LUST making healthy progress in efforts to buy stake in Leeds United
YEP 5/10/13by Phil Hay
Community involvement in European football clubs is a creeping phenomenon.
Supporters Direct has the statistics. Thirty three clubs are currently owned by their fans, Portsmouth included, and 73 have a Supporters Trust representative on their board. Supporters Trusts themselves number 190, all of them pursuing a model of football which promotes engagement with the paying public.
These groups are not ploughing a hopeless furrow. In 2009 UEFA president Michel Platini portrayed himself as a man of the people by saying: “Supporters are the lifeblood of professional football. Owners, coaches and players change but supporters always remain.”
Several groups have chased the dream of becoming stakeholders in the clubs they follow. Swansea City’s resurgence can be traced back to the formation of their Supporters Trust in 2001 and the Trust’s purchase of a 20 per cent share. Should the Leeds United Supporters Trust (LUST) have their way, they will follow where Swansea led.
Plans are afoot for LUST to bring forward a proposal to buy a stake in United. For several months the Trust have been working to open the door to investment by adopting new model rules laid out by the Financial Conduct Authority (FCA), one of the regulators of Supporters Trusts in England.
LUST anticipate that they will satisfy FCA requirements in time for their 8,000-plus members to vote on whether to implement the new model rules at a special general meeting in early 2014. The support of their membership is necessary for a fan-share scheme to proceed in earnest.
Gary Cooper, the Trust’s chairman, told the YEP: “This idea arose last summer when it became clear that GFH Capital was trying to buy Leeds United from Ken Bates. We discussed the idea of raising funds to either purchase shares or perhaps help with the buy-back of Elland Road.
“The plan’s grown legs and the Trust have devoted endless hours to dotting the i’s and crossing the t’s with the FCA. It’s been an exhausting process. The model rules strictly lay out what the Trust can and can’t do and we need to adopt those rules before we go forward. Any funds raised would be asset-locked – in other words, ring-fenced for a specific purchase.”
These schemes have a tendency to sound wishful but the Trust are making tangible progress. Members of their board met with two prominent figures at Leeds City Council last month – council leader Keith Wakefield and chief executive Tom Riordan – and were promised what Cooper called “all the support they could give us.” The Leeds Credit Union is also offering help. “That could be pounds, shillings or pence,” Cooper said, “or maybe legal guidance. These schemes are complex.”
The Trust are most likely to aim for a 10 per cent stake in Leeds. Given that GFH Capital’s full takeover cost around £20m, a crude calculation would set the cost of 10 per cent of shares at around £2m.
Cooper refused to declare the exact sum pledged to the Trust so far but said it had so far run into six figures. The larger portions of funding have come from figures in the local business community.
“We had people – supporters who’ve done very well for themselves – saying ‘I can’t afford to buy Leeds United but I’ll help you raise money by pledging £10,000 or £20,000’,” Cooper said. “Individually those sums won’t allow us to buy shares in the club but collectively it means that we’re already looking at six figures committed to the plan.
“We’d hope to raise enough to offer for a 10 per cent stake and we don’t think that’s unachievable. It’ll take a massive amount of work to get there, yes. But we’ve already put a lot of work into this.”
Leeds United themselves are a key component in the Jenga tower. Even with a full trench of money, the Trust’s scheme can only go as far as the club allow. GFH Capital has divided its shareholding since buying Leeds in December, selling over 10 per cent to chairman Salah Nooruddin and another chunk to Bahrain’s International Investment Bank, and it favours the involvement of “strategic investors.”
Interviewed by the YEP on Tuesday, Nooruddin said he and GFH Capital were being “very selective” in who they negotiated with. They wanted “investors who share our vision but also have the financial capability to support the club alongside us.” But Cooper was a guest of Nooruddin’s at the victory over Bournemouth along with Ray Fell, the chairman of the Leeds United Supporters Club. LUST have spoken to the club about their ambition and did not find United unreceptive.
“We’re due to speak again in the future to discuss the pros and cons,” Cooper said. “Leeds United aren’t obliged to engage a fan-share scheme but we hope they’d think that it could be beneficial for everyone.”
An injection of £2million would be beneficial for the club. But what would LUST seek in return? A seat among the directors or specific influence on United’s board?
“There must be people among our fans who could occupy a position, possibly below board level, which allows some sort of direct feed into the boardroom,” Cooper said. “It certainly won’t be me but someone out there would be able to help the club foster the support and the local community. This isn’t about dictating Leeds United’s policies or choosing which players to sign. That isn’t our business. What we’re aiming to do is involve ourselves in a way which actively helps to make the club stable, sustainable and in-touch.”