New Investment Options

[Stuwell2]

17 minutes ago, steelboy said:

What are the other clubs spending compared to us?

Last week you posted on the thread that our wage budget was £1.5m a year which is miles out. If you don't know what the Motherwell budget is how do you know what the other clubs are spending?

You did point out my understanding of the players wage bill was wrong last week - which I accept but my figure was from memory of what I’d read possibly on here - best figure I’ve found since is £2.3m. 

As for what other clubs are spending if we ignore Celtic, Rangers, Hearts, Aberdeen and Hibs who all appear to be well above us, then I’m talking about the other premiership teams and Dundee Utd - apart from Livingston. 
In 2023 Kilmarnock and StJ appear to have wages of just above £2m, StM £1.7m, RC £1.5m and Livingston £1.3m. I couldn’t see the Dundee clubs on my quick search but given they have backers I’m guessing (forgive my guessing and correct me if you know them), Utd will be spending as much if not more than us and Dundee will be slightly behind us. Given that these are the teams we will be competing against next season and they all have backers who - choosing my words carefully here - potentially can add money out-with turnover to the budget which would make keeping our position sustainable. 

Hopefully that clears up what I thought was a simply statement.

If you know better since you appear to disagree with my statement please let me have your figures / forecast of spending over the next few years and explain why you disagree. 
 

[santheman]

22 hours ago, David said:

Interesting reading here for sure, and as much as it surprises me to be saying this, SteelBoy is on the money with a lot of what he's saying in my opinion.

In my experience, people with the financial clout to invest heavily in a football club aren't the type to accept a situation where they have to run their decisions and plans past a majority holding group made up, for the most part, of people who have nowhere near the same level of business experience as they do. 

If they're putting a considerable amount of money into any venture, they'll expect to make at least that and more back on the other side. That's simply how it is. They're not coming and giving up time and money for nothing. 

This suggests to me that they'll want majority control and will not be answerable to the Well Society. No serious investor would accept risking their capital in an industry that is difficult to profit from at the best of times without having majority control over how that entity is run and, more importantly, how their money is spent. The Well Society and any votes in the future would simply be seen as inconveniences and roadblocks to the real professionals doing their jobs. Which is maximising profit for the owner on their investment.

The most concerning thing for any football fan is that most owners who do not have an emotional attachment to the club they own often see it as just another business venture. 

Venture is the key word there. Defined as "an undertaking involving chance or risk" or "a speculative business enterprise," which in most cases means that the investor takes a chance, and has an amount of money they're willing to lose before declaring the venture a loss. At that point, they cut it loose and let it sink. 

It happens to companies every day. It's just that those companies ordinarily don't have fans. 

I'll be more than happy to be proven wrong on that count and see a unicorn in the form of someone with a ton of cash and no real emotional attachment to the club happy to throw cash into the pot and basically cede overall control and direction to the Well Society. I don't see it happening, though.

As has been mentioned already, fan ownership gives us many things, but the most important is that it gives us our club. 

If the Well Society loses majority control (if it happens), it will no longer be our club—it will be the new owners' club. At that point, we will be just customers. 

Most of the noise surrounding this issue seems to be paving the way for a change in majority ownership. Again, this is just my opinion based on what I've experienced in the past. 

Losing majority control of something like a football is a hard sell to fans. The only way to really accomplish that is to convince said fans via various PR means that there's not really any other option moving forward. Vague mentions of financial issues and a drip-style media campaign that gets fans used to the idea of giving up control. 

Again, I'm not saying this is what is happening, but it looks a lot like it from the outside. 

It'll be interesting to see how it plays out.

tbf I haven't really read anywhere except on here that there's a targeted attempt to give up fan ownership. That's not to say that won't happen as negotiations progress and vested interests come to the fore.

All the social media stuff I've read is along the same lines, ie keep an open mind as to what any offer might materialise.

I think there's a cats chance in hell of the WS members giving up control unless it's a truly extraordinary offer and even then I think its unlikely going by the members I know I've been speaking to, only one person out of 20 odd said they would be prepared to vote away our majority, the rest not under any circumstances.

Not a very big sample granted.

[Kmcalpin]

2 hours ago, Stuwell2 said:

As for what other clubs are spending if we ignore Celtic, Rangers, Hearts, Aberdeen and Hibs who all appear to be well above us, then I’m talking about the other premiership teams and Dundee Utd - apart from Livingston. 
In 2023 Kilmarnock and StJ appear to have wages of just above £2m, StM £1.7m, RC £1.5m and Livingston £1.3m. I couldn’t see the Dundee clubs on my quick search but given they have backers I’m guessing (forgive my guessing and correct me if you know them), Utd will be spending as much if not more than us and Dundee will be slightly behind us.

For the year ended May 2022 our total staff costs were 5.2m. Now that includes all staff of course, although the playing side will account for the majority of that. I'm sure I read somewhere that Killie's budget was about the same, as was St Johnstones (their average player salary was below ours but they have traditionallly carried huge squads). Ross County's would likely be above ours as would both Dundee clubs. SK mentioned last year that Dundee "blew us out of the water" when offering a player terms. United would likely have had a player budget about 25-30% above ours. 

Educated guesswork on my part.  

[David]

5 hours ago, Stuwell2 said:

As for David’s post above I don’t agree that we are being drip fed info via the media designed to get us to give up control. As for the WS will need to give up control narrative, again I disagree as the clubs not a loss making enterprise - our profit/losses over the last 7 years pretty much even out but future ground improvement’s are needed and will put us into loss more over the next 5-10 years no matter player sales - and although could survive without investment all be it probably in a poorer fashion. 

The question is how is he going to get a return on his investment? The options I can see are either through a % of player transfer fees, some sort of media involvement or a combination of both. These don’t require total control of the club but more a clear contract which states where and on what his investment can be spent, what % of transfer fees he gets (if this is even on his agenda) and what is expected from the club and society. 

How he gets a return on his investment is simply one part of the equation. I actually think the biggest bugbear for someone who's relatively self-made with a ton of cash will be having to run things past a group of unqualified individuals in the form of fan ownership.

I have absolutely no doubt that someone of that standing would happily accept an element of fan input and would be happy to listen to ideas, but they'll want to be the decision-makers. 

In my experience, investors and operators at that level don't really like taking orders from anyone. They call the shots. 

I'd be willing to put my life savings on Erik Barmack coming in being contingent on the Well Society ceding majority control. 

1 hour ago, santheman said:

tbf I haven't really read anywhere except on here that there's a targeted attempt to give up fan ownership.

Nah, the whole drive from the club of late has been with the angle of giving up fan control. From the marketing video to the lengthy interviews we've seen on YouTube to the question asked via the email poll.

Everything has been geared towards convincing fans that giving up majority control is the way forward. Which is fine, if that's what the majority eventually vote for then I hope it goes well.

I won't be putting another penny into the Well Society once that happens, though. At that point, I'm a customer. The guy who owns the club is the one who finances it. He doesn't need my monthly contribution.

[steelboy]

4 hours ago, David said:

 

 

 

Everything has been geared towards convincing fans that giving up majority control is the way forward. Which is fine, if that's what the majority eventually vote for then I hope it goes well.

I don't think it is fine.  

McMahon is financing and producing videos promoting giving up fan ownership but is somehow still allowed to lead negotiations on behalf of the shareholders. 

It's a clear conflict of interest. 

[weeyin]

24 minutes ago, wellgirl said:

Asking for outside investment isn't the same thing as giving up fan ownership - the fans get making the decision as to what happens with the well society 

That's true. However, in the last fans' vote there was a significant majority who said they would "consider voting in support of any investment proposal which would see the Well Society losing its majority shareholding."

Of course, they may change their minds when the details of the new proposal are revealed, but it doesn't fill me with confidence.

[Great Balls of Shire]

I'm in the well society and it's all well and good but we are going to be standing still , at best,probably going backwards if we don't get some form of investment ...it's for the fans to decide at some point...if they are aware of the pros and cons , 

[David]

4 hours ago, wellgirl said:

But fans have the option to say no 

Of course they do, but as I said, there's quite clearly (in my view) a drive to funnel the fans down the avenue of us desperately needing outside investment. It's not an overt drive, but it's definitely there. 

And I personally think it's succeeding. I believe if Erik Bermack, positioned as the "Netflix guy" with "Hollywood connections" as we've seen in the media so far, is officially positioned as wanting to come in and take us to " the next level" but only if the Society drops to less than 50% control that the fans will vote in favour. 

4 hours ago, wellgirl said:

Asking for outside investment isn't the same thing as giving up fan ownership - the fans get making the decision as to what happens with the well society 

Again, as I said, asking for outside investment of a level that will make any real difference will most likely come with giving up fan ownership, for the reasons I mention. Very few successful businessmen are going to come in, risk their own money, give up their own time and expertise, yet remain answerable to a fan group. 

It's incredibly unlikely to happen. These types of guys are used to calling the shots. And this will be no different in my opinion.

[wunderwell]

On 4/13/2024 at 12:27 PM, steelboy said:

I disagree. 

I think our turnover, playing budget, stadium investment and net profit during fan ownership have been impressive. 

We've blown all the money we made since the accounts posted 2021. 

That's the boards fault though not the society's

[David]

3 hours ago, wellgirl said:

How I feel about the need for outside investment came long before anything to do with Bermack. 

And to be fair to him he has said nothing publicly about having to reduce the share to less than 51 per cent. That may well be his view. But he hasn't stated that. Other people have. Like Gavin McCafferty.

I don't care about Netflix either or Hollywood connections. I don't even have a TV and I don't watch Netflix. I just wont write off someone wanting to invest in my club at this point 

Yeah, and that's all well & good. And you're entitled to that opinion, but the truth is that the majority of people do have televisions, and have had Netflix at some point in their lives. So it will have an effect. It adds credibility in some ways, doesn't it? That's why the media have mentioned it a few times. It's only natural that people hear about an investor and want to know what he's done. The fact he's not been with Netflix for quite some time doesn't really matter.

And I wouldn't expect him to say anything of real substance about the investment publicly, not if he's a savvy operator. Only an absolute fool would come in and say "yeah, I won't be investing unless I get total control." And he doesn't strike me as a fool. The reason people like McCafferty are saying it is because as journalists they'll know how this kind of thing usually works.

As I've said a few times, if he comes in, puts in a fair chunk of cash and does so without wanting to have majority ownership and thus final say over what happens to the money he invests then I'll be pleasantly surprised. He'll be a unicorn of sorts in the investment world. 

Because investors only really come in for a few reasons. The first is a financial return. I could be wrong, but I don't think that's the reasoning behind this venture. There's typically not a lot of ROI in Scottish football. 

The other is because it's a useful asset to have as part of a portfolio of companies, which is where the control factor comes in. It's not quite as useful if the final say on important matters rests with a fan group. Such a framework is usually seen as a roadblock more than anything else. I wouldn't be surprised if we eventually find out that the Society retaining majority ownership is a deal-breaker. 

Again, we'll see how it plays out. It should be interesting. All I know is, if someone is wealthy enough to invest in the club and we hand them majority control, they won't need my regular monthly subs. I pay that amount because we're a fan-owned club and the fans are majority owners. 

As @steelboy has said, I fully expect that we'll be told that having a 30% holding or whatever alongside his investment is the best of both worlds. And it might very well be. It could all work out fantastically. 

I guess it depends on if we want to take the risk that it might not.

[dennyc]

If investment is dependent upon Barmack securing a majority share holding then that will require to be confirmed when details of any offer is made public. So why waste time and money hiding that stipulation from the outset. I think any such demand would likely be a deal breaker as far as Society members are concerned. And without Society members approval no bid can succeed. There is no way round that. Steelboy’s Conspiracy theories aside. 

But nothing Barmack has said so far suggests that he is seeking a majority holding. All such talk has come from others, who do have the Club’s interests at heart but also have a passionate wish to retain fan control. Fair enough. But there is no evidence to support their view other than ‘investors are always looking for a financial return’ and ‘it is always the case that’. If there is any factual evidence that Barmack wants overall control, please share it so we can all be ‘in the know’. 

Given the challenge and obstacles that securing ownership of a fan owned football club present, why on earth would any experienced businessman go down that route as opposed to seeking control over the likes of Ross County or St Johnstone, whose owners are reportedly looking to step back? It makes no sense. Perhaps we should just take his comments at face value until we know otherwise.

[Spiderpig]

43 minutes ago, dennyc said:

II think any such demand would likely be a deal breaker as far as Society members are concerned. And without Society members approval no bid can succeed. There is no way round that. Steelboy’s Conspiracy theories aside. 
 

The WS members opinions from what's been said so far don't seem to have been canvassed or taken into account by any communication or votes etc for any decision taken by the club re finances, infrastructure improvement etc since the WS was formed, what makes you think that approach will change now?

 

[Spiderpig]

12 minutes ago, wellgirl said:

Because it was made clear by the well society that members would have the final say as to whether the society keep majority control or not. 

As the majority shareholders the WS members having the final say on any major decision taken by the club over the years should have been normal practice. But from what the members have said including yourself the consultation / communication etc has been zero, so as I said is there any confidence that this approach will change as it needs to?

[bobbybingo]

5 minutes ago, Spiderpig said:

As the majority shareholders the WS members having the final say on any major decision taken by the club over the years should have been normal practice. But from what the members have said including yourself the consultation / communication etc has been zero, so as I said is there any confidence that this approach will change as it needs to?

Can someone buy majority control without a vote from WS members?

[bobbybingo]

2 minutes ago, wellgirl said:

I think no is the answer to that 

That was my understanding too.

All kinds of arguments and complaints can be made about the Society's lack of communication or lack of say in big decisions over the years, and folk can claim that certain people are set on engineering a certain outcome, but if the final decision has to be taken according to the result of a membrship vote, legally, then there's no getting away from that. That some folk won't like that decision is inevitable, whichever way it goes.

[Pepper]

If those in charge of the Club are so in favour of retaining fan ownership why did they effectively cut the Society out by seeking direct outside investment that would likely require the Society to relinquish majority control?

The suggestion that any investor is not going to want full control is laughable. Why have the Society vote othereise? Speculation or not do people really need to have it spelt out to see what's in the pipeline? 

IMO the Chief Exec and Chairman should have shown the Society as majority shareholder more respect and at least challenged those involved to attract additional investment and up funds. The freshening up of the Society board gives me a lot of confidence that they are more than capable of achieving something very positive. The timing of the whole thing is awful and has almost set the Society up to fail. 

I think it is lost on a awful lot of people just how significant majority fan ownership is and how it was a once in lifetime of the Club occurrence. Giving that up for anything short of a truly spectacular level of investment is crazy.

[Pepper]

1 minute ago, wellgirl said:

The society are supposed to be putting together a funding proposal as far as I'm aware. 

Yeah, which makes the decision to effectively pit the Society's proposal against an outside investor's proposal even more bizarre. 

[bobbybingo]

2 minutes ago, Pepper said:

If those in charge of the Club are so in favour of retaining fan ownership why did they effectively cut the Society out by seeking direct outside investment that would likely require the Society to relinquish majority control?

The suggestion that any investor is not going to want full control is laughable. Why have the Society vote othereise? Speculation or not do people really need to have it spelt out to see what's in the pipeline? 

IMO the Chief Exec and Chairman should have shown the Society as majority shareholder more respect and at least challenged those involved to attract additional investment and up funds. The freshening up of the Society board gives me a lot of confidence that they are more than capable of achieving something very positive. The timing of the whole thing is awful and has almost set the Society up to fail. 

I think it is lost on a awful lot of people just how significant majority fan ownership is and how it was a once in lifetime of the Club occurrence. Giving that up for anything short of a truly spectacular level of investment is crazy.

If it's left to the Well Society to find additional investment, where would that come from, given the idea any investor is not going to want full control is laughable, in your opinion? Or do you want them to find thousands of new members willing to donate money on a regular basis?

[Pepper]

1 minute ago, bobbybingo said:

If it's left to the Well Society to find additional investment, where would that come from, given the idea any investor is not going to want full control is laughable, in your opinion? Or do you want them to find thousands of new members willing to donate money on a regular basis?

The point I'm making is that the Society, at the very least, should have been given the chance to raise that investment whatever form it may take, without being undermined by those running the Club. 

[bobbybingo]

7 minutes ago, Pepper said:

The point I'm making is that the Society, at the very least, should have been given the chance to raise that investment whatever form it may take, without being undermined by those running the Club. 

It sounds very like yourself, and some others on here, have taken the stance that any outside investor should be hunted, even before any discussions as to their intent, because their intent will inevitably be bad. 

You might well be right, but it can't be that simple. The Well Society is a large group of individuals, so not everyone will share that view, obviously. And the glaring questions remain - whre will the Society drum up substantial no strings attached investment, and why wait till now to start doing something about it?

[Kmcalpin]

42 minutes ago, Pepper said:

If those in charge of the Club are so in favour of retaining fan ownership why did they effectively cut the Society out by seeking direct outside investment that would likely require the Society to relinquish majority control?

We'll find out details in  due course, so need to get our knickers in a twist just yet. 

With regard to your point, we should all remember that, as things stand, Society reps on the board outnumber other directors by 2:1. However thats a good question. The 2 Society members on the Board, Douglas Dickie and Tom Feely are effectively wearing 2 hats. By default, the Society wasn't cut out. 

[joewarkfanclub]

This debate really is just going round in circles.

I guess thats what happens when we have no game to discuss and a vacuum of information.

FWIW, although my preference is to remain majority fan owned and I am sceptical about this investor for now, I'm more than happy to wait and see the detail before making a final decision.

There are one or two things worth repeating though.

Although Ive been a member of the Well Society since its inception, there have been many things around it I have not been satisfied by.

It has always seemed to me that the Executive Board have tried to keep the Society at arms length and only really consulted it when it needed to. Happy to have the safety net it provided, but really viewed it as an inconvenience. Now that might not be entirely fair, but thats how it has felt, to me at least.

I sense there has been a change since the last WS Board elections and that some power and control has been wrestled back, and Im keen to see what direction that takes now that there might finally be a chance to make the fan ownership model mean something more tangible.

Obviously the timing of this bid moves the timeframe forward for the Society and they will need to act quickly to get their ideas across and show that they can work.

Re the bid, I dont know where the figures came from or whether they are correct, but for argument sake, a bid of £1.5m over a specified period isnt the kind of offer thats going to get me excited, and its certainly not the kind of figure that should see us selling controlling interest of the club for. Our club is worth considerably more than £3m regardless of how shit or desperate anyone thinks we are at the monent.

Its not a figure we can turn our noses up at though, and if there was a way of getting that kind of investment into the club whilst keeping majority shareholding and  the promise that we will still keep a majority share of player trading, then it might be worth looking at.

At the end of the day, we need a deal which leaves us with more money coming into the club, not less. So whilst £1.5m now seems appealing, if  the amount we bring in for player trading goes down, there doesnt seem much point.

Its up to Mr Barmack to demonstrate he has the business skills and knowledge to grow the business and allow him to do that whilst making a profit on his own investment. 

In the meantime, I dont think a figure of £1.5m over 3 or even 5 years is revenue that is necessarily outwith the reach of the Society. But they dont have a lot of time to show it can be done and would be a viable alternative.

 

[joewarkfanclub]

PS. I agree with David, in that if this deal goes through (and I might yet vote for it) and the Society no longer has majority shareholding, I will no longer feel the need to continue my subscription.

In my opinion, if you give away majority shareholding the purpose of the Society no longer exists and you may as well wind it up.

Not sure if the Board or investors hace considered that.......

[weeyin]

8 minutes ago, wellgirl said:

So fans can't have less than 50 per cent share of a club? If fan ownership was working Motherwell wouldn't be looking for outside investment. 

They can, but I'm not sure how that fits in with the Society's remit to be a fan-owned club, or if the Society can even legally exist in its current form if it becomes impossible for it to ever be the majority stakeholder.

 

[steelboy]

@dennyc

St Johnstone have already been sold in what looks to be a deal to carve up their valuable land between an American and the Browns. 

Ross County are a village team and are only financially viable because they are a subsidiary of MacGregor's larger business.