New Investment Options

[steelboy]

3 minutes ago, Stuwell2 said:

I don’t know but the £300K per year mentioned earlier is less than 10% of our current turnover but if the £1.5M figure I seem to remember as our players wage bill is correct and the money all went to this then that’s a 20% increase. 

 

The total wage bill for the club is £5 million per year. 

The player wage bill is far higher than £1.5m per season.

As I pointed out the other day we reported a (slightly) higher turnover and wage bill than our new CEO's old club Shrewsbury Town who are midtable in League One in England. It suits the club to have the support thinking we are operating on a shoe string budget but it's not true at all. 

[StirlingDosser]

7 minutes ago, Stuwell2 said:

Obviously we need to wait and see what the offer is and how it is structured but what do folk seriously think would be an acceptable level of investment for a minority control of the club?

I don’t know but the £300K per year mentioned earlier is less than 10% of our current turnover but if the £1.5M figure I seem to remember as our players wage bill is correct and the money all went to this then that’s a 20% increase. 

You could equate that to one extra player on just under £6K per week, two extra players on £3K or three extra players on £2K per week. Would bringing in one, two or three players who would accept these wages really change things or guarantee our top flight survival long term? I don’t think so. In which case what would be the point or worth of accepting such an offer?

You're absolutely correct if we are aiming for the investment to be for the playing squad, but we have to modernise. If we were taking in say 300k a year investment (which is on the low side), that could allow us to gradually invest in modernisation of infrastructure over the coming years without impacting our current player budget. At present, any major 'patch up job' which needs done (of which in the future there will be a few big ones given the age of the Phil O'Donnell Stand for example), will likely lead to cuts to the recruitment budget.

[Kmcalpin]

30 minutes ago, steelboy said:

It's all worth bearing in mind that the Well Society doesn't have  majority control of the executive board.

Maybe I'm mistaken, but I thought it did. There are 3 directors, two of which come from the Society. The exception is Jim McMahon. I believe there are plans afoot to increase the size of the Board  

[stv]

4 hours ago, wellup83 said:

Add neither should they be. Fan owned or not, divulging potentially sensitive information to the Society would be making details of the negotiations public knowledge basically. I'm more than happy to wait for the details then say yes or no. The one thing that worries me is do we have enough intelligent, level headed members to make an informed and correct choice for the good of the club when the time comes?

Steelboy. He has all the answers bùt no solutions

[Great Balls of Shire]

2 hours ago, Dee said:

 

There's quite a lot to unpack there, some which I agree with and some which I don't. 

Let's start with where I do agree - in an ideal world it would be excellent to have our own training facility and the stadium needs modernised to an extent to make corporate days and hospitality more appealing. Both fair comments. 

Where I believe your argument falls down is the Dundee United comparison. Firstly, Dundee United are a much bigger club than Motherwell. Their average match-day attendance is almost double ours and their wage bill sits at £6.9million - significantly higher than ours. On top of that their recent annual accounts reported a £5m loss - up from £1.9m the year before - before player sales were taken into account. This all going on whilst under American ownership. In the 5 years under American ownership, United have experienced, as you rightly point out, relegation, they've had 6 different managers, protesting fans and have spent upwards of £10 million. 

Said American owner has continued spending and most worryingly has done this with an interest free loan against the club. I couldn't tell you the current total but a couple of years ago their accounts listed that the club owe said investor over £9m. How will they ever pay this back? Certainly a worrying situation. 

To quote a 'Well fan journo who penned this in a previous Herald article about United; 

"Wealthy benefactor? Check. Money being ploughed in? Check. Wages wildly exceeding turnover? Check. Careening through managers? Check. Success? That cheque is still in the post."

Now I know this thread is very much about Motherwell with the figures of our deal and details of the investors still to be presented to the wider fanbase, but it's certainly worth noting that not one American investor has brought notable success since they put their money into a Scottish football club. That success may come, but it's not guaranteed. 

And I'm not here to convince anyone that we shouldn't be entertaining any external investment, far from it. I think it's important we listen to all credible offers that come our way. I'm also not comparing the deal on the table at Fir Park to that at Dundee United, I'll wait until we all know the full facts. But I think it's hugely important to have a serious think about what our red lines are.

What do we value the football club at? What percentage of control would we be willing to relinquish and for what cost? What does any investor want to gain from putting their money into Motherwell FC? 

I must admit I hadn't even thought about Dundee Utd, that's where the due diligence would need to be spot on

Hopefully we wouldn't be signing forwards on between 4 and  8 k per week...it was ridiculous they were relegated with the wage bill they had.

[ropy]

1 hour ago, Great Balls of Shire said:

I must admit I hadn't even thought about Dundee Utd, that's where the due diligence would need to be spot on

Hopefully we wouldn't be signing forwards on between 4 and  8 k per week...it was ridiculous they were relegated with the wage bill they had.

That is my concern, we receive a bit of money, we attract ‘better’ players on higher wages and this becomes the norm when the money disappears.  We need to understand the lifespan of any investment and the exit strategy once the fun stops.

I would rather we received some money for some American with Scottish heritage to show off to his pals for a couple of years then disappear than some investor thinking there is money to be made.  I would also rather any money went into the infrastructure of the club and the stadium and leave the players on the pitch to be paid for by us punters, sponsorship etc i.e keep our running costs at a sustainable level but take advantage of the opportunity to secure our long term future.

[David]

7 hours ago, wellup83 said:

Add neither should they be.

No, they most definitely should be involved in the discussions and proceedings. As majority shareholders, that should be a given. 

7 hours ago, wellup83 said:

Fan owned or not, divulging potentially sensitive information to the Society would be making details of the negotiations public knowledge basically.

There's a difference between the elected representatives of the Society board being involved in proceedings and any information being divulged to the wider membership base. 

[steelboy]

3 hours ago, Kmcalpin said:

Maybe I'm mistaken, but I thought it did. There are 3 directors, two of which come from the Society. The exception is Jim McMahon. I believe there are plans afoot to increase the size of the Board  

Jay from the Society board posted this on P&B on the 5th of March.

Quote

The short answer to your question is no, the Executive Board call the shots with regards to the football club, not the Well Society Board. The setup - certainly since I've been involved - has been a five person Executive Board with the Well Society possessing two seats. The Chairman throughout that time has not been a Well Society representative. This has essentially meant that the Well Society Board can make a case to its two representatives on the Executive Board for something, while hoping that that they then make that case on the Society's behalf within the club boardroom. But even if they do, there's no guarantee that the Executive Board will make anything of it.

So the Well Society don't have control over the Executive Board despite owning 70% of the club. McMahon is one of the three non WS Executive Board members, the other two are a mystery to me and don't seem to be listed anywhere on the club website.

Again this is another example of why we are miles away from being able to have an informed and responsible debate about any proposals. There's very little accurate information available about the club and Society's financial position and structure and there are a lot of wrong assumptions out there amongst the support which is entirely down to the club and Society choosing to keep us in the dark. The argument has always been that Society members don't need to be involved in the day to day decision making of the club which everyone agrees with but the structure and overall financial position of the Society and club should be available and easy to understand for members.

I'd like to see the Society set out a few points which I think would clear things up.

1. The overall profit/loss since the Society became majority shareholders. I've seen people say on P&B that we are in profit over the period, other people say it's unsustainable. Which is it?

2. What is the playing budget and add some context because £2.3m or £2.8m doesn't really mean much but pointing out clubs which spend a roughly equivalent amount in Scotland, England and Europe would give us a good idea of where we stand.

3. How much funding have the Society given the club directly and in loans? How much have the Society given to the Community Trust?

4. Why do the Society board feel we are best represented by having a minority position on the club executive board? 

If the Society board answer these questions we would all have a clearer idea of how fan ownership is working.

[fizoxy]

Hopefully things will be clearer when the Well Society complete their governance work stream, but some folk could do with learning what boards, executives, and shareholders do in general.

 

[David]

1 minute ago, fizoxy said:

Hopefully things will be clearer when the Well Society complete their governance work stream, but some folk could do with learning what boards, executives, and shareholders do in general.

I'm not really sure it's on fans to learn what boards, executives, and shareholders do, though. It's on the club and our representatives to convey the required information clearly and in a way that can be understood by the wider fanbase.

As you say, the Society has certainly grabbed the bull by the horns when it comes to the way they want to do things moving forward, so let's hope that a lot of what people on this forum and elsewhere are asking gets answered over the coming weeks and months.

[Casagolda]

Here is a question then.

If the Well Society doesn't have a majority on the board. Can the board issue new shares and sell them to an investor without the approval of the Well Society?

[steelboy]

4 minutes ago, Casagolda said:

Here is a question then.

If the Well Society doesn't have a majority on the board. Can the board issue new shares and sell them to an investor without the approval of the Well Society?

No shareholders need to approve that. 

[Kmcalpin]

If we do indeed have 5 Directors on the Executive Board, who are the other two? It's a simple question and in no way breaching confidentialities. I'm aware that Andrew Wilson resigned a wee while ago. 

[steelboy]

3 minutes ago, Kmcalpin said:

If we do indeed have 5 Directors on the Executive Board, who are the other two? It's a simple question and in no way breaching confidentialities. I'm aware that Andrew Wilson resigned a wee while ago. 

As far as I can tell the club legally has three directors. 

So there are two people on the Executive Board who aren't directors.

[Kmcalpin]

7 minutes ago, steelboy said:

As far as I can tell the club legally has three directors. 

So there are two people on the Executive Board who aren't directors.

Just checked the annual accounts for year ended May 2023. There were four, but as we know, Andrew Wilson resigned. Maybe Graham Keyes, the company secretary is one?

Graham McGarry, writing in the Herald, says that the current situation with the Society and the Executive Board is akin to the tail wagging the dog. 

[texanwellfan]

One thing that I don’t fully understand is that the well society is the major share holder but votes as a unit (from what I’ve read but could be wrong). So does it get viewed as ‘one vote’ on the board or does it get viewed as the vote of X amount of share holders?  If it gets treated as the vote of X amount of share holders by the board (voting as a unit) then I don’t think that is right. If the WS vote is split 60/40 or 30/70 or whatever it should be presented that way at the board to reflect the will of the share holders rather than taking the vote of a group of shareholders and basically flipping their vote, whichever way. 
    I can see simple majority votes when the WS wants to decide on an action that is a decision to be made by the WS, like should we give money to the club to help cover cost of pitch upgrade but when it’s a vote to be made regarding an action to be taken by the club the each share holder should have their vote counted as they cast it and not nullified by being in a group such as the WS. 
   Another point is that not all members contribute the same so does higher contributions mean more votes or shared? That applies to voting to decide as a unit and also if they were to present any vote as a ratio of for and against. 

[steelboy]

Every Society member owns 1 voting share in the Society. 

Having effectively proportional representation makes no sense. It opens up the possibility that the Well Society members could vote 70% against the takeover but the overall shareholders vote goes in favour of it. 

In that scenario the Society assets are hugely reduced in value against the wishes of the membership. 

If you wanted a direct vote the shares were on sale dirt cheap not long ago. 

[wellfan]

47 minutes ago, Kmcalpin said:

If we do indeed have 5 Directors on the Executive Board, who are the other two? It's a simple question and in no way breaching confidentialities. I'm aware that Andrew Wilson resigned a wee while ago. 

This is all I can find:

https://www.motherwellfc.co.uk/club/corporate-information/the-board/

[steelboy]

Motherwell supporting Herald sports writer Graham McGarry has a column up about the potential investment. Bolded bits are most relevant imo

https://www.heraldscotland.com/newsletters/bulletin/2605/?nid=2605&ref=eb

Quote

 

Fundamentally, the news this week that the club have entered into a non-binding Heads of Terms with a US-based family hasn’t materially changed my viewpoint on potential investment, or really changed the situation as yet.

I, like many others I would guess, are not entirely against the idea of outside investment, but it all depends on what the club would be giving away in order to secure it. My red line would be the ceding of the ‘Well Society’s majority shareholding, but I also have misgivings about giving away any sort of shareholding in the club if that wasn’t in exchange for a commensurate level of investment.

As yet, we do not officially know the figures involved, in terms of either the proposed level of investment, or the identity of the investors.

So, until both of those points are clarified, there is very little to go on in terms of judging whether this would be a good thing for the club or not.

Some notes of caution though. There is no doubt that outgoing chairman Jim McMahon is a Motherwell man, and will – I am sure – be looking to leave a legacy at the club when he steps down in the summer.

However, I hope that his eagerness to show that the investment video that was his brainchild, and that he personally financed, has been a success doesn’t blind his judgment, and that he doesn’t end up driving this through to its conclusion even if it isn’t in the best long-term interests of the club.

There is also some confusion here when it comes to his mandate for doing so. The executive board of course has a duty to seek out investment if they feel that is what the club requires, but the fact that the ‘Well Society board haven’t been directly involved in this process suggests something of the tail wagging the dog.

The ‘Well Society, let’s not forget, are the owners of the club, and their statement on Thursday evening distancing themselves from this process suggests a great deal of scepticism from their side around the potential deal.

This is a democracy, of course, and just as Society members voted to retain an openness to investment, so too will they eventually be asked to ratify whatever this deal may be. This is where crystallising exactly what any investment will mean to the club and its future will be vital.

I suspect that a great many of the members who didn’t vote on that first point will engage more when there is something concrete to consider, and something that could potentially affect the future of the club, for better or worse.

There may be many who will see the promise of foreign investment and think that more money cannot possibly be a bad thing, but there is of course a litany of cautionary tales throughout the recent history of the Scottish game to ensure that caution is advised.

Investment could be a good thing, and the ‘Well Society board themselves have said they are encouraged by the noises coming from the potential investors that they would like to work with the Society rather than sideline it.

So, let’s move forward with an open mind, but with a healthy dollop of scepticism too. The devil will be in the detail.

 

 

[texanwellfan]

40 minutes ago, steelboy said:

Every Society member owns 1 voting share in the Society. 

Having effectively proportional representation makes no sense. It opens up the possibility that the Well Society members could vote 70% against the takeover but the overall shareholders vote goes in favour of it. 

In that scenario the Society assets are hugely reduced in value against the wishes of the membership. 

If you wanted a direct vote the shares were on sale dirt cheap not long ago. 

But we are talking about the club so shouldn’t we be going with the majority of the shareholders?? 

[steelboy]

18 minutes ago, texanwellfan said:

But we are talking about the club so shouldn’t we be going with the majority of the shareholders?? 

When we have a Society vote we are talking about the Society.

Look at it this way. If you take a guesstimate 8m valuation of the club then the Well Society currently has assets of £5.7 million just in terms of shares in the club, plus the loans to the club plus the cash in the bank. So somewhere in the region of assets of £7m.

If there is a share issue which hands the Americans a controlling interest (51%) the value of the Well Society shareholding - keeping the same valuation - drops to £1.6m.

So you are talking about the Well Society giving up assets worth £4 million. Obviously it should require a majority of Well Society members in favour to make that decision.

[Villageman]

1 hour ago, Kmcalpin said:

If we do indeed have 5 Directors on the Executive Board, who are the other two? It's a simple question and in no way breaching confidentialities. I'm aware that Andrew Wilson resigned a wee while ago. 

MFC registered OFFICERS @ Companies House are Keys as Secretary, Dickie, Feely and McMahon. 4 only.

[Ballso]

2 hours ago, steelboy said:

As far as I can tell the club legally has three directors. 

So there are two people on the Executive Board who aren't directors.

The five on the executive board were the current three (McMahon, Dickie and Feeley). Other two were CEO (burrows then Weir) and Andrew Wilson, who have now stepped away. 

i’m pretty sure the 5 Jay references was at the time of his posting.

[Kmcalpin]

14 minutes ago, Ballso said:

The five on the executive board were the current three (McMahon, Dickie and Feeley). Other two were CEO (burrows then Weir) and Andrew Wilson, who have now stepped away. 

i’m pretty sure the 5 Jay references was at the time of his posting.

I think that will be right, now that you explain it.

Back to the original point made by several of us. Given that the Society "reps" on the Executive Board outnumber other Directors ie Jim McMahon, I would hope that the Society is taking an active part in the negotiations with external partners  irrespective of how it is is dressed up. If not, it would appear that Jim McMahon is ploughing a lone furrow. Of course, the Society should be working up its own proposal in parallel. I hope in Mr MCGarry's words, that the tail isn't wagging our dog. 

[dennyc]

15 minutes ago, Kmcalpin said:

I think that will be right, now that you explain it.

Back to the original point made by several of us. Given that the Society "reps" on the Executive Board outnumber other Directors ie Jim McMahon, I would hope that the Society is taking an active part in the negotiations with external partners  irrespective of how it is is dressed up. If not, it would appear that Jim McMahon is ploughing a lone furrow. Of course, the Society should be working up its own proposal in parallel. I hope in Mr MCGarry's words, that the tail isn't wagging our dog. 

I think the tail has been wagging the dog ever since Hutchison insisted the established model be altered. Only the recent additions to the Society Board gave me hope that order might be restored. And I believe Jay and his colleagues are working to that end. But, sadly,  nothing I have read recently suggests to me that anything meaningful has changed.