Phil Hay - Serious financial backing can only enhance Leeds LLP’s cause
Yorkshire Evening Post 4/4/15
Six months is an eternity in British politics and long enough to erode the most cast-iron pledges but back in October the Labour Party made a promise about using legislation to transfer power from football club owners to the supporters beneath them.
The proposals as they were reported at the time went like this: recognised supporters trusts would have a legal right to at least two seats on their clubs’ board of directors. Investors buying more than 30 per cent of a club – as Massimo Cellino did with Leeds United last April – would be obliged to offer trusts a minority stake at the average share price. Labour said it was a way of ensuring that where the interests of supporters are concerned, “their voice is heard.” All well and good, apart from the usual caveats that come with manifesto commitments. First up, Labour needs to win the General Election. Then it needs to prove that the pledge was more than an example of expedient bandwagon-jumping. And beyond that it needs the sport to play ball.
Shaun Harvey, the Football League’s CEO, warned of the proposals “acting as a disincentive” to prospective owners and said Labour’s policy might leave fans prone to “unacceptable levels of financial risk.” It sounded like outright opposition from the heart of the game. While quoting him, the Daily Telegraph was unable to draw comment from a single major club. Which says a lot in itself.
Supporters who seek influence on a club’s board therefore have a choice. They can believe in the tooth fairy and wait for politics to help them or they can raise money and buy their way in, as fans have already done at Swansea City, Portsmouth and Heart of Midlothian. The tide is undeniably turning but it will be a strange day when owners open the boardroom to the rank and file in return for nothing.
To their credit, Leeds Fans LLP seem to grasp that fact. The most encouraging aspect about the group angling for a shareholding in Leeds United is that they have approached the idea with a generous amount of realism. Their target is a minority stake, rather than an outright purchase of Leeds, which figures when the general view is that the cost of removing Cellino, satisfying Gulf Finance House and settling other bills would run to £50m. No supporter-led takeover in the UK has ever involved a sum so huge. The amount which Leeds Fans LLP talk about raising – £5m to £10m – might buy a club in administration but no-one is interested in that eventuality.
On Thursday the group outlined its fundraising plan and launched a community benefit society (CBS) allowing individual supporters to commit anywhere between £100 and £10,000. FC United of Manchester amassed £2m through a similar scheme, managed by the same legal team which Leeds Fans LLP are now using, seemingly at very low cost. The CBS is aimed at the majority within United’s fanbase. A further two ways of investing will be initiated shortly, primarily set up to secure larger donations. The reasons for the multi-pronged approach are complex but in simple terms, the law dictates how Leeds Fans LLP should handle investment depending on the sums of cash involved.
There is an acceptance among the group that the take-up must be resounding. The plan has to make waves and their targets have to be attainable. Leeds Fans LLP say a minimum of £2.5m is required to “acquire a meaningful stake” and make United’s board sit up. They haven’t spoken to Cellino directly and don’t yet know where he stands on the issue of supporter investment or whether he’ll be here long enough for his views to matter. They haven’t spoken to GFH either or established whether the bank is inclined to sell its minority stake in Leeds.
In addition, it’s not entirely clear how much of United GFH actually controls. The current split of shares as stated on the club’s website sets its holding at less than three per cent, compared to Eleonora Sport’s 97 per cent. The bank and the club expect GFH’s stake to rise to 25 per cent when they ratify a deal to restructure sizeable amounts of debt, converting parts of it into equity, but Cellino has been promising a deal like that since July of last year.
Leeds Fans LLP want clarity on these matters, much like the rest of us. They will be driven too by the endless line of operational landmines that United insist on tripping. Steve Thompson and Mirco Antenucci are the newest additions to the list, and as shambles follows shambles the realisation dawns that this will never end; not with Cellino in situ. But none of these issues strengthen Leeds Fans LLP unless the scheme launched this week does what it’s supposed to do. In fairness to the group, they delayed in asking questions or approaching the main players at Elland Road while their plan was still to be conceived. There was never much point in talking about hypotheticals. The equation now is quite simple: a serious response and a weight of money turns their idea into a movement. Anything less than that is white noise.
Good luck to them.
Six months is an eternity in British politics and long enough to erode the most cast-iron pledges but back in October the Labour Party made a promise about using legislation to transfer power from football club owners to the supporters beneath them.
The proposals as they were reported at the time went like this: recognised supporters trusts would have a legal right to at least two seats on their clubs’ board of directors. Investors buying more than 30 per cent of a club – as Massimo Cellino did with Leeds United last April – would be obliged to offer trusts a minority stake at the average share price. Labour said it was a way of ensuring that where the interests of supporters are concerned, “their voice is heard.” All well and good, apart from the usual caveats that come with manifesto commitments. First up, Labour needs to win the General Election. Then it needs to prove that the pledge was more than an example of expedient bandwagon-jumping. And beyond that it needs the sport to play ball.
Shaun Harvey, the Football League’s CEO, warned of the proposals “acting as a disincentive” to prospective owners and said Labour’s policy might leave fans prone to “unacceptable levels of financial risk.” It sounded like outright opposition from the heart of the game. While quoting him, the Daily Telegraph was unable to draw comment from a single major club. Which says a lot in itself.
Supporters who seek influence on a club’s board therefore have a choice. They can believe in the tooth fairy and wait for politics to help them or they can raise money and buy their way in, as fans have already done at Swansea City, Portsmouth and Heart of Midlothian. The tide is undeniably turning but it will be a strange day when owners open the boardroom to the rank and file in return for nothing.
To their credit, Leeds Fans LLP seem to grasp that fact. The most encouraging aspect about the group angling for a shareholding in Leeds United is that they have approached the idea with a generous amount of realism. Their target is a minority stake, rather than an outright purchase of Leeds, which figures when the general view is that the cost of removing Cellino, satisfying Gulf Finance House and settling other bills would run to £50m. No supporter-led takeover in the UK has ever involved a sum so huge. The amount which Leeds Fans LLP talk about raising – £5m to £10m – might buy a club in administration but no-one is interested in that eventuality.
On Thursday the group outlined its fundraising plan and launched a community benefit society (CBS) allowing individual supporters to commit anywhere between £100 and £10,000. FC United of Manchester amassed £2m through a similar scheme, managed by the same legal team which Leeds Fans LLP are now using, seemingly at very low cost. The CBS is aimed at the majority within United’s fanbase. A further two ways of investing will be initiated shortly, primarily set up to secure larger donations. The reasons for the multi-pronged approach are complex but in simple terms, the law dictates how Leeds Fans LLP should handle investment depending on the sums of cash involved.
There is an acceptance among the group that the take-up must be resounding. The plan has to make waves and their targets have to be attainable. Leeds Fans LLP say a minimum of £2.5m is required to “acquire a meaningful stake” and make United’s board sit up. They haven’t spoken to Cellino directly and don’t yet know where he stands on the issue of supporter investment or whether he’ll be here long enough for his views to matter. They haven’t spoken to GFH either or established whether the bank is inclined to sell its minority stake in Leeds.
In addition, it’s not entirely clear how much of United GFH actually controls. The current split of shares as stated on the club’s website sets its holding at less than three per cent, compared to Eleonora Sport’s 97 per cent. The bank and the club expect GFH’s stake to rise to 25 per cent when they ratify a deal to restructure sizeable amounts of debt, converting parts of it into equity, but Cellino has been promising a deal like that since July of last year.
Leeds Fans LLP want clarity on these matters, much like the rest of us. They will be driven too by the endless line of operational landmines that United insist on tripping. Steve Thompson and Mirco Antenucci are the newest additions to the list, and as shambles follows shambles the realisation dawns that this will never end; not with Cellino in situ. But none of these issues strengthen Leeds Fans LLP unless the scheme launched this week does what it’s supposed to do. In fairness to the group, they delayed in asking questions or approaching the main players at Elland Road while their plan was still to be conceived. There was never much point in talking about hypotheticals. The equation now is quite simple: a serious response and a weight of money turns their idea into a movement. Anything less than that is white noise.
Good luck to them.
