Lengthy rambling post incoming, btw...
I think there are two different lines of thought being discussed here.
The first is whether the Society should ever use some of its money to invest in the club rather than continuing indefinitely to put everything into the reserve. On that, I can see a strong argument for change.
The second is whether this particular structure is the right way to do it. Iām less certain about that.
One thing I wouldnāt underestimate is the risk of doing nothing. As a club, we are competing against clubs where private owners or investors can put additional capital into training facilities, stadium improvements, commercial infrastructure, recruitment systems and sometimes simply provide financial headroom when itās needed. That doesnāt guarantee success, and badly spent money can obviously achieve very little, but over a number of years that investment can compound.
Better infrastructure can help develop players. Better commercial operations can generate more revenue. Better facilities can improve recruitment. Those things can eventually feed back into the playing budget.
So if Motherwell cannot generate enough surplus internally to fund that type of long-term investment, and also decides not to access Society or external capital, there is a genuine risk of falling behind structurally. For me, that is probably the strongest argument in favour of the principle behind Active Investment.
Where I think we need to be careful is making the jump from:
āMotherwell needs access to investmentā
to:
ātherefore this particular annual rolling-loan model is the answer.ā
They arenāt quite the same thing in my opinion.
The Ā£1.5m reserve is still the first thing I would want clarified. If Ā£1.5m represents the amount the Society believes it prudently needs to protect the club against relegation and an unforeseen event, I still struggle slightly with the logic of diverting half of the default subscription income elsewhere before getting there.
If Ā£1.5m is simply a longer-term target rather than a minimum safety level, that's a different matter. But I think members need to understand which it is.
I also donāt think simply inflation-adjusting an old Ā£1.5m number necessarily gives us the answer. The correct reserve in 2026 should be based on the risks facing Motherwell in 2026, not just what Ā£1.5m from years ago is worth today.
The consultation explains that around Ā£1m could be required in a relegation scenario, plus another Ā£500k for an unexpected loss of income. That sounds reasonable as a starting point, but Iād be interested in how far the downside scenario goes.
For example, what happens if we spend two seasons in the Championship rather than one?
What happens if relegation also affects transfer income?
The consultation itself acknowledges the importance of recent player sales in covering potential shortfalls while the underlying operating deficit is reduced. If we were relegated, there is at least a possibility that player valuations fall, buyers know we are in a weaker negotiating position, some players want to leave, commercial income drops further, and the timing of sales becomes less favourable.
That doesnāt mean Ā£1.5m is wrong, by the way. It just means fans might like to know that those risks have been considered together rather than relegation being treated as a single isolated Ā£1m event.
I also agree with the point made above about the difference between productive investment and plugging ordinary losses.
If the Society lends Ā£200k for a project that has a credible business case and will save the club Ā£60k a year, increase commercial income, improve an asset or otherwise produce measurable long-term value, I can see the logic.
If the money gradually starts disappearing into normal annual operating expenditure, that is a very different proposition.
The answer there could be a pretty firm rule that Active Investment is for identifiable investment projects, not simply another source of working capital to reduce the clubās normal deficit.
That also brings me to the loan structure.
Calling the scheme āActive Investmentā is understandable, but what is currently proposed, from what I can see, is essentially an ongoing shareholder-loan arrangement. Again, there is nothing inherently wrong with that. Private football club owners use shareholder loans all the time.
The difference is that a private owner is normally risking their own capital and may ultimately extend the loan indefinitely, convert it into shares or write it off. The Society is deploying money accumulated from thousands of supporters, so I think the terms deserve more scrutiny.
When the consultation says the investment will be āprotectedā, what exactly does that mean? Is the loan secured? Does it earn interest? Where would it rank against other creditors? What happens if the club cannot repay after the stated period? Is rolling the loan expected to be the normal outcome?
If loans keep being rolled for ten or fifteen years, is the Society effectively providing permanent capital anyway, and if so, would equity sometimes be a more appropriate structure?
I donāt have a predetermined answer to those questions. I just think they are fundamental rather than technical details.
There is also a broader point about how the projects are generated.
Iād much rather the sequence was:
āHere is a project the club believes is worth Ā£250k. Here is what it costs, what it saves or generates, the payback period and why Society finance is the best funding source.ā
rather than:
āWe have Ā£200k of Society money available every year. What can we spend it on?ā
That distinction is important, I think, because otherwise the existence of an annual funding pot can eventually start driving the spending decision.
That is something private owners also have to guard against. Access to easy capital can be useful, but it can also reduce financial discipline.
So Iād probably be somewhere in the middle on the whole thing.
I donāt think continuing forever with every penny going into a bank account is necessarily the best use of the Societyās position as majority shareholder. If other Scottish clubs are investing significantly in their businesses and Motherwell refuses to access any additional capital, there is a legitimate risk that we fall behind over time.
But equally, being the majority shareholder should mean more than simply being the easiest source of finance available to the club. It should mean deploying capital selectively, independently and with a clear understanding of both the upside and the downside.
Thatās why I keep coming back to what seems like an obvious compromise.
Agree the Active Investment framework now if members support the principle. Put the project appraisal process, loan terms and safeguards in place. But unless there is an urgent investment opportunity that makes waiting genuinely disadvantageous, why not maintain the existing default until the reserve reaches whatever level is finally agreed to be prudent?
At that point you have both sides of the model in place: a properly funded safety net and a mechanism for investing in growth.
For me, the question isnāt really whether the Society should invest in Motherwell. The answer is that It probably should.
The more important question is how it does that without weakening the very financial protection that supporter ownership was designed to provide.
