Ownership of things matter. Good ownership gives people a say in things they care about, a sense of motivation and a stake in its success – much like being part of a sports team.
However, poor ownership and governance of clubs can have catastrophic effects. Over the years, many professional sport clubs have seen the impact reckless ownership can have on clubs, with numerous clubs falling into administration and sometimes liquidation.
This was the case for Gretna who after a metaphoric rise through the leagues and with unsustainable investment into the club, were ultimately unable to meet their liabilities and were liquidated. Watching from less than 10 miles away were Annan Athletic who profited from Gretna’s share in the SFL (as it was at the time) but they gained something else in Gretna’s demise, an appreciation for stable and sustainable ownership, something often cited by the club’s committee members.
Often self-described as the best pub team in Scotland on account of how the team have evolved through a social club, we’ve been in discussion with Annan Athletic for a number of years on how they can best install a governance structure fitting of the clubs’ vast and significant work within the community and in keeping with their bold ambitions for the future.
This led to our drafting and submitting a new constitution to the Financial Conduct Authority and the club incorporating as a Community Benefit Society (CBS), a type of sports cooperative owned by a membership open to all and with enshrined community benefit.
Speaking to the SD Scotland podcast in May, Phillip Jones of Annan Athletic said the following on why the club took the decision to become a CBS.
“We’ve worked very closely with Supporters Direct and we’ve looked at other clubs and the models available. We’ve determined the CBS model is best for us because 1) the liability is limited to £1 for members and 2) to protect our assets and 3) (and more importantly) is to give everyone a vote on decisions and that confirms our ethos of the society – it’s a true democracy and when this consultation is finished, we’ll be 100% fan owned”
“The benefit of the CBS model is that every member of the society has a real investment in the club and it breeds an awareness of the club and a willingness for it to succeed. The other advantage is an individual who aspires to be on the board can do so via the structure and can be a real benefit to the club and although its all unpaid, there’s a real good feel good factor because you’re helping the entity succeed.” – Phillip Jones, Annan Athletic
Annan’s incorporation under this model will help the club go forward confidently with their aspirations, providing them with the necessary protection for members, assurance from external partners such as the local council in their governance and asset lock to safeguard its future and community involvement in its ownership. Perhaps most significantly, the CBS model gives Annan an ability to raise capital through a unique and innovative form of crowd funding – community shares.
Community shares are a way of raising finance by offering shares, but in a secure, co-operative legal form. As opposed to ordinary shares in ordinary companies, they seek investment from people that are most interested in the long term success of the Club as a community asset – with the added bonus that it is cost effective way that avoids the red tape that a private Company would face. By giving your supporters and community the chance to invest in the Club it strengthens their connection with it, and as we have seen with FC United it can open you up to significant grant funding opportunities.
It’s the same model that helped Portsmouth supporters take control of their club. Supporter owned Wrexham built a new shop and offices at the Racecourse Ground, and FC United of Manchester raise almost £2 million towards a new facility in Moston that will cost about £5.5 million. Outside of sport, more than 300 pubs and small shops which are now owned by their customers, many relying on community shares to raise the finance.
We’re on hand to support more clubs wherever they are in terms of their development. Get in touch by emailing us at email@example.com for more information.