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Share Liverpool FC - Fans Buyout Initiative

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Comments

  • Registered Users, Registered Users 2 Posts: 2,544 ✭✭✭redspider


    Yeah, I agree with you An Citeog that the Barcelona model is completely different than the proposed Share LFC model. There are a number of problems/difficulties with the proposal which will make it difficult to execute. I intend to contact them about the issues and I suggest you do likewise. Pulling it off in its current guise will be hard, but if there are some adjustments it may be, may be possible, albeit a long shot.

    In terms of the financial clout of G&H, they have used their non-Liverpool assets to get access to funds/loans and they've used that to buy LFC, first with the 300m loan (they paid 220m to the previous LFC shareholders) and more recently with the 350m 18-month loan. However, they have not in net terms have to put in a cent of their own money (yes, they have personal debt but that's just accounting, as it can be moved onto the club in a blink of an eye). Share LFC obviously wouldnt have any other assets apart from the football club itself. It would have to be self-financing, from the revenues and income it would make. Whether that would make the stadium project more difficult or not is hard to tell, without getting into the nitty gritty details. But in general terms, I think G&H may get slightly better terms/more money than Share LFC would likely be able to muster. That could mean a quicker buildling of the stadium under G&H. But both approaches are doable and financially possible.

    The key is of course maintaining success on the pitch. Whether a Share LFC-ran club will be able to do that any better than a G&H or DIC-ran club is open to debate and conjecture.

    Redspider


  • Registered Users, Registered Users 2 Posts: 29,372 ✭✭✭✭Mr Alan


    If DIC buy Liverpool, which it looks like they are going to... in a perfect world we could buy the club off them in 15 years when the stadium is built and paid off :)


  • Moderators, Recreation & Hobbies Moderators Posts: 21,254 Mod ✭✭✭✭Dub13


    Mr Alan wrote: »
    If DIC buy Liverpool, which it looks like they are going to... in a perfect world we could buy the club off them in 15 years when the stadium is built and paid off :)

    But how much do you think it would cost then...?This Share Liverpool idea would have been easer to achieve 5/10 years ago.


  • Registered Users, Registered Users 2 Posts: 2,544 ✭✭✭redspider


    Dub13 wrote: »
    But how much do you think it would cost then...?This Share Liverpool idea would have been easer to achieve 5/10 years ago.

    Yes, very much so. I dont think it is precedented in any sport for fans/members to buy it after it has become so successful financially. That, as they say, is a very big ask.

    In terms of the Share-LFC proposal, here are some of my thoughts:

    > Let's put Liverpool FC in the hands of the only 'owner' who can be trusted. The fans.

    Fans cant be trusted to run a club no more than anyone else can, including perceived unscrupulous owners who are only there to make a buck. It is clear that there is a relationship between a club making profits as a business and success on the field – indeed, success on the field brings in money/profits, which can drive further success, etc. It’s a virtuous circle. But who is to say that a fan-ran club will be any more successful than an ‘owner’ led one? There are no guarantees. Non-member fans will have a right to be vexed at Share-LFC-member fans if success would suddenly go majorly awry, so it will create two sets of fans, those that have membership and those that don’t. Also, with a 5k ukp entry to that membership, its not as if the membership is open to one and all.

    > Leading the initiative: Rogan Taylor, Director of the Football Industry Group at the University of Liverpool, advising the group: Supporters Direct: The organisation that assists in the formation of supporters’ trusts, Kevin Jaquiss, of the law firm, Cobbetts, a firm that has played a leading role in the development of mutuals and co-operatives (he wrote the model constitution which is now used by over 100 trusts in the UK).

    It’s very useful having people like these who have been involved in supporters trusts, analysis of the football industry, mutuals, etc and for them to be active and lead the set-up. However, I think it should be stipulated up front that those involved in organising the set-up of Share-LFC and its formative years, should NOT be allowed on the committee or have ambitions to become ‘presidents’ of the club, etc. In that way, they can have no ‘conflict of interest’ or ‘self interest’ as it were. There is always a fine balance in any mutual, between the ‘executives’ and employees of the mutual and the members of the mutual itself. In many, the executives over the years adjust the constitution/operation so that the mutual becomes their ‘plaything’ and more for their benefit rather than that of the members, and indeed they reap plenty of rewards for doing so. I’m not saying that will happen with Share-LFC, but it could happen, and gradually. It will be a challenge going forward in a mutual the size of Share-LFC, valued at 350m+. To prevent any benefit accruing to the ‘founders’ of Share-LFC, they could declare that they will in no way have any benefit from being involved nor will have in Share-LFC. They should effectively be volunteers.

    > We propose a model of ownership similar to that at Barcelona. This club is owned by their ‘members’. Over 100,000 fans have bought single 'member' shares, which entitle them to elect a Board who will run the club until the next election. At Barcelona it is once every four years.

    There is a big difference between the clubs of FC Barcelona and Liverpool FC. For one, Barcelona is seen as something like the Catalan ‘international’ team (albeit the team is not made up of Catalans), so there is a huge amount of fervour and fanaticism. It’s not easy to match that, and it will take time to build up a Share-LFC mutual which has an equal level of 'commitment' among its members. There are difficulties electing a board for the first time at such a big club as Share-LFC would be. How will the credentials of the board be known by the 100,000? Are well-known faces (eg: an ex-Player) likely to be put up yet who would have less capability executive and board-wise than a non-entity? These problems are not easy to surmount. Also, in the early years and perhaps ongoing, 4 years is too long to keep a board. The Barca system is also different as new boards going up for election promise money for investment if they get elected. Is that what will happen at Share-LFC? Will we end up with ‘unscrupulous’ owners, who akin to politicians, are in (no matter what) for at least 4 years? And membership fees are completely different. This is NOT a Barca model and should not be dressed up as such.

    > That way, no one can ever buy the club. Its structure makes its sale to the next sporting conglomerate that fancies a premiership football club a legal impossibility. The shares can never be sold; the club can never be sold.

    Never say never. It can always go into receivership! But there will need to be some mechanism to transfer membership along, as people do not live forever. And surely people should not be expected to help buy a club and become a member of a mutual without their being any potential financial gain in the long term? Even mutuals have this as an option. So, at the very least the value of the shares/membership could rise with valuations of the club when they are made. Perhaps a ‘grey’ market at contolled prices could be made available via Share-LFC. Who knows, maybe a member will need 5k for a child's operation or something. Also, having a regulation that the ‘club can never be sold’, is that wise? Maybe at some point the club will need to be sold, or at least invested in again.

    > Lets stop Liverpool Football Club becoming a trinket any rich man might like to wear around his neck. This club is close to the hearts of millions of people all over the world. How much will it cost? We estimate that a sum of £5,000 each will be enough. We need 100,000 members. 100,000 x £5,000 = £500 million. That should buy the club and go a long way towards building a new stadium.

    Setting a figure of 500 million is already setting an indicative valuation on what Share-LFC is willing to pay for LFC. 5k per person is also high in comparison to what people currently pay for season tickets, and this will disenfranchise many. Why set the 500m value now? Like other ‘share subscriptions’, why not get a measure of interest first and gather amounts that people would be willing to pay, and then set the price and membership. Perhaps a vote could be UKP 1,000 and people could be limited to owning 5 votes. (or 500ukp and 10 votes, or another system). That would allow more people in at lower levels, and indeed choose the level they want. There is also no guarantee that the sum of ukp 500 million ‘will buy the club’. Even if the amount is seen at above the previous valuations, G&H will not want to sell it at anything less than 500 million if that’s what’s gathered by Share-LFC. In other words, Share-LFC are recealing their hand before any negotiating is done. Share-LFC have no plan B with the money if their bid to buy fails. Interest to charity should be an option.

    > How does it work? No one can own more than one ‘member share’ and, apart from the initial purchase, these ‘member shares’ cannot normally be sold on. If you buy a ‘member’ share: No one will ever own more of Liverpool FC than you do, and you will be able to take part in any election to decide who runs Liverpool FC.

    These benefits could still apply even if a lower vote level system is used, such as the ukp 100 level, and people having 1 to 5 votes. Maybe even the upper limit could be increased to 10k, with people having 1 to 10 votes.


    More thoughts later ..... but generally there are a lot of factors with the proposed system which are against it. However, with some tweaking, it could be a vehicle that could make a bid for Liverpool, but I would expect it to take at least a couple of years to get going. That will give DIC another window of opportunity to bid for LFC if they want to prise it away from G&H, or Hicks.

    Redspider


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