Financial Support for the Club- The Football Club, the Leagues Club and Ownership

[ABshark]

Now What?

Thanks for all the input guys- I kind of expected that everyone's eyes would glaze over when they saw all of that text, but I've been amazed at everyone's enthusiasm and 'can-do' attitude. Its great to be reminded of how loyal and committed Sharks fans are! :good:

It seem that we've had a few main ideas come out of this thread so far.


1) Fans buying the Club and it becoming a 'private company limited by shares'
Benefits: Private equity would be pumped in to the Club, would improve Community engagement (possibility that some people who haven't contributed financially in the past may be encouraged to do so with the lure of having a major say in how the Club is run, especially those with significant personal wealth), may open up connections in the business world for sponsorship etc, and hence provide a more competitive Football Club on and off the field and/or improve the Club's debt situation. Ensures Club would continue to stay in the same place, with the same colours, name and obligations.
Concerns: Whether there is enough interest, and whether there is enough capital to make it worthwhile.
Ongoing questions: What would each owner be entitled to? (Ticket subsidy/free) Would dividends be paid? Would shares be able to be sold on, and if so for what price? How many shares could any one person own? What kind of liability would each shareholder face? Possibly somewhat costly to set up.
Next step/s:
- Polling SF.com and Club Members about whether they would be willing to buy in, how much, and under what circumstances.
- A discussion/research of Sharks affiliated businesspeople and Shire locals with wealth (e.g. Dean Treister)
- Suggesting it to the Club with an estimate of those with an initial (informal) expression of interest
- Indetifying potential buyers.
- The Board deciding that it is the best direction and making contact with potential investors

Everyone- what have I missed? What benefits? What problems? What should our next step in any direction really be? Who would like to take on putting together a poll of SF.com Members? Who would be up for getting a contact address/number for the NRL or get to know about the required legal structure? How much would you contribute? What kind of benefits would you require in return?

:cheers

 

[SF]

Thanks for all the input guys- I kind of expected that everyone's eyes would glaze over when they saw all of that text, but I've been amazed at everyone's enthusiasm and 'can-do' attitude. Its great to be reminded of how loyal and committed Sharks fans are! :good:

It seem that we've had a few main ideas come out of this thread so far.


1) Fans buying the Club and it becoming a 'private company limited by shares'
Benefits: Private equity would be pumped in to the Club, would improve Community engagement (possibility that some people who haven't contributed financially in the past may be encouraged to do so with the lure of having a major say in how the Club is run, especially those with significant personal wealth), may open up connections in the business world for sponsorship etc, and hence provide a more competitive Football Club on and off the field and/or improve the Club's debt situation. Ensures Club would continue to stay in the same place, with the same colours, name and obligations.
Concerns: Whether there is enough interest, and whether there is enough capital to make it worthwhile.
Ongoing questions: What would each owner be entitled to? (Ticket subsidy/free) Would dividends be paid? Would shares be able to be sold on, and if so for what price? How many shares could any one person own? What kind of liability would each shareholder face? Possibly somewhat costly to set up.
Next step/s:
- Polling SF.com and Club Members about whether they would be willing to buy in, how much, and under what circumstances.
- A discussion/research of Sharks affiliated businesspeople and Shire locals with wealth (e.g. Dean Treister)
- Suggesting it to the Club with an estimate of those with an initial (informal) expression of interest
- Indetifying potential buyers.
- The Board deciding that it is the best direction and making contact with potential investors

Everyone- what have I missed? What benefits? What problems? What should our next step in any direction really be? Who would like to take on putting together a poll of SF.com Members? Who would be up for getting a contact address/number for the NRL or get to know about the required legal structure? How much would you contribute? What kind of benefits would you require in return?

:cheers

You know of all the ideas I've seen on this site over the years, I think something along these lines (No. 1 - basically a tightly-controlled supporter-owned organisation) is the one that could most make a short and long-term difference to the club. The question is whether what you would want is possible under financial laws.

I definitely think there would have to be an incentive to buy shares, or otherwise it is just basically another charity act. I think the best incentive would be financial returns from appreciation, although other benefits (rights/options etc) would ensure you get more cash for the club upfront.

In an ideal world shares would be linked to some extent to voting rights, but non-share-holders (leagues club members etc) would still having some voting power too. Also shares would be limited in the most part to supporters. And there would be no liability for debt etc.

But again... all of that is where the financial rules kick in. This discusses some types of companies. I am not experienced in this field at all....
http://www.jamescox.com.au/six-different-types-of-public-and-proprietary-companies/

Again if it was all hypothetically possible, considering Tinkler bought the Knights for maybe $10-20 million, you'd think you could find 5000 people who would pay an average $2000 to generate $10 million upfront (some paying more, some less). Not a staggering amount of money, but it's not just about the money - it's about people having a real interest in the future of the club.

I'm thinking we should split this into two threads...? One about the ownership model, and one about fund raising.

Thanks for all your ideas on this AB... good stuff. :good:

 

[SF]

OK hope you don't mind AB, but I've done some major splitting, as I didn't want this idea to be drowned.

Let's please try to keep this thread about the ownership structure of the club.

Discussions about fundraising/third-party sponsorship etc have been moved here

Cheers everyone!

 

[The Shire]

The ownership model is obviously a tough route for supporters to go through as consent is going to be needed by the club and its members. we would need figures on how many can guareentee a share at say $2000.

This has probably become more complicated by the development as the future profits i am sure are wanted to be retained by the club. This is where tradies missed out, they had a chance to be a part of that. Personally i couldnt care less about the profits. All i want is a secure short term future until the development goes ahead. and maybe have my share bought out by the club at the same price when our future is guareenteed.

I think if we could start up an entity in part 2 through the fundraising and 3rd party sponsorship this may lead to greater credibility in a bid to have supporters control the club.

Something has to be done in the short term because 7,000 last night, in a very boring game, where we lost isnt going to help the financial situation at all.

:cheers

 

[ABshark]

You know of all the ideas I've seen on this site over the years, I think something along these lines (No. 1 - basically a tightly-controlled supporter-owned organisation) is the one that could most make a short and long-term difference to the club. The question is whether what you would want is possible under financial laws.

I definitely think there would have to be an incentive to buy shares, or otherwise it is just basically another charity act. I think the best incentive would be financial returns from appreciation, although other benefits (rights/options etc) would ensure you get more cash for the club upfront.

In an ideal world shares would be linked to some extent to voting rights, but non-share-holders (leagues club members etc) would still having some voting power too. Also shares would be limited in the most part to supporters. And there would be no liability for debt etc.

But again... all of that is where the financial rules kick in. This discusses some types of companies. I am not experienced in this field at all....
http://www.jamescox.com.au/six-different-types-of-public-and-proprietary-companies/

Again if it was all hypothetically possible, considering Tinkler bought the Knights for maybe $10-20 million, you'd think you could find 5000 people who would pay an average $2000 to generate $10 million upfront (some paying more, some less). Not a staggering amount of money, but it's not just about the money - it's about people having a real interest in the future of the club.

I'm thinking we should split this into two threads...? One about the ownership model, and one about fund raising.

Thanks for all your ideas on this AB... good stuff. :good:

Thanks for splitting the threads mate, that's a big help. They are two different issues.

I agree that this would be the most important and influential change in our Club's history. Let's be clear- what we're talking about here is private ownership in a mold not dissimilar to the takeovers of Crowe/Holmes a Court, Tinkler, Delmege/Penn etc, except that we would include 'community capital' as well.

However, I don't think we have a Nathan Tinkler or Russell Crowe that is willing to pour multiple millions in to the Club. But do we have one or two businessmen who would be willing to spend in the region of $1m? That's the key question.

I know you didn't mean $2000 as a share price SF, but I think its important to emphasize that the price per share should be such that any Shire local and any Sharks fan could be able to buy a share. One of the key elements to this idea is that as many people as possible would contribute to the Club and take real ownership of it. Its also vital that the ownership of each share would give the owner to voting rights- though I'm quite sure that that is the case legally anyway.

I think $5m is a good figure to work with. My guess is that Tinkler 'bought' the Knights for a nominal sum (say $1), but on the proviso that he would guarantee income of at least $10m over ten years (or something). $5m is also probably a more realistic for number for us and convenient in that if you triple it, you get $15 which is approximately equal to the Leagues Club's total liabilities.

So, with that figure in mind... I think there are three basic ways this could work:

1) One buyer, or a small few buyers (1-3) agree to buy/fund the Club for x dollars, in much the same way that Nathan Tinkler bought the Knights. I think this is unlikely, and I would be hesitant to sell our Club like the Knights did theirs. Strong limits would have to be applied.

2) A group of financially 'small' Supporters band together and put forward a proposal to 'buy' the Club. I'm not talking multi-millionaires, I'm talking people like you and I (and I'm assuming that there aren't many multi-millionaire SF.com Members!). I don't see us raising much in the way of funds- at least not on a scale that could really make a strong impact on the Club's finances. That said, every little bit helps.

3) A mix of the above buyers- small and big. My hope is that we could gather, for instance, two-thirds of the desired funds through 'high-rollers' who are Cronulla Sharks Supporters, Sponsors, ex-players or officials (Peter Gow? Dean Treister? ET?), community minded Shire locals or just sports lovers (like a Gerry Harvey maybe?).

That would leave a third of the capital to be raised by 'small' investors. This could be structured in a couple of ways. Firstly, each Supporter could purchase shares directly, not dissimilarly from how you would buy shares on the stockmarket, and get in return voting rights, dividend payments etc.

Or, we could adopt the "Supporters Direct" method that has been used by many British Football Club fanbases to take back control of their Clubs from wealthy owners. Basically, fans get together to form a legal entity (called "supporters trusts" in the UK- I don't think we have a direct equivalent here, but its basically a not-for-profit organistation and hence doesn't face taxes) and then buy back a share of their Club as a group, and hence get a seat/s on the Board and a say in decisions etc. As I mentioned in the first post, some English & Welsh RL Clubs have adopted this model- you can read more about it here and here.

So- could we raise $2m in through 'small' share purchases of less than, say, $50k? If each share were priced at, $100, could we sell 20,000 shares?

And could we raise something like $3-$4m from bigger backers? Who could we approach?

A few other things:
- The price per share should be such that it would involve as many people as possible and not inhibit anyone. Key to this is that the Sharks community would take real ownership of the Club. In fact, I would like us to implement a Direct Debit system where you could buy x amount of shares over 12 months.
- Every share should come with voting rights, and I think that legally that would have to be the case anyway. If we were to go down the Supporters Group model, then the members of the Supporter Group would simply elect representatives to vote on the behalf of the Group.
- This could be a stages process with an initial float of shares, and then a second or even third release. That would allow people to plan and save for shares.
- I agree that this couldn't just be a charity case, but it would be important to make sure that the Club has various rules in place that ensure that the Club's doesn't just become a money-making venture. As I understand it, as soon as the Club started returning profit (if we ever make any) to its Owners in the form of dividends, then the Club would lose its not-for-profit status and would have to pay tax on its income. So instead shares would have to be able to be traded for a profit.*
- As Mark^Bastard suggested earlier, it would be wonderful if people were able to invest some of their superannuation in to the Club. But it seems very difficult- would people have to self-manage their superannuation?** And we wouldn't want anyone losing their whole superannuation if worst came to worst- that would really mean a lot of hate being directed at the Club.
- I would also like to see the Leagues Club, as an entity, be a part owner in some manner. Similarly, I would hope that Sutherland Shire Council would invest a nominal amount and become a stakeholder, and perhaps even the various other Shire Sports Clubs could also invest a small amount which would then entitle them to a direct voice in AGM meetings and so on.


*I would really like some more info on this, specifically whether if the Club became a 'private company limited by shares' as we are suggesting, would it lose its tax benefits? How has it worked with Newcastle/Manly/Souths?

**Is anyone a financial planner or accountant, or is in close contact with one? Could you ask them whether it would ever be possible for Sharks fans to invest their superannuation funds in to the Club if it were sold as shares?

 

[kiwishark]

Been watching the Champions League this morning and interesting fact I heard is that Man Utd's opposition Schalke04 are 100% owned by there fans.

 

[Gil]

Seeing as it's been bought up.

The way the Packers have developed is a great model for maybe the Sharks, here's a wiki thingy below.
A great read, especially down the bottom (Public Company).

A 30 year wait for season tickets........bloody hell.

http://en.wikipedia.org/wiki/Green_Bay_Packers

 

[Born&bred]

Seeing as it's been bought up.

The way the Packers have developed is a great model for maybe the Sharks, here's a wiki thingy below.
A great read, especially down the bottom (Public Company).

A 30 year wait for season tickets........bloody hell.

http://en.wikipedia.org/wiki/Green_Bay_Packers

Interesting to note that with this year's 10,000 members - if each was $1,000 - we would raise $10 million.

Considering my membership was $500 and platinum is almost $1,000...

Food for thought.

 

[egg]

Interesting to note that with this year's 10,000 members - if each was $1,000 - we would raise $10 million.

Considering my membership was $500 and platinum is almost $1,000...

Food for thought.

Even if the share price price provided you with life membership with lifetime ticketing discounts,,
I as an interstate member, would be happy to do without keyrings/tickets etc ,, for a minimal yearly gesture and discounts to tickets
With the $1000 per shareholder raising potentially $10,000,000 (in total) up front.
Could very well be utilised by good management to set up a positive cashflows and see us thru the present hardships

 

[Jenni]

I wonder if they could offer the choice of making a donation when we pay up, through the membership process.... from $10, $25, $50 etc.... I only get interstate membership but I would be happy to donate even $50 or $100 with my membership.... I know its not a $10 mil, but still fund raising.

 

[egg]

I wonder if they could offer the choice of making a donation when we pay up, through the membership process.... from $10, $25, $50 etc.... I only get interstate membership but I would be happy to donate even $50 or $100 with my membership.... I know its not a $10 mil, but still fund raising.

That's a great Idea !
especially if nothing else comes into play.
Onya Jenni