New Investment Options

[steelboy]

I just had a look at the SWPL table and it's noticeable that three of the clubs we are chasing for the top 6 don't have a top division women's team. That's surely handing St Mirren, Dundee and Kilmarnock a financial advantage over us?

If the Society is going to be asking the support to dig deeper then they have to make sure we aren't throwing money away. There's been a lot of talk about Kilmarnock getting KVV but when you consider how much more we spend on the pitch plus training facilities over them then it's obvious how they can afford it. It gives them a clear competitive and financial advantage and it would cost us nothing to try and get the rules changed to even that out. 

To actually have any say on these issues the society would need to have the majority on the club board. It's not feasible to be asking members to put in money to be effective junior partners to people who are putting in nothing. 

[steelman1991]

2 hours ago, steelboy said:

I just had a look at the SWPL table and it's noticeable that three of the clubs we are chasing for the top 6 don't have a top division women's team. That's surely handing St Mirren, Dundee and Kilmarnock a financial advantage over us?

If the Society is going to be asking the support to dig deeper then they have to make sure we aren't throwing money away. There's been a lot of talk about Kilmarnock getting KVV but when you consider how much more we spend on the pitch plus training facilities over them then it's obvious how they can afford it. It gives them a clear competitive and financial advantage and it would cost us nothing to try and get the rules changed to even that out. 

To actually have any say on these issues the society would need to have the majority on the club board. It's not feasible to be asking members to put in money to be effective junior partners to people who are putting in nothing. 

Kilmarnock have a Women's team, but they are currently in SWPL2. Not sure why being in SWPL has any bearing on their expenditure on that front. St MIrren are in SWPL1.

[steelboy]

21 minutes ago, steelman1991 said:

Kilmarnock have a Women's team, but they are currently in SWPL2. Not sure why being in SWPL has any bearing on their expenditure on that front. St MIrren are in SWPL1.

Usually in fitba you get what you pay for. It's been said that the women's team costs the club £250,000 a year. It's not sustainable to be aiming to have a first team breaking even and an academy running at profit while carrying a women's team that is always going to be loss making. The tail is wagging the dug. 

[steelman1991]

I doubt its anywhere close to that figure, but happy to stand corrected. Will that cost figure not be available from the club accounts?

Point I was making is that St Mirren and Kilmarnock's expenditure for Women's teams isn't likely to be any less than ours and isn't necessarily equated to the division they are in. So I would doubt there is any financial advantage.

[santheman]

Maybe one of the first things the new board and CEO in conjunction with the rest of the organisations within the club need to do is have a root and branch audit on everything within the club to see if any savings can be made in terms of staffing and efficiency.

We are a fan owned Community club at the end of the day and that will mean money will have to be spent on community projects like the walking football team the power chair football team and like it or not Steelboy the Ladies set up which has the same right to be part of the club as the numerous boys teams.

The alternative is we stop doing all the Community based activities, and channel all the money into the first team squad which might suit some but not others.

[dennyc]

Whatever happens investment wise, one good thing that must come out of this entire exercise is that all Club expenditure should be assessed to see if it is essential and relates to core business. There seems to be little sense in the WS ingathering funds only for the Club to continue to operate at a loss. If that situation continues then eventually funds will run out. That's not being dramatic and I'm not saying we are anywhere that situation at present but surely the sensible approach is to start that exercise immediately. Any questionable expenditure needs to be addressed as soon as possible.

As the majority Shareholder, the WS is in a position of power and should insist that a full review is undertaken with appropriate action taken if needs be. Society and Club need to work together admittedly, but the Society needs to stand up.  I think it is fair to say that, if the WS were to vote to reduce their holding, any new majority owner would immediately undertake such a review as a matter of urgency. From what we have been told, both potential incomers have already drawn up Business Plans.

Personally I think this model of having to sell at least one player for a sizeable fee per season is flawed and is like operating on a wing and a prayer. And despite several decent sales in recent years, we are still in the position that significant investment is required. How long can that continue? We know that the Club Board is about to change substantially (having run out of ideas????) so hopefully that change will bring about a fresh approach that eventually returns the Business to operating on at least a break even basis. Whoever the major shareholder is.

 

[weeyin]

There's no money to be made operating a football team in the Premiership. That's why the majority of them run at much bigger losses than us.

For me, that's why having an investor take control is a risk. They need to be a philanthropist with a passion for the game and the club, with no aspirations of making a profit. Even then, the club can be left in a major hole if they decide to walk away for any reason.

A secondary question is why would I (or any Society member) want donate money every month for the new owner's benefit so they can cash in a few years down the line?

I understand the current financial pressures too, but any new investment needs to be nailed down with multiple guarantees to safeguard the club - and I'm not sure any investor would be willing to meet those conditions.

I'm open to being persuaded, as I would love to see someone with the right intentions invest in us. I'm just not sure who that would be.

 

[steelboy]

13 minutes ago, weeyin said:

 

A secondary question is why would I (or any Society member) want donate money every month for the new owner's benefit so they can cash in a few years down the line?

 

That's a very good point that no one in the Society has addressed. The suggestions about a takeover from various places involving new shares effectively amounts to giving over a controlling interest for free. That might not be the case but it's went very quiet on the takeover front. 

[dennyc]

3 minutes ago, weeyin said:

There's no money to be made operating a football team in the Premiership. That's why the majority of them run at much bigger losses than us.

For me, that's why having an investor take control is a risk. They need to be a philanthropist with a passion for the game and the club, with no aspirations of making a profit. Even then, the club can be left in a major hole if they decide to walk away for any reason.

A secondary question is why would I (or any Society member) want donate money every month for the new owner's benefit so they can cash in a few years down the line?

I understand the current financial pressures too, but any new investment needs to be nailed down with multiple guarantees to safeguard the club - and I'm not sure any investor would be willing to meet those conditions.

I'm open to being persuaded, as I would love to see someone with the right intentions invest in us. I'm just not sure who that would be.

 

Looking at our recent financial results and the resultant year on year reduction in on field quality, is carrying on like we are not also a risk? Yes, other Club's incur losses but few try to operate as a fan owned business. Or where fans do represent a major shareholding there is also external funding prepared to cover losses. Hearts being a classic example where even a huge fan membership is insufficient to sustain the football club at the level they wish to operate.  How long can the WS continue to subsidise the football Club? Because that is what is currently happening. if the football Club cannot operate on a break even basis, which you appear to believe will be the case, funds will run out eventually. Just like any other business. Tough decisions need to be made.

I do agree that Guarantees need to be inbuilt if outside investment is secured. And folk are right to be cautious. The Club and its assets must be protected whatever happens. But, if the WS is to continue as "owner", then a fundamental look at how the Club operates is essential. The bottom line is that the WS can only generate so much finance. Therefore the Club, in whatever guise, needs to play its part. The current situation is really no surprise, setting aside the 'feel good' factor of being fan owned and the plaudits that attracts. The changes to the Club Board which are about to take will hopefully bring about fresh ideas and a huge step forward.

[weeyin]

I completely agree there needs to be a proper financial assessment and plan in place. Like all businesses that should start with an annual forecast and reviewed monthly to see what's working, what's not working and if anything needs to be changed.

Then it needs a proper review at the end of the year and fed back into the next year's planning.

That also feeds into my concerns about a new investor. As a fan owned club, a plan to break even every year is ideal as it gives us the maximum amount of cash flow to run the club without having to worry about dividends or profits for shareholders.

If an investor is expecting a financial returns then decisions could be made that are in the best interests of them rather than the club. There will be some overlap, but not always.

The biggest challenge with a football club is that in many ways it's not like a regular business. It's obviously a lot more difficult to attract customers from a rival product regardless of how attractive you make yours, so expanding your reach in the market is very difficult.

Likewise, you can't really introduce a new product line because football isn't working.

I also doubt there are many, if any, new ideas available as it's difficult to innovate for the same reasons. There are quite a few successful businessmen who have failed at football club ownership because of these built-in restrictions.

As I said, however, I am open to persuasion by a new owner, but I'll want to see all the details of the plan.

 

[steelboy]

It's worth remembering that the club has turned a profit overall since it became fan owned. It's also been less than 2 years since we were in a strong enough position to undertake a large infrastructure project. 

I can't help but feel that the We're Skint video and the talk of a black hole and SPFL deadline are designed to deflect from that. 

 

 

[dennyc]

1 hour ago, weeyin said:

I completely agree there needs to be a proper financial assessment and plan in place. Like all businesses that should start with an annual forecast and reviewed monthly to see what's working, what's not working and if anything needs to be changed.

Then it needs a proper review at the end of the year and fed back into the next year's planning.

That also feeds into my concerns about a new investor. As a fan owned club, a plan to break even every year is ideal as it gives us the maximum amount of cash flow to run the club without having to worry about dividends or profits for shareholders.

If an investor is expecting a financial returns then decisions could be made that are in the best interests of them rather than the club. There will be some overlap, but not always.

The biggest challenge with a football club is that in many ways it's not like a regular business. It's obviously a lot more difficult to attract customers from a rival product regardless of how attractive you make yours, so expanding your reach in the market is very difficult.

Likewise, you can't really introduce a new product line because football isn't working.

I also doubt there are many, if any, new ideas available as it's difficult to innovate for the same reasons. There are quite a few successful businessmen who have failed at football club ownership because of these built-in restrictions.

As I said, however, I am open to persuasion by a new owner, but I'll want to see all the details of the plan.

 

All valid points and in truth I think we agree on several points.

Regards any investor having a conflict of interest on occasion, I think that is where safeguards are essential. Examples such as ....

No Security granted over assets such as Fir Park as a protection against knee jerk overreaction/asset stripping, a timescale for any outstanding Loans to the investor being repaid upon departure, a limit on remuneration to an investor (and dependant upon year end financial results), a proviso that the WS would be given a realistic price and timetable to be in a position to repurchase shares from any departing investor, an binding agreement that a % of any profits must remain within the Club.

I accept that many investors would be put off by such conditions. But Hibs appear to have successfully negotiated similar terms and without even having to give up majority ownership. Not an easy task, but it can be done.

25 minutes ago, steelboy said:

It's worth remembering that the club has turned a profit overall since it became fan owned. It's also been less than 2 years since we were in a strong enough position to undertake a large infrastructure project. 

I can't help but feel that the We're Skint video and the talk of a black hole and SPFL deadline are designed to deflect from that. 

 

 

And without the Turnbull monies that picture would be entirely different. Relying on the sale of a player for millions every other season is not realistic nor sensible. It certainly hasn't worked of late. As the quality on the pitch declines year upon year and investment in youth is reduced through necessity, it becomes less advisable as a strategy. Contract situations are another barrier that is not going away. Blair Spittal apparently joining others that have departed in their prime with no return. So again, for how long can the WS continue to subsidise  the football club to the degree it has of late?

[Mintymac]

As he stated Derek Weir finishing up in a fortnights time as is his wish . 
Is there likely to be another interim CEO or is it likely he’ll extend beyond that .

Im more inclined to think the later will be the option . 
Maybe a short update would be appropriate ?

[Kmcalpin]

1 hour ago, Mintymac said:

As he stated Derek Weir finishing up in a fortnights time as is his wish . 
Is there likely to be another interim CEO or is it likely he’ll extend beyond that .

Im more inclined to think the later will be the option . 
Maybe a short update would be appropriate ?

Absolutely. As a fan owned club, its not unreasonable for members to be told if we have a CEO and if so, who it is.  

[weeyin]

Well Society Board meeting is on Monday. Might be a good question to submit to them.

You can email questions to the same address that you receive the weekly emails from.

[steelboy]

3 hours ago, Mintymac said:

As he stated Derek Weir finishing up in a fortnights time as is his wish . 
Is there likely to be another interim CEO or is it likely he’ll extend beyond that .

Im more inclined to think the later will be the option . 
Maybe a short update would be appropriate ?

If he stays on after both setting a deadline to leave and refusing to look for a full time CEO it will be utterly absurd. 

We really need a Q&A Society meeting to find out exactly what is going on.

[Mad Dog]

36 minutes ago, steelboy said:

If he stays on after both setting a deadline to leave and refusing to look for a full time CEO it will be utterly absurd. 

We really need a Q&A Society meeting to find out exactly what is going on.

What do you mean by "refusing to look for a fulltime CEO"? My understanding is that interviews have taken place and that there is now a shortlist for the role. Please correct me if I'm wrong.

[weeyin]

50 minutes ago, steelboy said:

If he stays on after both setting a deadline to leave and refusing to look for a full time CEO it will be utterly absurd. 

We really need a Q&A Society meeting to find out exactly what is going on.

He said he wouldn't "walk away and abandon the club" if CEO wasn't' in place before the end of March.

More importantly, we'd be crazy to appoint a new CEO before a new investor comes in as they will want to impose their own structure and staff on the board. We don't want their first piece of business to be paying off the new CEO.

[steelboy]

1 hour ago, Mad Dog said:

What do you mean by "refusing to look for a fulltime CEO"? My understanding is that interviews have taken place and that there is now a shortlist for the role. Please correct me if I'm wrong.

As I understand it they stopped looking for a new CEO when they started talking to potential new owners. 

[Mad Dog]

2 hours ago, steelboy said:

As I understand it they stopped looking for a new CEO when they started talking to potential new owners. 

Right, so they actually were looking then.

[Yabba's Turd]

What is anything at Motherwell without steelboy's unique 'everything and everyone at the club is a dick/pish/out of their depth'?

 

[Kmcalpin]

An interesting survey from the Society, which I received yesterday. Hope all members received the email.

https://t.co/TIOYhXivPN

Its also illuminanting the number of members who have updated their contact details.

[steelboy]

17 hours ago, Mad Dog said:

Right, so they actually were looking then.

They haven't been looking for a CEO at all since well before Christmas. 

[Mad Dog]

3 hours ago, steelboy said:

They haven't been looking for a CEO at all since well before Christmas. 

So your original claim that the club have refused to look for a new full-time CEO is incorrect then.

[steelboy]

19 hours ago, Mad Dog said:

So your original claim that the club have refused to look for a new full-time CEO is incorrect then.

I think the pertinent issue is that we are about to go into our second summer without a full time CEO. Weir is only hanging around in the hope of giving the club over to private investors for buttons.