The story is continued on ...

... the West Ham Blog with Plan #2 site.

West Ham United supporters

Are you:

• tired of the constant financial uncertainty and speculation surrounding the club;
• willing to do something about it;
• prepared to spend time on an interesting, challenging and worthwhile task;
• able to offer expertise in at least one of the following five fields: administration, finance, football, information technology, law;
• willing to join a working party to prepare a detailed plan from the outline published on 4 September 2009 on this site?

If you can answer yes to at least four of the above questions, then please contact me, in the first instance by email, giving your contact details and any relevant interest and expertise.

Thank you.

Can fans buy West Ham?

Football Club Project Version 3.2 (4 September 2009)

Note that this is not an offer for sale and is not licensed by the Financial Services Authority (FSA).

Aim
To change an English football club (West Ham United plc) into a members' club based on the style of FC Barcelona.

Many fans, perhaps a majority, would support this move in principle but are doubtful that it could ever be achieved. Others take a simpler view and just wish for football success. They see nothing wrong with, for example, the paths taken by Chelsea and Manchester City.

For background information with additional references, please see earlier posts on this site.

Note
After this project was started in June 2009, my attention was drawn to a similar project promoted by ShareLiverpoolFC (SLFC) and Spirit of Shankly (SoS). Their ingenious revised plan was published on 24 July 2009 and seeks to raise a total of £350 million to cover Liverpool FC's estimated total debt. This sum is considerably greater than the expected equivalent for West Ham but in the continued official absence of the club's delayed accounts, it is impossible to be certain.

The Corporate Structure

The creation of new company A which will aim to raise the money to purchase, at least, a controlling interest in the existing football club (company B).

Company A (the holding company) will be a 'one member, one vote' company, with an 'asset lock' to prevent any takeover.

Company B (the football club) will still be a Public Limited Company which will satisfy the requirements of the football authorities.

The members of Company A will thus, through their voting power, be in effective control of Company B.

Company C (the final single corporate structure) will be based on the style of FC Barcelona, insofar as English law permits.

Please note that each of the following stages will need further detailed planning and consideration by the working party formed in stage 1.

Stages in the formation of Company A

1. Form a working party of ten to twenty fans who are prepared to offer their expertise and time to assist in the formation of the company.

2. Ensure that the working party can adequately cover the following five areas: administration, finance, football, information technology and law.

3. Consider the following possible types of corporate structure and decide which one is the most appropriate for company A.

(a) Industrial and Provident Society (IPS)

(b) Community Interest Company (CIC)
private company limited by shares

(c) Community Interest Company (CIC)
private company limited by guarantee

(d) Private Limited Company

4. Ensure that the company is licensed by the Financial Services Authority (FSA) so that it is allowed to invite investors to subscribe to the company.

5, Complete the legal formalities.

Stages in the purchase of Company B

6. Prepare a prospectus for the sale of shares in company A. This should include the following details:

(a) How the purchase of company B is to be financed.

(b) How the interests of investors will be taken into account in the management of company B.

(c) How company B will be managed.

(d) How investors will be involved in the management of company B.

(e) Consider if the offer for sale could/should be underwritten.

7. If the offer for the sale of shares in company A is successful, proceed with the sale of company B to company A. If the offer for sale is not successful, consider the question of acquiring a minority interest in company B.

The final stage: converting companies A and B to a single company C which follows the style of FC Barcelona

8. This would not have a high priority. The main concern is to ensure that the previous stages have not ruled it out or made it unnecessarily difficult. Note particularly the rules which prohibit changing one type of company to another.

9. To recognise the importance of safeguarding the interests of all who invested during the earlier stages.

What can you do now?

If you feel you would like to help, please go to West Ham United supporters on this site.

If you have any any questions or comments, please send me an email.

Thank you.

A message to all West Ham football supporters

Prime Minister Harold Macmillan is supposed to have said, when asked what is most likely to blow a government off course, "Events, dear boy, events".

The publication in The Guardian (3 September 2009) of unofficial details of the long-awaited West Ham accounts is just such an event, although affecting only West Ham supporters, not the government, yet!

The response should be, in Lance-Corporal Jones' words, "Don't panic, don't panic!".

There is a plan, further details of which will be published on this site shortly. However, the existing administrative arrangement would not be able to cope with thousands of enquiries.

Please be patient and let the plant grow naturally at its own pace. Don't stamp it out of existence!

Finding the resources

Human resources come before financial resources so the money can be counted as it floods in!

But seriously, some thought should be given to the financial feasibility of the project before acquiring material resources which may never be needed.

"So how much are we talking about?"

"How does £100 million sound?"

"Well it sounds like a lot of money."

"Until that is you divide by 50 million. That's £2 each."

"But not everyone in the country will wish to be involved."

"Well, let's take a different figure. The size of the crowd at Upton Park for example. Say 35,000."

"That's better. But it's still about £3k each."

"Maybe we could get a few large donations or possibly a lot of small donations."

"Yes. Maybe."

"Or a loan or a mortgage? There are all sorts of possibilities. Let's see what happens. Acorns and oaks. The main thing is to get started and not miss the chance again through lack of a plan.

Now let's consider human resources. The armed forces like counting in threes; two to do the business and one in reserve. And as it's an odd number, you can't get a tied vote from two plans.

So how about three from each of the following areas: finance, the law, administration. An interest in football an advantage. Call it a committee or a working-party. Add a chairman, a secretary and a treasurer and we're in business. Each sub-group reports its findings to the whole committee. And we take it from there."

"Now we need some money."
"But first we must recruit our volunteer experts."

Why target West Ham?

This is going to be positive! I leave it to others to produce a different list if they wish.

The opportunity is there
At some time in the next two years, the current owners will be looking for a buyer.

The opportunity was there in 2003 and it was missed, mainly because the organisation was not in place. This time let us make sure it is!

The reputation of the club
For at least the last 60 years, West Ham has enjoyed and deserved a reputation for

• playing attractive football
• encouraging young players to succeed at the highest level
• having supporters who appreciate the game

These are valuable assets which should be preserved for succeeding generations.

The money can be found
Yes, even in these difficult economic times. This is the time for wise investments and long-term planning.

From a rough comparison between Greater London and Greater Barcelona, we find that there are 35 inhabitants per top-division seat in London compared with the corresponding figure in Barcelona of 20. This suggest that there is considerable scope for increasing the number of top-division seats in London to satisfy potential demand. The present high percentage occupancy of seats would seem to support this view. Certainly most Premiership matches at Upton Park are sell-outs.

Next time
Finding the resources.

Corporate structures for football clubs

There can't be much doubt about the football club which provides the best model for others to aspire to - FC Barcelona.

Examine its statutes. They are available on its website, not only in Spanish and Catalan versions but now also in English. You will see what makes this club so very special. In addition to its football record, consider the range of other sports offered, its democratic structure and its truly noble aims. They make it a shining example to the rest of the world. It is no surprise that it has an inspiring stadium and a team to match.

Also no surprise that, at the latest count, it had 173,071 members!

So what can England offer at the moment? What should we be looking for?

I would suggest that there are two essentials.

1. One share per member and hence one vote per member. This would keep control of the club in the hands of its supporters.
2. A sound policy by which the financial resources of the club are assured and can increase as the number of members increases.

The simplest example which might match these requirements is a Supporters Trust. This a democratic, not-for-profit organisation of supporters. These structures were established following a UK government initiative in 2000. In spite of the name, these bodies are not charities.

Supporters Direct helps fans to form trusts (over 140 since 2000) and pays for the legal costs of formation. The preferred type of organisation is an Industrial and Provident Society (IPS) which has limited liability of £1 per member. An IPS can own shares and property but, at the moment, the Football League does not permit its clubs to be IPSs.

Currently, Supporters Trusts have control at four Football League clubs and eight non-league clubs in England.

Another possible model is the Community Interest Company (CIC). Introduced in July 2005, there are now nearly 3,000 CICs but few are football clubs. A CIC is limited by shares or by guarantee or by a plc. It operates for the benefit of the community, rather than rewarding owners or investors. It also has a statutory "asset lock" which ensures that any transfer of assets must satisfy certain requirements. Various conversions are possible between a CIC and a variety of other types of bodies.

Could a football club qualify as a CIC? Encouragement of sport is included as an example of something which could benefit the community. So, yes, Canterbury City FC (which is a CIC) and FC Barcelona (which isn't) qualify, at least in this respect. But West Ham? The only answer would be to try it and see.

If these two models fail to gain support, then it would be back to a Limited Company and devising an appropriate "Memorandum and Articles of Association".

Further reading
Types of Company
Community Interest Company (Information Pack)
Community Interest Company (Information and Guidance Notes)
Community Interest Company (Forms for Legal Changes)
Objections to IPSs
Independent European Sport Review 2006

Next time
Why target West Ham?

A little bit of social history

To understand today's problems, we have to go back to the beginning, in the case of organised football to the Victorians. The Football Association was formed in 1863 and the Football League in 1888. The FA Challenge Cup was established in 1871.

The earliest football teams were based on schools, universities and villages. However following the increase in urbanisation, it was soon found that the most successful clubs were located in the areas which could provide the greatest human and financial resources, that is the cities. Businessmen saw a financial opportunity in forming an association with the local team and this symbiosis between directors and fans continued until recent times. The directors or their descendants put in their money (for publicity, honours, love of football, standing in the community, etc) and the fans paid at the turnstiles (for entertainment, comradeship, love your team, hate the opposition, etc).

And then ....

• Some directors were unable/unwilling to continue pouring money down the football drain.
• Shareholders who had inherited their bits of paper found out that the shares could actually be sold for real money.
• Government decided that football had suffered one disaster too many and that the grounds must be changed.
• Mr Murdoch saw an opportunity to make money by showing live matches on television.
• The players (and/or their agents) decided yes, that's fine, as long as we can have most of the money.
• Wealthy businessmen bought clubs with the aim of making themslves even wealthier.
• In the top division, only a few clubs were able to compete for the prizes. For the rest, the struggle was to avoid relegation.

Le Chatelier (1850-1936) had a principle. This says (very roughly) that if there is a happy state of affairs and then someone comes along and changes the conditions under which the state exists, the state will adjust so that happiness is restored.
But then he was a 'mad' chemist!

Next time
Examining possible corporate structures for football clubs.

Introduction

This blog has a simple aim, that of promoting the return of football to its supporters. Doubtless thousands wish it could happen but are sceptical that it ever will. Quite a lot give the impression that they actually enjoy belonging to the oppressed.

No, I don't think I am a complete nutter. I am encouraged by the example of FC Barcelona and by a belief that even the most intractable of problems can be solved by breaking it down into its constituent parts and taking it stage by stage. In fact, the situation in this country is not uniformly depressing. But let's leave that for later.

At this point, you might like to learn a little of my background. The first professional football match I attended was the West Ham (6) v Arsenal (0) FA cup-tie (1st leg) on 5 January 1946. Although Arsenal won the second leg 1-0, West Ham went on to the next round in which they lost 1-2 to Chelsea.

At school, I can particularly remember the influence of a new PE teacher who, I later learned, had some professional experience with Manchester City. Before the first match of the season, he gave each team-member a card with a slogan for them to remember and apply. Mine was HALF BACKS NEVER RELAX! Even in the modern game, the equivalent still applies.

The same teacher, when listening once to the excuses of the sick, couldn't resist the crack "Got catarrh, boy? Then step inside the gym and give us a toon!"

Later at university, the difference between the aspiring professional footballer and the rest of us was made clear to me when I had the job of marking George Scanlan in an inter-college game. Never got near him!

George, who played for Pegasus from 1954-60, later found fame when, making use of his fluent French and Russian (and of course English), he was involved with the books "Cantona: My Story" and "Kanchelskis".

Since moving to the London area in 1978, I have watched West Hame home and away on numerous occasions. In 1992, I bought two B Hammers Bonds in the West Upper Stand and, in 2003 at the time of Whistle v T. Brown, 100 shares in West Hame United plc. Sadly, in my opinion, this movement towards supporter control of the club could not be maintained, leading to the problems and uncertainties afflicting West Ham and many other clubs today.

I have watched most of the first team home games for the last 17 years as well as the Youth Team on many occasions. Fortunately, the Academy continues to produce quality players, even if the Club has not been able to retain them for long once they make the senior team.

Thank you for reading this far. If you would like to express your opinions, they would be appreciated. Finally, and unfortunately necessary, if you are one of the sad few who are unable or unwilling to make your points politely, please go and inflict them on someone else.

Next time

A little bit of social history leading to today's problems.