because of the Turnbull money.

Next season you've got both Dundee clubs with owners seemingly happy to pump millions into their playing squads.

Hibs with 5m American investment.

Kilmarnock with Billy Bowie and his blank chequebook

Hearts hoovering up all the better players in our league with 15m sitting in the bank from their foundation and Budge and Co happy to keep putting money in.

Ross County with Uncle Roy's blank chequebook.

Aberdeen with a rich chairman putting his money where his mouth is (not that its helped this season of course)

St Johnstone with a potential American buyer with money to burn by the sounds of it.

Even St Mirren have Gilmour putting money in albeit in the form of soft loans.

Old Firm take care of themselves. 

That leaves us and with no form of outside investment unless you class the WS as that.

Money doesn't always buy success of course but it makes it a damn sight easier.

Do we sit back and hope that the teams with more money than us manage to keep  f*****g things up and we keep "punching above our weight" and continue to get lucky with bargain basement buys to stay in the top flight.

I'm still of the opinion that the WS retain control of the club but if we want to keep competing at this level in light of whats happening at other clubs we need to look at every option otherwise we might find ourselves in the never ending cycle of trying to avoid the dreaded bottom 2 places every season and the type of football that brings

 

 

 

Again agree. I want Motherwell to be in the position where if other clubs come knocking for our best players - we can say no. I also completely get that there's also a balancing act at times as well - do you sell for a good sum when you can  or let talent go for very little - as happened with Max Johnson.

Elsewhere on the boards folk were talking about the prospect of clubs coming in for Theo Bair - and he's only scored 13 goals I think. That's not me trying to talk him down. It just seems as if every time a player is either very talented or hits form - we resign ourselves to losing them. 

Also. It would be good to have a settled team - and not face the prospect of a rebuild every other season.

Fan ownership is a great thing - but I really do think we need a cash injection from elsewhere 

[steelboy]

The Turnbull money wasn't a fluke. We invested in our academy and got the reward. It's the same with Max Johnston, Allan Campbell, Chris Cadden, James Scott and Jake Hastie. We've had other players who we've had training compensation for who didn't even make the first team.  It's at the core of the club. 

 

[wellgirl]

6 minutes ago, steelboy said:

The Turnbull money wasn't a fluke. We invested in our academy and got the reward. It's the same with Max Johnston, Allan Campbell, Chris Cadden, James Scott and Jake Hastie. We've had other players who we've had training compensation for who didn't even make the first team.  It's at the core of the club. 

 

Youth development should always be at the core of the club. But if we had more money we could make more choices. We should not have to rely on selling talent to survive 

[santheman]

7 minutes ago, steelboy said:

The Turnbull money wasn't a fluke. We invested in our academy and got the reward. It's the same with Max Johnston, Allan Campbell, Chris Cadden, James Scott and Jake Hastie. We've had other players who we've had training compensation for who didn't even make the first team.  It's at the core of the club. 

 

I didn't say it was a fluke but without it we would be in a far worse position. There's no guarantee that we're going to produce a Turnbull every other season.

The fact that we have money in the bank and the WS and yet Kettlewell had to drastically cut the playing budget tells a story.

[dennyc]

17 minutes ago, santheman said:

I didn't say it was a fluke but without it we would be in a far worse position. There's no guarantee that we're going to produce a Turnbull every other season.

The fact that we have money in the bank and the WS and yet Kettlewell had to drastically cut the playing budget tells a story.

Exactly this. 

And also, despite income from youth players moving elsewhere, we still incurred losses some years.  I repeat, it is a highly risky strategy. Relying on a Turnbull like sale every other year as a minimum. We would survive possibly were those sales not to happen, but at what level?

[Kmcalpin]

1 hour ago, wellgirl said:

Youth development should always be at the core of the club. But if we had more money we could make more choices. We should not have to rely on selling talent to survive 

Agree about the importnace of youth but selling our talent on has been a key part of our financial plan ever since I began supporting the club and that wasn't yesterday. It won't change, but I wish it would. We do, however, have to maximise our income and finances from other sources. We should only sell if the price is right for us.

[dennyc]

1 hour ago, Kmcalpin said:

Agree about the importnace of youth but selling our talent on has been a key part of our financial plan ever since I began supporting the club and that wasn't yesterday. It won't change, but I wish it would. We do, however, have to maximise our income and finances from other sources. We should only sell if the price is right for us.

Selling talent is a key part of every Club, and always will be. I don’t think anyone believes otherwise. . But as u say other income streams must also be maximised. My concern is that for a while the sale of players appears to have been identified by the current Board as the only way to operate in the black, or close to it. With Society monies made available for projects the Club cannot fund. The Society is a good thing and hopefully will continue to grow but I wonder, if it had not existed, would McMahon etc been forced to come up with other ways to balance the books. 

By continually selling off our best players and their youth replacements, the quality on the pitch reduces…..as is evident on a year by year comparison…and so performance income reduces and the Club becomes less attractive to sponsors, new fans, tv etc. We then become even more dependent upon player sales and if they don’t happen we continue our quality decline. How long can that downward spiral continue?
 

It’s fair to say that other Clubs are experiencing similar problems but they have an advantage over us in that they do have outside sources of income. Some that are even prepared to cover sizeable losses. Somebody helpfully provided a list earlier in this thread.   I guess it might all come down to what level we wish to see Motherwell compete at. I hope we can find a balance that supports both outside investment and the Society as major shareholder. If not, I worry about where we are heading. 

[Stuwell2]

I find it quite puzzling that folk talk about the WS (as main shareholders)needing to stop putting money into the club at the same time extolling the virtues of Bowie, Budges, Gilmour and other investors at other clubs. 
I’m sure that if a rich Well fan was willing to do to same - or Boyle had been able to find a buyer willing to do that - then the WS would keep the cash it raises through membership or wouldn’t even exist.
Unfortunately or possibly fortunately this hasn’t happened so the WS, as owner of the club, has a responsibility to keep the club going and put money into things deemed by the club board as important to the clubs future. I’m sure the the WS board look at every request and the case put to them by the club board before handing over any cash.  

[dennyc]

Of course the Society exists to fund the Club in times of need. But, just like a Bank overdraft, those funds were originally intended to be repaid to the Society from the likes of transfer income or end of season performance payments. In that way Society funds would continue to escalate and be protected in a worst case scenario. To rebuild a new Club if need be. That is how the Society was sold to fans.  Without Members knowledge that model was changed. First of all to repay Les Hutchison and subsequently funds were handed to the Club with no intention of those monies being repaid. So the current balance is way below where it should be given the total funds received from fans over the time the Society has existed. Recent appointees to the Society Board are hoping to see the original model followed in future and so see balances increase. 
Funds were also intended to be provided purely for the core business of the football Club. Although the Community Trust is a fantastic initiative I would question whether the Society should be utilising fans’ donations for that or any initiative which is not essential to Motherwell FC. 

[Stuwell2]

Did Les get his money back? From memory there was an initiative where he matched fans cash with his up to the £1m he had put in initially. Was a bit of a gimmick to encourage fan to join the society. 
From my point of view having the community trust means we engage with our potential support which in the long term brings in income through youngsters asking to be taken to games and local businesses giving something so they are seen to be helping the community. Also I think that the CT gets grants from the governments and other agencies as long as they can invest a % which is where the WS helps out when there is a shortfall.
Folk might see this as wasted cash but I think the indirect return to the club is probably more than what the WS pays to the CT. 

[Spiderpig]

18 minutes ago, Stuwell2 said:

Folk might see this as wasted cash but I think the indirect return to the club is probably more than what the WS pays to the CT. 

Would any potential investor be happy to see some of the cash they would be putting into the club used to finance projects / initiatives etc not connected with the club etc from which they would see no return? I think not they want a financial return, not a story in the Motherwell Times saying what nice people they are.

The WS are also investors, the members are commiting lots of cash each year without the expectation of a financial return, but to hopefully benefit the football club to make it better ie governance, infrastructure, players, results etc. They don't put up their cash to fund community projects etc.

 

[Stuwell2]

I’d argue that any investor who doesn’t invest in his target customers will lose them and his investment. 

[dennyc]

2 hours ago, Stuwell2 said:

Did Les get his money back? From memory there was an initiative where he matched fans cash with his up to the £1m he had put in initially. Was a bit of a gimmick to encourage fan to join the society. 
 

Les H did encourage Society sign ups by saying he would reduce the sum owed to him by the equivalent of any new funds collected by the Society. £1 for £1. What we were not told at the time was that Society funds would be used to repay the remaining balance of his debt at an agreed date. Effectively, for a period of time, all monthly payments to the Society were passed to him. 

My view is that fans who hand over hard earned cash are entitled to know what those funds will be used for. Not to the Nth degree by all means. To support the Club is one one thing and I'm all for that, but to support other causes (however worthy) is another thing. If I want to contribute to the Community Trust or any other charity I will do that separately. I'm certainly not questioning the merit, good work or value of the Trust.

My biggest concern is that funds were to be loaned to the Club and not just donated. The Society would act as Bankers. Any Loans to the Club were to be shown as such on MFC/Society Accounts with the intention that at 'some time in future convenient to MFC' they would be repaid from income. This was essentially an exercise to ensure that if MFC failed, then legal priority would be given to repaying the Society ahead of Ordinary Shareholders and Creditors. Common sense. If that agreement had been adhered to, then the value of the Society would currently be well in excess of £2m. And available for a rebuild if need be.

If the way the the Society is to support the Club has changed/is to change then fair enough. But at the very least Members should be aware of what the arrangement is. Through discussions I believe attempts are being made to return to the original model, driven by recent appointees. But if I am to continue to contribute then I need to be convinced that we are once more operating as originally agreed, particularly as those who oversaw the 'donations' still have influence.

 

[Spiderpig]

2 hours ago, Stuwell2 said:

I’d argue that any investor who doesn’t invest in his target customers will lose them and his investment. 

Investors in football clubs are not selling a product to the masses, they don't have target customers, they are looking to invest money make the club better on and off the field, then withdraw some of the profit etc.