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Minority v Majority shareholding

I’m interested what the opinion is to this as WWFC is currently a Trust-owned club.

An outside investor buying a minority stake in WWFC would mean it was still a trust-owned club (albeit not 100% anymore). That would allow extra funds to come into the club without it surrendering its trust-owned status.

An investor requiring a majority stake would effectively put money in but would be the new owner of the club. Although the new owners may wish to see a supporters’ trust remain, it effectively ceases to hold any power.

If both scenarios above fail for any reason, option (1) does allow the Trust to continue running the club, although the financial repercussions would be serious. Option (2) means the club would be left in the lap of the gods.

It’s a vitally important question as the current problems at Blackpool, Swansea, Coventry, Blackburn and Charlton will testify to.

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Comments

  • Even given the heavy bias you have given to your question I strughle to see why anyone would want to invest on a minority level. What do they gain?
    In reality it's the only real option for investment as the 75% threshold for a majority stake is almost impossible.

  • I think in those terms clearly option 1 would be preferable.
    Option 2 has the possibility of greater financing (depending on the investor) and therefore a better chance of greater success.
    It’s a risk vs reward decision.

  • If there were hundreds of investors all having submitted plans in detail it might be more of a question, lots to take in for those able to vote, should it come to that, not just percentage but reputation, amount, plans etc. Minority is often the slippery slope to majority anyway if you still need investment after the initial amount has been burnt through.

  • I think i mentioned before I read in the secret footballers book- as he is now investing or helping people invest - that a minority stake is always the start of a majority investment. So it's a false choice. ( witness the shenanigans in a lot of clubs as investors fight to get each other out.)

  • Majority investment all the way. Your friends current minority investment doesn’t actually offer much extra finance for the club. In actual fact rather than giving the club 600k a season that actually part services debt. Why not pay off debtors straight off, which in actual fact releases more money each season for the club rather than x amount of unnecessary interest they may be paying, whilst servicing debt. that way your friend might not have to inject so much each season. So a potential large, or assumed cash injection from a majority owner is more preferable to myself

  • @TrueBlu None of my friends have the money to take a stake in WWFC!!! If you are referring to Andrew Harman, his formal bid hasn’t yet been presented to the Trust Board, unless you know something I don’t?

    My interest in this stems from being a co-founder of WW Trust and working with Supporters Direct to establish a trust-owned model at WWFC. Unfortunately the way football finance is escalating makes it extremely difficult to continue as a trust-owned club - unless you are debt-free & live within very strict budget dependent on your income.

    The Minority v Majority debate is interesting as it highlights whether or not the Trust would still prefer to run the club or pass it on? Minority means they do continue as primary owners, majority means they pass the baton on to somebody new. If 2 interested parties were offering exactly the same financial input, which would supporters prefer to be the outcome? That is the crux of my question.

  • If they were offering the same financial input then a minority stake would obviously be the better option, surely?

    I would imagine the choice will come down to whether we want to give up more in return for more cash

  • @eric_plant I suspect you are correct. The academy thing is not a goer for me personally as I think we need the cash now but it will be a case of frying pan or fire I think. Struggle on as we are as long as we can or risk being turned over by owners now or down the line.

  • edited March 2

    Its not just wether the trust want to give up but wether a commercially appointed team would do a better job. There's an argument to say they probably could but no guarantees, whilst trust members would also be giving up the right to recall and vote out a bad board.
    Whoever wants to take over has to assure people they know what they are doing or have deep pockets or ideally both.

  • @StrongestTeam - Having deep pockets is not necessarily the answer if all they are doing is steadily building up the club's debt. This is what worries me about both bids, particularly the Americans.

  • @mooneyman said:
    @StrongestTeam - Having deep pockets is not necessarily the answer if all they are doing is steadily building up the club's debt. This is what worries me about both bids, particularly the Americans.

    Quite right, they absolutely do need to have the cash though or they can jog on, that is what we are short of. Unfortunately all the future plans and fluffy marketing statements can subside very quickly and the owner running out of cash and needing to concentrate on other businesses features high on the bad owners excuse handbook.

  • In the posh club bar before the game, stumbled upon a q and a with the american co owner celebrating his one year anniversary, covering management and stadium and a few other bits, very well received by the locals.

  • It would need to be a very good deal to make me even contemplate voting a majority stake in. I'd rather be looking at the terms of a minority stake bid but I suspect that we will not be presented with one.

  • Stroud and his cronies seem to have convinced everyone that we cannot survive without outside investment. Why is it then that a similar club to us, namely Walsall, have survived in the First Division for many years AND made a trading profit for 13 consecutive seasons? I assume Dev will say this is purely down to luck!

    https://www.bescotbanter.net/2018/10/walsall-announce-thirteenth-successive.html

  • @mooneyman. I assume that when you say similar to us you mean they have a similar average gate size 4760 v 4705 in 2017/2018?
    I imagine that their sponsorship deals, league payouts, TV monies, ticket prices all bring in more revenue. Balance that by bigger salaries for playing staff no doubt.
    Seems astonishing that they have 136 members of staff including 90 members of playing/coaching staff.

  • All is not necessarily what it seems, which you would have discovered if you’d done more research rather than seizing upon one story because it suits your agenda.
    Walsall FC is owned by wealthy local businessman Jeff Bonser. He also owns the ground through a separate company and charges the club a hefty rent to use it.
    I understand that Mr.Bonser is deeply unpopular with a lot of Walsall fans because he refuses to pay transfer fees for players. Apparently he hasn’t been seen at their games for several years. The club has also expressed concern about falling attendances recently.
    Is this the kind of scenario that you’d welcome at WWWFC?

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  • They also apparently make £150k a year from advertising that can be seen from the M6.

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  • Player salaries are probably cheaper too. I imagine we have to pay wages with a little bit of ‘London weighting’.

  • @glasshalffull said:
    All is not necessarily what it seems, which you would have discovered if you’d done more research rather than seizing upon one story because it suits your agenda.
    Walsall FC is owned by wealthy local businessman Jeff Bonser. He also owns the ground through a separate company and charges the club a hefty rent to use it.
    I understand that Mr.Bonser is deeply unpopular with a lot of Walsall fans because he refuses to pay transfer fees for players. Apparently he hasn’t been seen at their games for several years. The club has also expressed concern about falling attendances recently.
    Is this the kind of scenario that you’d welcome at WWWFC?

    I should have expected your usual pompous response.

    I was fully aware of the structure of the club and the fact the ground was owned separately. The same could actually happen here if we cannot repay the American's loan! Despite paying "a hefty rent", Walsall are still making a trading profit year on year.

    Of course a lot of their fans are unhappy, name me a club where all the supporters are satisfied with their owners? Your comment about their supporters being unhappy about the fact that he doesn't pay transfer fees is quite frankly ridiculous. Perhaps that's why their club is not in debt and have survived in the first division for 10 years!

    As far as I am aware (no doubt you will correct me) Mr Bonser has not pumped loads of money into his club but they still running a financially stable club. They must be doing something right.

    The scenario I want to see at our club is it being run on a commercially stable and efficient manner by a competent Board and not saddled with huge debts to new owners.

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  • How sad that you choose to get personal when challenged. You are perfectly entitled to your views about the competence of the Trust board and the merits of outside investment, but I am perfectly entitled to respond. You have picked on one example of a club showing a profit, but choose to ignore the fact that the vast majority of clubs in Leagues 1 and 2 are, like Wycombe, struggling to make ends meet.
    If Walsall are the perfect model of how to make a profit, why haven’t all those other clubs followed suit? I was merely pointing out that Walsall’s financial position is not as simple as it might seem.

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  • @mooneyman I could be wrong, but if the Yanks take over I assume the loan disappears into their investment and if Andy H takes over the loan gets paid off by him? Though eager to see what the Board decides and amazed at what Gareth has managed this season I still think we need investment myself wherever it may come from.

  • @Wendoverman - There are certainly doubts that the Board will achieve the necessary 75% voting threshold for the American bid. If that is the case, then we have to pray that Harman maintains his interest in a minority share and agrees to pay off the current loan.

  • Whichever one is chosen it will be a very interesting vote to be sure. Not only for the future of the club, but to gauge actually how much influence the Gasroom has! :wink:

  • I would imagine that if this were the scenario Mr Harman would insist on changes of staff at Trust Board level?

  • First time poster...attend AP at least x10/12 times a season with my young son in between work and the garden, just interested in where the club are with the proposed investment/sale? Apologies if this is the wrong thread for this question!

  • I did notice Mr Harman walking through the foyer of the Frank Adams stand rather than the hall way of the sponsor boxes and Woodlands bar. Maybe getting some first hand viewings of the queues of the kiosks. Not sure how the American investors go about looking at what needs improving SKYPE or facetimed from the power group ?

  • They've visited the club and been to games haven't they?

  • Did they not fly in for the JPT tin pot cup game against the PNL ? Im sure they learned a lot about queues and nurturing our fans base from that.
    Was the Frank Adams stand even open ? Must have been the longest ever traveller's for a JPT group match, does that put them in the 'Superfan' bracket ?

  • @ChasHarps said:
    I did notice Mr Harman walking through the foyer of the Frank Adams stand rather than the hall way of the sponsor boxes and Woodlands bar. Maybe getting some first hand viewings of the queues of the kiosks. Not sure how the American investors go about looking at what needs improving SKYPE or facetimed from the power group ?

    Probably trying to locate the wherabouts of a packet of crisps to buy!

  • I assume because he lives a lot closer than them, it's more convenient for Mr Harman to get to games.

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