Sunday, March 11, 2007

Your Trust Questions Answered

At our meeting last week we answered a few questions and since then we received a few more from various messageboards. The full list of questions and our answers are detailed below, if we have missed any out or you have any additionaal ones, please send them to us at and we will do a follow up.

Q. Is it true that you've got financial backing that allows you to potentially purchase 10 - 15% of City's shares?

A. We have been talking to many shareholders and non-shareholders who are willing to back the Supporters’ Trust and our initial talks suggest that we have the backing to potentially purchase/own 10 – 15% of City shares, if and when they are available to purchase.

Q. If so how much would that actually cost?

A. The price obviously depends on the market at the time of purchasing but we have had an offer of financial backing which is a seven figure sum and several shareholders have indicated their willingness to back the trust with their existing shares, which doesn’t involve any monetary amount.

Q. Where have you got the backing from; whose money is it?

A. We have been asked to keep the identity of these people confidential and we must respect that request. However, they are City fans and we would stress that the Trust is not a front or “stalking horse”.

Q. Is the club aware that you have this level of financial backing?

A. As yet we have not met with the club but we are aware that they are following our developments closely and should therefore be aware of this fact.

Q. To what end are you considering buying shares?

A. One of the aims of the Trust is to provide the fans with a voice and a stake in their club, via ownership of a percentage of the shares. The Trust’s ultimate aim is to gain representation for the fans on the board. However, this would have to be agreed by our membership, who would have the final say.

Q. Is it true that there are approximately 33% of City shares with no board level representation?

A. The figure is actually around 50% as Francis Lee & Sky together have 17% and they do not appear to be represented on the board. The rest of the unrepresented shares (the 33%) are owned by shareholders with an individual stake of less than 3%. These include thousands of ordinary fans who hold the shares, not for financial gain, but to own a small piece of the club.

Q. Do you intend to represent them? Have you actually spoken to these people/got their backing?

A. We have not spoken to ALL shareholders as yet, but we have spoken to some that do not have any board representation. We intend contacting as many as we can in the near future. We can only represent those that want us to do so.

Q. Is Chris Bird and/or Bernstein involved in any greater capacity other than providing the media with ambiguous quotes?

A. Bird and Bernstein are both shareholders in their own right and have supported the Trust vocally, but are just two of the many shareholders we speak to regularly. Neither have any informal or formal role in the Trust.

Q. Is there a concern that a Supporters Trust that owns (potentially) 15% of the club and represents a further 33% (so virtually half the club in total) would be seen as a block to any potential takeover bid/investment?

A. It’s unlikely we would ever get to that overall level. A good figure would be around the 17-20% mark as that should guarantee a Director on the Board (for example Mark Boler currently sits on the Board with around 18.75%) and a holding of this size could block any potential investor from achieving the 90% level of ownership that would enable them to take the company under total control, like the Glazer family have done at United.

Clearly the club needs investment at the moment but we also need the right investment to move in the right direction. If someone wanted to invest in City but didn't want any involvement from the fans, then you might have to question their motives but if someone wanted to invest and was comfortable with the fans owning a slice of the club then obviously we would welcome this person with open arms as long as the investment was sustainable and didn't saddle the club with more debt.

There is another angle to this however. Most deals have a condition that they will only go ahead once they are guaranteed to have 75% of the shares. With the fragmented nature of the Manchester City share ownership, although an investor could get 50% of the shares quite easily, they might struggle to achieve the 75% level. A group that could influence a significant block of shares would actually be very useful to a potential investor.

Again, this is an issue that would ultimately be decided by our membership as it’s a one-member, one-vote organisation where no one member has a greater say than any other member.

Q. Is it only possible for a club to have one Supporters Trust? If not then what would happen if a second was created? Would this dilute your 'power'?

A. Across the football leagues and Premiership there are currently no examples of a club having two Supporters Trusts.

Q. Following on from Colin Savage’s publishing of some financial information via GMR it is rumoured that GMR were put under pressure by the club to never have him (or anyone Trust related) on again. Is this true?

A. BBC Radio Manchester, the Manchester Evening News and other media outlets all have strong relationships with the Club. We understand that these are important relationships, and appreciate the airtime and column inches we have received to date.

In fact BBC Radio Manchester have had both Colin Howell and Colin Savage on their station in recent weeks and the MEN has reported several articles on the trust and we hope to build on the relationship we have with all media outlets.

Q. Is it also true that there was an attempt to ban Ian Cheeseman from the AGM following on from said interview?

A. We are not privy to any discussions that the club may have had with Ian nor can we comment on the arrangements for the AGM. However Ian Cheeseman is a shareholder in his own right and is therefore free to attend the AGM and in fact did so.

Q. Another rumour is that the club has undertaken background checks on all people involved in the Trust, true or conjecture?

A. We understand the Club has been looking closely at those involved with the Trust. While we would have preferred to have direct relations with the club, we welcome any discussion or focus on those involved with the Trust. Any investigation they might do will simply reveal that we are all dyed-in-the-wool Manchester City fans with no ulterior motive other than our passion for our club.

Q. Why doesn't the club like the Trust? What are their concerns/fears?

A. The club has made a commitment to meet with us once we are formally constituted. Again, whilst we would have liked to have had a dialogue as we developed the Trust, we look forward to our first formal meeting in the weeks following March 4th.

Also, we understand that Alistair Mackintosh has an excellent relationship with Phil French, the Chief Executive of Supporters’ Direct.

Q. Will you try and turn us into Barcelona where we vote for the directors and all have a say?

A. Who wouldn’t want to be Barcelona! Seriously, they are a model example of a supporter run club but we're not aiming for a 100% owned fans club but one where we can have a significant shareholding in the fans’ name that gives the Trust the right to vote in a Director to represent their interests and give them a voice at Boardroom level.

Q. If the trust was successful who would represent us on the board?

A. It is up to the membership to vote on who they want to represent them and although we would want someone with the rights skills to put our case at Boardroom level, the final decision would be put to a democratic vote.

Anyone in that position would be there by right, not just as a token presence and we feel it is important that whoever it is has the ability to contribute something concrete at that level.

Q. Would the shares have to be pooled so that the people with them would 'lose’ them to the pool and therefore the rights to attend the AGM?

A. At the moment someone with say £100 worth of shares doesn't have any real say in how the club is run but if the Trust brought together 1,000 shareholders with £100 worth of shares then they have a greater say as a group. People don't have to gift their shares to the trust; they can keep the ownership of them and just proxy the vote to the Trust.

There may also be other ways of achieving the pooling but we will not force anyone to hand over the ownership of their shares unless they genuinely want to do that. Even if you proxy your vote to the Trust, you are still the legal owner of the shares and still have the right to attend the AGM.

Q. Would the trust consider selling any shareholding they build up to facilitate a takeover by someone that was insistent on buying up 100% of the club? Or alternatively, would they use their shares to effectively block such a takeover?

A. As mentioned previously, this would have to be put to the membership to vote.

Q. Would a takeover have a detrimental effect?

A. We would hope for the right sort of investment package, one without massive debts attached but until there is a firm proposal we cannot say.

There is speculation in some quarters that there may be a creeping takeover of Premiership clubs by US sports franchise owners, in order to introduce a similar structure to the one that exists in the NFL, for example. Opinion is sharply divided on whether this would be a good thing or not.

Q. What about the cost involved of becoming a founder member?

A. The average cost of membership throughout the country is around £10 per adult, which seems reasonable. There would also be discounts for Senior Citizens and juniors and possibly a Family package. However, this would all have to be decided upon formation and voted on by our membership.

Q. What about the existing supporters groups?

A. We have tried to make it clear that our aims are totally different from, but do not conflict with, the two main existing supporters’ groups, the OSC & the CSA.

A number of us are members of our local branches and three are very heavily involved with the OSC & CSA via those branches. However, as individuals they also see that the Supporters’ Trust offers something that complements the work that the existing groups do.

The Supporters Groups do a great job on the social side and of course organise tickets and travel for matches but we would like to deal with the club at a different level and would not tread on any areas the existing Supporters Groups deal with.

There may areas where there is some overlap on occasions and we may agree to co-operate or agree to differ. That will be subject to the wishes of our respective members. However we are all City fans and we would certainly resist any attempt to freeze out or favour any one group over another. All the groups are different in character but all offer us a way to get more involved with our club and we encourage fans to do that, in whatever way they feel comfortable.

Q. Can the Trust function without the co-operation of the club?

A. We would hope to co-operate with the club but our existence is totally independent. Those of you who were at the open meeting will have heard Jon Keen, the Reading Trust board member, say that the club were initially sceptical. However, even though they can’t gain influence via shareholdings, they now attend the monthly senior management meeting.

We have heard a similar story from the Arsenal trust. These clubs (and others) have realised that their supporters’ trusts are credible, constructive and serious groups. As we intend to be.


At 8:37 pm, Anonymous Anonymous said...

Pissing in the wind????

At 10:04 pm, Anonymous Dave - Manchester Blue. said...

anonymous, a very well thought out comment well done.

From little acorns....

Thanks for the update, it's good to see some people make a positive contribution towards making a difference.

At 11:01 pm, Anonymous Anonymous said...

Pissing in the wind???

Not the most helpful opinion on a group who seem determined to have an influence and a well defined strategy to implement this. I for one would quite happily proxy my votes. If those 33% of shareholders (discounting Lee) share that view then why would it not work?

Wardle & Makin do not have this many shares.

I think any new addition to the board with some semblance of business skill will help the club and the aims of the trust are welcome.


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