Business Advantages of Supporter Community ... - Supporters Direct

About Supporters DirectSupporters Direct was formed in 2000 as an initiative of the UK Government.Its goal is to ‘promote sustainable spectator sports clubs based on supporters’involvement and community ownership’.Supporters Direct aims to create the conditions in which supporters can secureinfluence and ownership of their clubs, and campaigns for the wider recognition ofthe social, cultural and economic value of sports clubs.It believes that sports clubs and competitions are increasingly being put at risk byshort-term vested interests, poor financial management and inadequate standardsof governance.It began its activities in English football but is now working in more than 20 differentEuropean countries, and also works in rugby league, rugby union and ice hockey. Ithas offices in London and Glasgow.It is a community benefit society registered with the Financial Services Authority andowned by its member supporters’ trusts.

ContentsIntroduction 41 Strategic Partnerships 102 Finance 133 Sponsorship 174 Developing Facilities 215 Resilience 246 Co-operative ‘Added Value’ 277 Volunteering and Participation 308 Match Day Spending 349 Donations 3610 Transparency, Openness and Trust 4011 Supporter Satisfaction 4412 Conclusions 48

IntroductionThis paper is the fourth in Supporters Direct’s series of Briefing Papersand focuses on the potential business advantages of Supporter CommunityOwnership 1 . It is based on the practical experience of those who runsupporter community owned clubs and supporters of those clubs; andprovides both qualitative and quantitative evidence as well as casestudy material.The purpose of the report is to inform owners of clubs and local partnerssuch as local authorities, as well as the game’s administrators, about howsupporter community ownership can contribute to the sustainability andprosperity of football clubs. It will also provide evidence, precedence andarguments for supporters’ trusts in their work to achieve partial or fullownership of their clubs and share good practice.This work gathers together knowledge developed from the extensiveexperience of Supporters Direct working in this field as well as frompreviously commissioned research undertaken by Supporters Direct (TheSocial and Community Value of Football). The problems faced by supportercommunity owned clubs should not be under-estimated –Briefing Papers 1and 2 outline the changes in policy and football regulation that SupportersDirect believe are necessary to help overcome these. However, this paperprovides identified and evidenced examples of how supporter communityownership can be of genuine business benefit to clubs, assisting in their longterm health, growth and sustainability.1 This term builds on work by research co-operative Substance that identified supportersas communities that are routinely neglected within clubs’ formulations of ‘communitywork’ (see Brown, A, Crabbe, T and Mellor, G (2006) Football and its Communities, London:Football Foundation as well as Brown, A et al (2010) The Social and Community Value ofFootball, London: Supporters Direct). ‘Supporter community ownership’ is used to meaninstances where supporters have democratic and constitutional means to influence theclub’s operations and strategy.The most common means would be through a significant stake in the hands of ademocratic supporters’ trust (or its members), with significance being where the club hasno dominant owner or owners who make key decisions and where the trust’s stake gives itreal influence at boardroom level, up to and including having a majority stake in the cluband on the board of directors.Supporters Direct’s preference is for models based on co-operative and mutual structures,with a club board accountable to its members; but with a wide variety of circumstancesat clubs, it is recognised that there are other structures that might deliver similar features.Most important of these is a board accountable to an ownership base featuring openmembership, strong representation from the supporter base, with no dominant owner ordominant smaller group of shareholders, which can encompass clubs run as members’clubs or companies limited by guarantee.4 Supporters Direct Briefing Paper No.4

Since its formation in 2000, Supporters Direct has made a very strongmoral and political case for supporter community ownership, based on anunderstanding of football clubs as important cultural institutions. However,its work over the last three years – including its research into the socialvalue of football as well as this series of briefing papers – has sought toprovide more evidenced based arguments.In a context where some critics still believe that supporters are eitherincapable or inappropriate owners of football clubs – Louise Taylor’sargument that the idea of democratic supporter ownership is an ‘indulgence’and that ‘clubs should serve the fans, not pander to fantasies of democracy’ 2– the report provides an important counterpoint and, more importantly,evidence.Preparation of this briefing paper has involved new research of two kinds:i) Interviews with executive and supporters’ trust personnel of eightsupporter community owned clubs to produce case study material.ii) A supporter satisfaction survey of six supporter community owned andfive privately owned clubs to comparesupporter experiences.Since its formation in 2000,Supporters Direct has made a verystrong moral and political case forsupporter community ownership,based on an understanding offootball clubs as important culturalinstitutions.The purpose of this was to provideboth detail about the businessexperiences of those representingsupporter owners as well as newquantitative evidence of the impact onsupporter experience of different formsof ownership.There are two important parameters to the work undertaken that need tobe highlighted. First, it is acknowledged that the evidence and focus in thisreport is on clubs in the lower two divisions of the Football League as wellas non-league competitions, due to the fact that no clubs in the PremierLeague or Championship are supporter owned. However, many of thelessons are applicable across football. Also, whilst during this work thecomparative financial performance of supporter owned and privately ownedclubs was explored, as was other data such as attendances compared againstleague position, it was extremely difficult to provide any reliable like for likecomparisons as the clubs assessed varied so much in terms of both financialinformation provided and other factors affecting statistics.2 Louise Taylor (2011) ‘Clubs should serve the fans, not pander to fantasies of democracy’Louise Taylor, the Guardian, 13th January 2011Business Advantages of Supporter Community Ownership 5

Community Benefit SocietiesThroughout this report there are references to Community BenefitSocieties (CBS). This is the standard corporate structure forsupporters’ trusts registered with the Financial Services Authority.They were formerly known as Industrial and Provident Societiesbut new legislation means that all IPSs are either categorised asco-operative societies – mutual organisations (retail, membership,worker etc.) that exist for the benefit of their members and whichascribe to the co‐operative principles – or as community benefitsocieties – democratic, member-owned organisations, that have widercommunity benefits as core objectives of the society.Many supporter community owned clubs – especially in the FootballLeague due to league rules 3 – are formed as limited companies.However for those that are majority supporter owned (Brentford,Exeter, AFC Wimbeldon, AFC Telford) the majority stake is held bya CBS. Others (such as FC United) are purely formed as a CBS.Methodologyi) Supporter Community Owned Club TestimonyThe purpose of this element of the work was to provide qualitative evidenceof the experience of supporter community owned clubs in running theirbusiness. It is inevitably qualitative as well as subjective, but it provides auseful corollary to the findings of the Social Value of Football research.That report indicated that supporter community ownership could helpgenerate added social value for local communities; this report looks atthe issues for clubs that are supporter community owned as businesses.The research involved in depth interviews with personnel of supportercommunity owned clubs (majority ownership or major shareholder).The clubs were:l Brentford FCl Exeter City FCl Lincoln City FC3 The Football League requires clubs to be limited companies and as such a FootballLeague football club cannot be constituted as a community benefit society (although itcan be owned by one). For further information see Supporters Direct Briefing Paper No.2:Developing Football Regulation to Encourage Supporter Community Ownership in Football: p.136 Supporters Direct Briefing Paper No.4

The report is structured to include both elements of the research under thefollowing 11 headings:1 Strategic Partnerships2 Finance3 Sponsorship4 Facilities5 Resilience6 Co-operative Added Value7 Volunteering and Participation8 Match Day Spending9 Donations10 Transparency11 Supporter SatisfactionBusiness Advantages of Supporter Community Ownership 9

1 Strategic PartnershipsKey Question:Has community ownership helped with the club’s development of itsstrategic partnerships?Top Three Findings:i) Clubs all felt that supporter community ownership enables them todevelop deeper and more long term strategic partnerships.ii) Strategic partnerships were strongest with their local authority, but alsoin many cases with club sponsors (see 2.3 below for further details onsponsorship).iii) The ownership structure helps to build trust between organisations andmeans that outside organisations believe supporter community ownedclubs when they talk about benefiting the local community or their local‘reach’. As such it is easier for supporter community owned clubs toalign agendas with public or public benefit oriented strategic partners.Perhaps the most important impactPerhaps the most important impact of supporter community ownershipof supporter community ownership on strategic relationships is with localon strategic relationships is with authorities, but it also goes beyondlocal authorities, but it also goes this to other businesses, residents andbeyond this to other businesses, community partners. The ownershipresidents and community partners. of the clubs and transparency involvedhelps to cement and underpin clubs’position as a focal point for a range of partners, including other businesses,public agencies and local authorities.One example, Brentford FC, identified their local authority, Hounslow,as their main strategic partner and were adamant that it has been theircommunity ownership structure that has helped them to get as far as theyhave with the development of a new stadium. Donald Kerr, Chair of BeesUnited said‘The Local Authority believes us, when we say that we want to build a communityasset, in a new community hub, with a stadium at its heart. In fact, they’re nowasking us when we’re going to put in a planning application; at a time when otherlocal authorities are saying they won’t give land or planning permission, Brentfordhave been encouraged and supported in this for about the last 7 years.’10 Supporters Direct Briefing Paper No.4

At Exeter City, they have been able to forge a strong partnership withDevon County Council because of their supporter community ownership.Frances Farley, Non-Executive Director, ECFC said:‘Devon County Council have been big players and sponsored the back of the awayshirt last season because they found the aims and values of the club were sharedwith theirs. It was a good way for them to use sport, to use Exeter City FootballClub, to get their message out. If the club had been in private ownership, theywouldn’t have been able to do that.’In other cases local authorities have been sponsors of supporter communityowned clubs (such as Prescot Cables FC sponsored by Knowsley), havehelped enable supporter community takeovers (such as Chester FC)and have assisted in stadium development (Enfield Town). This reflectsSupporters Direct’s previous research on the social and community value offootball which highlighted the benefits of close collaboration between localauthorities and supporter community owned football clubs.‘Although generally relationships with localAlthough generally relationships with authorities were described as positive, therelocal authorities were described as was a sense of greater shared agendas andpositive, there was a sense of greater partnerships in the supporter communityshared agendas and partnerships owned clubs than in others…This suggestsin the supporter community owned a role for local authorities to furtherclubs than in others…develop relationships with clubs and, whereopportunities arise, derive value fromassisting or encouraging supporter ownership. There are important advantages here forlocal authorities working with supporter community owned clubs to realise their ownagendas.’ 4AFC Telford United – Local Authority Securing the GroundAFC Telford chairman, Lee Carter, believes that communityownership has really helped the club with the development offacilities. When the former club went into liquidation in 2004, thelocal authority was determined to keep football alive in Telford, evengoing so far as to pass a motion to ‘do all it practically can do tosupport the Directors of Telford United in their endeavours to keepfootball alive at the Bucks Head and promote a united Telford.’4 Brown, A. et al (2010), The Social and Community Value of Football, London: Supporters DirectBusiness Advantages of Supporter Community Ownership 11

The council took over the freehold of the ground and insisted ithad to remain a football ground, thereby ending the possibility of itbeing sold by the liquidators for any other purpose. The council thennegotiated with the bank that had taken over and bought the stadiumback, so that it owned the stadium, car park and surrounding area.Since the council stepped in to help save the ground, a partnershiphas developed between the club, the council and Telford Collegeof Arts and Technology (TCAT). Carter says that it is a challengein terms of raising finance, but they’ve been extremely successful,securing £1.1m from the Football Foundation in 2005 to build aLearning Centre, artificial pitch and Dome at the local college. AFCThave also since secured grant funding for various programmes thathave taken place within those facilities.In the seven years since the club was formed, the political leadershipof the council has changed, but the relationship has continued toevolve and remains as strong as ever, according to Carter:‘The ability of the relationship to withstand the change in administration andprogress is undoubtedly down to the fact that the club is community owned. Ourethos as a community owned club sits very nicely with the aims and objectivesof the council. I think that regardless of which colour party is in power, we willalways have a very proactive relationship with the local authority.’Carter believes that none of this would have been possible if the clubhad not been democratically owned by its supporters.Lincoln City – Building Relationships with Local BusinessLincoln City have just developed a scheme for using the lounge attheir ground. For £25 a month, local businesses can buy a key fobwhich will allow them access to free parking at the club, the loungeand its facilities, so that they can have meetings there. This initiativewas launched at the beginning of April 2011. The club also rentout Executive boxes for businesses to use (for example, if they’reconducting interviews).12 Supporters Direct Briefing Paper No.4

2 FinanceKey Question:Has supporter community ownership helped the club be financiallystable in ways that it would not if it were privately owned?Top Three Findings:i) The consensus of clubs was that supporter community ownership bringswith it an added onus to be financially responsible and live withintheir means, and that in this sense supporter community owned clubsare more likely to be financially stable than those in other forms ofownership. Two thirds of supporters of surveyed clubs also felt that theywere provided with all relevant financial information.ii) In addition, supporter community ownership allows clubs to raisefinance in other, more innovative ways. A leading example of this isthrough ‘Community Shares’ – the issuing of non-voting shares in aCommunity Benefit Society (the corporate structure for all supporters’trusts) something discussed further under facilities, below, and inSupporters Direct’s Briefing Paper No.3 on raising finance.iii) However, all clubs felt that whilst supporter community ownershipentails an additional check and balance against unsustainable levels ofdebt and overspending – through open membership, democratic shareownership, elected boards and a legal objective of financial prudence– this put them at a competitive disadvantage to other clubs that weremore likely to do this.Clubs interviewed believed that financial health was not on the wholedependent on the good will, soft loans or benefaction of an individual,family or private consortium: and a longer term approach to thedevelopment of clubs was evident. The CBS structure means that it ismore difficult to use equity in clubs in return for financial borrowing; andmore difficult (if not impossible) for clubs to go into administration, makingfinancial prudence and developing long term revenue stability paramount.Andy Walsh, General Manager, FCUM, outlined the longer term approachadopted by supporter community ownership:‘If the club were privately owned, the stability of the finances in the short termwould depend on how much the individual or consortium were prepared to investin the club; but in the long term, any private investment that’s not backed up byBusiness Advantages of Supporter Community Ownership 13

the stability of the football club being able to generate its own income, is only abad run or a death in the family away from instability.’The more ‘responsible’ approach adopted by supporter community ownedclubs addresses concerns that have been expressed elsewhere aboutfootball’s unsustainable finances. The 2009 and 2010 Deloitte AnnualReviews of Football Finance have highlighted serious concerns about theway that the majority of football clubs manage their finances:‘Below the top two divisions, managing a club’s financial position remains achallenge from one season to the next. Legacy debt issues and the risks taken bysome boards of directors will, without correction, inevitably lead to a continuingflow of insolvency cases in the seasons to come.’ 5‘The model of profit maximisation is now pursued by a very limited number ofclubs, and whilst some clubs seek to break even on a consistent basis, the emergingnorm for many Premier League and Championship clubs appears to requiresignificant ongoing benefactor support. We appear to be seeing a continuing shiftfrom a sustainable “not for profit” model towards one with potentially calamitousconsistent and significant loss making characteristics.’ 6However, this model of football governance creates an unlevel playingfield between clubs that do not take on unsustainable debt, benefactorloans or overspending and those that do. This is a major problem forsupporter community ownership and points to a structural failure infootball that cannot be addressed by a single club’s ownership structureson their own. Indeed, one club, Brentford, have effectively voted to endmajority supporter community ownership in order to sustain the businessin the competitive environment which exists at a higher level of football.Solutions to this issue, in the form of improved regulation, are presented inSupporters Direct’s Briefing Papers 1 and 2. 7Frances Farley, Non Executive Director of Exeter City, challenged theunlevel playing field and ‘financial doping’ supporter community ownedclubs have to contend with:‘Is it a good or a bad thing that we can’t go and borrow money because we can’tsecure it against anything? It does mean you can’t compete in the same way asother clubs. Clubs…who have gone under, have acquired millions of pounds ofdebt from spending too much, usually on players, which effectively equates tocheating, because they’re spending money they don’t have on expensive playerswho are playing against Exeter City... It’s not necessarily down to the ownership5 Deloitte (2009) Safety in Numbers: Annual review of football finance, London: Deloitte6 Deloitte (2010) National Interest: Annual review of football finance, London: Deloitte7 Briefing Paper 1: Developing Public Policy to Encourage Supporter Community Ownership inFootball, London: Supporters Direct; Briefing Paper 2: Developing Football Regulation toEncourage Supporter Community Ownership in Football, , London: Supporters Direct14 Supporters Direct Briefing Paper No.4

model, but to football governance and wage capping.’That notwithstanding, supporter community ownership – by givingsupporters control of their clubs – also helps to address a commonmisconception about club spending, namely that a lack of financialprudence amongst privately owned clubs is due to pressure from fansfor success. In surveys conducted as part of the Social Value of Footballresearch 8 , when supporters were asked what they valued about their clubs,it was not their success on the field, but their importance within their family,social and communities’ lives that was paramount.In addition, in the Football League Supporter Survey 2010, respondents wereasked to identify what the Football League’s priority for the future shouldbe 45% of fans (rising to 52% amongst League 2 supporters) indicated thatensuring the long term financial survival of its 72 member clubs should bethe focus; something they viewed as distinct from just raising revenue, withjust 6% stating that this should be its main aim.By placing clubs in the hands of supporters, such disjunctures betweenprivate club practice and supporter wishes can be addressed.In our supporter survey, we asked whether fans felt that their clubsprovided them with all relevant financial information.l 66% of respondents for supporter community owned clubs felt theirclubs provided all relevant financial information to supporters, whereasonly 38% of supporters of other clubs felt this.l The highest score was at FC United where 87% fans felt they wereprovided with all the relevant financial information.AFC Wimbledon – Budgeting Responsibly Off the Pitch,Winning On ItThe club budgets to break even every year and they run the business‘as effectively as we can’. The budget is calculated on a conservativebasis at the beginning of the year, so they know in advance thatthey can afford their player budget. In a good year, playing budgetscan be adapted to add to the squad. The club made a small loss ofunder £75,000 in 2010, having made a profit of £35,690 in 2009.Also, AFC Wimbledon contradict the theory that you have to spendunsustainably to achieve success, having achieved promotion to theFootball League under this system in 2011, alongside big-spendingCrawley Town.8 Brown, A et al (2010) op cit: 55Business Advantages of Supporter Community Ownership 15

Erik Samuelson, AFCW’s Chief Executive says that:‘Based on a search of publicly available information as of 2009, 11 of theclubs in this division (Blue Square Conference) were “arguably bankrupt”and the reason that they don’t go under is that they are funded by short termloans from directors or parent companies. Those short term loans are not usedto invest in the infrastructure of the club, like the ones that AFC Wimbledonhave, they are used to spend on wages. This means the operational costs ofthese clubs are obtained by short term funding from directors who may or maynot choose to stay involved.’Despite this uneven and unsustainably competitive environment,AFCW’s supporters remain committed to a responsible approach:‘In a recent survey we’ve been doing with fans, of all the things they wantmore than anything else, it’s to retain ownership of the club. So, [because ofthe ownership structure] even if you had someone coming to the club offeringa million pounds, all they would get in return is a parking space, so [abenefactor situation] is unlikely to happen.’In that survey, it was found that ownership ‘was the criterion aboutwhich people feel strongest’ and that a strategy to ‘remain fan owned’was preferred ‘by a very long way’ over any other non-fan ownedoption, including pursuing a ‘fast track’ to promotion.AFC Telford United – Profiting in Non LeagueSince it was established in 2004, AFC Telford United has recordeda small operating profit each year. Chairman Lee Carter sees this astestimony to the fact that they manage, monitor and control theirfinances very carefully, something they have had to because they canonly spend what they generate. The people managing the financesare acutely aware of the fact that they are guardians and have to dowhatever they can from a financial perspective to make sure thatthe club remains sustainable on a long term basis. Carter says it’s adifficult challenge due to cash flow fluctuations so they operate fromcash, so they have to monitor it very carefully. He feels that privateownership models are very much based on there normally beinga difference between income and expenditure and that differencebeing made up by the owners. Lee believes that therefore makes thefinances of privately owned football clubs a lot more unstable, becauseyou operate at the whim of the pocket of the owner/chairman.16 Supporters Direct Briefing Paper No.4

3 SponsorshipKey Question:Has community ownership helped with development of sponsorship,especially longer term/strategic support and innovative practice?Top Three Findingsi) Most of the clubs that we interviewed felt that their ownership structurewas beneficial in helping them to generate levels of sponsorship aboveand beyond what they might expect to attract given their current leagueposition. In part this is underpinned by the relatively high crowds somesupporter community owned clubs achieve relative to their league status.ii) However, there was also a sense that the relationships developed withsponsors often encompassed a broader range of activities and ‘depth’than might be seen at non-community owned football clubs.iii) In some instances sponsors were only interested in being associated withthe community profile and activities of the club, rather than the moretraditional ‘commercial’ operation and profile.In some cases sponsors are more attracted to supporter community ownedclubs because their attendances (andIt is also the reputational value of membership) far outstrip most ofsponsorship associated with a club their competitors at the same level,owned by its supporters that is the particularly among non-league clubs.added value for sponsorsThis has been true of FC United, AFCTelford United and AFC Wimbledon.Also important is the reputational value of sponsorship associated with aclub owned by its supporters and local community. In some instances thisalso helps to underpin a longer term relationship between club and sponsor,as the AFC Telford United case study illustrates.Furthermore, the CBS structure of supporters’ trusts means that they havea legal obligation to be of benefit to their communities. This strengthens theassociation of sponsors with community benefit outcomes. The activities ofclubs in their community and the desire of sponsors to be associated withthese outputs is something that has been evident in other club ownershipstructures and relates to some corporations’ social responsibility agendas.However, the added value of supporter community ownership is the closerrelationship with supporter communities and community obligations of theBusiness Advantages of Supporter Community Ownership 17

supporters’ trusts.AFC Wimbledon – Sponsors Believing in the ApproachAFC Wimbledon’s shirt sponsor is Sports Interactive, who havebeen involved with the club since its inception in 2002. According toWimbledon’s Chief Executive, Erik Samuelson, Sports Interactive gotinvolved with the club because they like what the club are trying to do:‘You attract a particular type of sponsor; some of them understand and arewilling to pay more than the commercial value because they believe in thecommunity impact you’re having. I believe that some of our commercialsponsorships are better than you could feasibly expect for a club of oursize but part of it is also down to the emotion surrounding our particularcircumstances.’Sports Interactive have also benefited from the added value that AFCWimbledon’s profile gives them,Sports Interactive have alsosomething that is dependentbenefited from the added value that on their history and fan ownedAFC Wimbledon’s profile gives status. This even stretches tothem, something that is dependent exposure on the TV show Newon their history and fan ownership. Tricks, where a detective wearstheir shirt.AFC Telford United – Long Term SponsorshipLee Carter claims:‘Our ownership model means that we have a good eye for detail and place alot on our customer relationship management. I think that comes naturally tous because of our make-up, ethos and the way we do business and is probablytherefore more attractive to sponsors’.When AFC Telford United was launched, it coincided with theestablishment of Cap Gemini in Telford. Cap Gemini has beeninvolved since the outset and said they will remain involved with theclub until they leave Telford in 2017. Carter says it has been a realbonus for Telford to have that kind of stability, especially as a newlyreformed club.18 Supporters Direct Briefing Paper No.4

Over the seven years that the fans have been running Telford,Carter says that they have seen a shift amongst their sponsorsfrom just providing advertisingOver the seven years that the fans in the ground, to becoming veryhave been running Telford, Carter tuned into their corporate socialsays that they have seen a shift responsibility (CSR) objectives.amongst their sponsors from just The key sponsor, Cap Gemini,providing advertising in the ground, is very keen on that. Carterto becoming very tuned into their thinks that the fact that they arecorporate social responsibility a community-owned footballobjectives.club aligns itself very neatly withpotential sponsors’ CSR objectives.He thinks that’s probably the most outstanding aspect and the club’smost attractive feature for potential sponsors in comparison withprivately owned clubs.The club work with Cap Gemini in a variety of ways – for example,when they’re doing football coaching in schools, Cap Geministaff come and give out information on healthy eating. Carterthinks that whilst this might have initially seemed very strange tothe organisation, they are now very comfortable with this kind ofinvolvement and see it as a big positive for them.FC United of Manchester – Backing For a Community ClubAndy Walsh, General Manager of FC United, said that it is theassociation with what the club stands for, rather than a straightcommercial proposition, which attracts sponsors:‘Last time we conducted a survey of sponsors, we asked what the sponsorswanted from their association with the club, with the overwhelming responsethat they support what the club is trying to do in the community and the idealson which the club was founded. That was considered by the sponsors to be themain commercial advantage and that they are doing it because they believe,like the members of the club, that this is the way football should be run’.FC United approach their sponsors to assist directly with the club’scommunity work – for example, if they are running a tournamentat a community event, they ask sponsors if they want to assist inthat work. FCUM have also asked sponsors to assist the club withfundraising for local charities.In 2007 FC United’s members voted overwhelmingly to establish aclub rule that they do not have advertising on their playing strip, barBusiness Advantages of Supporter Community Ownership 19

the club crest and manufacturer which are restricted in size.As a rule of the IPS constitution this can now only be overturned bya 75% majority vote and is unique in football. Whilst this means somesponsors looking for a more traditional relationship do not workwith the club, others are keen to be associated. FCUM have evenhad discussions with kit suppliers about producing a kit that doesn’thave a company logo on it, and Walsh believes the fact that they arewilling to discuss this is due to a desire to be associated with whatFC United are doing.In July 2011, FC United announced their first ever main clubsponsorship deal with MXData. Despite not getting exposure onthe club’s shirts, because of the club’s rules, the main motivation forMXData is to associate itself with FCUM’s community approach andfan ownership model.20 Supporters Direct Briefing Paper No.4

4 Developing FacilitiesKey Question:Has community ownership helped with development of facilities?Top Three Findingsi) Supporter community ownership assists clubs in getting commitmentfrom key public sector partners – especially local authorities – becausethere is a level of protection of public benefit and transparency thatprivate companies do not provide; as well as an alignment of publicbenefit agendas.ii) Assistance from local authorities ranges from provision of land, fundingand ‘in kind’ support for ongoing strategic partnerships and deploymentof planning regulations to protect assets from speculators.iii) Supporter community ownership – in the form of community benefitsocieties – also allows clubs to raise finance for facilities in innovativeways that do not jeopardise the long term future of the club and cementthe community benefit function of facilities developed.The business advantages of being a supporter community owned club areparticularly striking in the area of facility development. Evidence gatheredThe strategic, financial and inkind support of local authoritieshas been a key feature of facilitydevelopment by supportercommunity owned clubs.as part of this piece of work as wellas during the Social and CommunityValue of Football research suggests thatthey would not have their new facilitydevelopment if they had not beensupporter-owned.The strategic, financial and in kindsupport of local authorities has been a key feature of facility developmentby supporter community owned clubs; because authorities can rely onthe community benefit function of clubs; and their open and democraticownership structure. This type of reliance is simply not possible withprivately owned clubs.In addition, there are distinct advantages to a CBS structure. One of these isthat clubs that are supporter community owned can raise significant financefor facilities via shares in the society. This is explored in greater depth inSupporters Direct’s Briefing Paper No.3 on raising finance 9 .9 See also Development Trust Association and Co-ops UK (2010) Investing in CommunityShares and www.communityshares.org.uk for further information. Add to footnote. See also,Jaquiss, K and Walsh, A (2011) Punk Finance: Capital Made Mutual, London: MutuoBusiness Advantages of Supporter Community Ownership 21

Supporter community owned clubs have an advantage because they canraise finance relatively cheaply and easily, without going into debt, or givingup equity in the club and without altering their one member one voteownership structure. It also ensures that capital raised is used primarily forcommunity, rather than private benefit.Runcorn Linnets – Back Home With Council BackingRuncorn Linnets were formed in 2006, after the demise of RuncornFC. At this time they played at Witton Albion FC, as they lacked asite in Runcorn with facilities up to the required standard and theold ground had been developed for housing. The club developeda relationship with Halton Borough Council as they needed theirsupport to move back into Runcorn.Derek Greenwood, the Linnets’The Council’s support was aChair, says that they were verydirect result of the potential that a fortunate because they had a verysupporter community owned club good contact at the council – theoffered the local area and the level Head of Culture and Sport andof buy-in from fans.quickly had access to the ChiefExecutive of the Council. A subgroupmet with the Council regularly and this helped establish trustbetween the Council and the club.The Council offered the club land in the new town area of Runcorn,which was part of an existing sports facility with pitches and an oldgym that has now been developed into a function room.The Council’s support was a direct result of their realising thepotential that a supporter community owned club offered thelocal area and the level of buy-in from fans. Greenwood said:‘The old club originally was very much a central part of the community ofRuncorn, but never really spread itself out into the community. That meantthat when the end came there was nothing there to support the club – theycouldn’t go back a step and run a youth team or anything, because therewas nothing there at all. Right from the outset our plans were that thistime round, it was owned by the fans and could never go down the road ofone-man ownership again and secondly to ensure that whatever we did, weinvolved the community.’The Council offered the club a grant of £100,000 to develop the landand they secured a further £93,000 from the Football Foundation,22 Supporters Direct Briefing Paper No.4

whilst supporters raised £30,000. This allowed the club to createa stadium which meets Step 4 requirements (Northern PremierLeague), one level above where they are currently playing with thepotential to develop the ground further. The close relationship alsomeant that the council managed the project for Linnets. Greenwoodbelieves that this level of support was only possible as a supportercommunity owned club. He said that if it had been a traditionallimited company structure, with the potential for asset stripping orfor funds to be used for other purposes, the scheme would not havehappened.FC United – Raising New Forms of Facility FinanceFC United have raised £1.3m to date via a Community Sharescheme to support the development of a stadium and communitysports complex. FCUM are one of ten pilot projects in the countryin a scheme supported by Co-ops UK, the Development TrustAssociation and the Cabinet Office.As a community benefit society,As a community benefit society, the the club can issue shares that allowclub can issue shares in the club – people to invest but do not carryshares that allow people to invest voting powers, protecting the club’sbut do not carry voting powers, one member one vote ownershipprotecting the club’s one member structure. These are issued againstone vote ownership structure. an offer document that outlineswhat the investment is to be usedfor and, critically, prioritises the community benefit function of theasset to be developed.Alongside a donation scheme that has raised over £350,000 it hasmeant that the club can put significant capital – around 50% of thetotal scheme – into the project, helping to leverage in other grantsand investment from the local authority.Underpinning this is a statutory asset lock that FC United have put inplace which means that the use of the money members have investedin the new asset is protected – the facility cannot be sold on in orderfor proceeds to be distributed to shareholders.Business Advantages of Supporter Community Ownership 23

5 ResilienceKey Question:Does community ownership help develop resilience amongstsupporters, for example helping attendances hold up whenperformances are poor?Top Three Findingsi) Most clubs interviewed felt that their attendances were sustained evenwhen performances were poor because of their ownership structure.ii) This additional buy-in from supporters was dependent on theirownership of the club, the additional ‘buy-in’ that this brings and theirrecognition of the business importance of their support.iii) Opinion was more divided over the support for managers beingmaintained, however, satisfaction levels for supporter community ownedclubs tended to be higher than for other clubs.Several clubs said that they felt attendances were more likely to remainconsistent irrespective of performance, because supporters realised theimportance of their role in sustaining the club and that they owned thebusiness they were supporting.At Lewes, since the club wasAt Lewes, since the club wassaved as a community benefitsaved as a community benefit society, attendances have increasedsociety, attendances have increased significantly. In the season beforesignificantly.community ownership, the averageattendance was 433; in 2010/11 it was679 – an increase of 57% in a year when the club has been in the relegationzone all season and was eventually relegated. Exeter reported increases ofaround 70% once owned by the supporters’ trust and Telford have brokenattendance records on more than one occasion at different levels of the nonleague pyramid.Donald Kerr from Brentford’s supporters’ trust, Bees United, said:‘When the Trust first took over and the supporters understood we didn’t have thecash, we did pretty well. I used to stand near someone who would always shout,irrespective of who the chairman was, “get your cheque book out”. When the Trusttook over, people would say to this man “well, it’s your cheque book now mate”.24 Supporters Direct Briefing Paper No.4

FC United of Manchester 80%Luton Town 69%AFC Wimbledon 64%AFC Telford United 62%Exeter City 56%Boston 53%Brentford 52%Colchester United 49%Halifax Town 44%Lincoln City 38%Torquay United 28%Percentage of supporters for whom attendance would remain thesame or increase regardless of team performance.AFC Telford United – Attendances Holding UpLee Carter said that Telford’s attendances had been assisted by itsownership structure:‘People know that they are part of something; that they are integral to thefunding of this club and that therefore when they ask themselves the question“can I be bothered to turn up and watch that rubbish again?”, they say “yes”,because they know that if they don’t, that will have a knock on effect on ourability to compete going forward. It makes us more resilient as a business’.‘However, that same resilience doesn’t extend to the manager! Football ispartly about finding someone to blame when things aren’t going right and itdoesn’t matter what way you’re owned or what model you operate, I thinkthe manager will always come under question. I don’t think it immunises themanager from any pressure, but I do think it does the owners and levels ofattendance.’26 Supporters Direct Briefing Paper No.4

6 Co-operative ‘Added Value’Key Question:Does co-operative community ownership help create ‘added value’ forthe club?Top Three Findingsi) Most of the clubs felt that community ownership could give themadvantages when marketing the club as co-operatively owned.ii) Some clubs have overtly and deliberately used this distinctiveness totheir strategic business advantage.iii) Clubs who felt that this impact was limited said that this was due moreto the limitations of their overall marketing strategy overall rather thantheir co-operative ownership.Most clubs involved in this work feltMost clubs involved in this work that marketing their businesses asfelt that marketing their businesses co-operatively owned gives them aas co-operatively owned gives competitive advantage over companiesthem a competitive advantage over owned in more common, privatecompanies owned in more common, ways. This was based on it giving themprivate ways.distinction in the market place butalso a set of demonstrable values withregards to co-operation, financial responsibility, democracy and communityinvolvement that other clubs could not match.Lee Carter from AFC Telford United said that the ‘closeness’ of supporters,staff, players and officials was something that helped attract wider audiencescompared with other football clubs:‘The power of the community owning the club is still the most attractive messagewe can get out to the public. Our ethos is attractive to people once they can seethat Telford is a family-friendly, community-owned club, where they can bringtheir children to games and have that experience of touching and feeling a footballclub again – being able to speak to a manager or get the autograph of a playerand feel a part of something. I believe that is what community ownership gives usand that’s very powerful in terms of our marketing.’One point that was raised by several clubs was that it does take time to buildan understanding of what co-operative ownership means and to changeBusiness Advantages of Supporter Community Ownership 27

people’s perceptions of what a football club can be about. However, takinga long term approach to this can mean that there is a wider understandingof what makes the club different – such as the co-operative potential andwider community benefits – and that this can lead to significant businessadvantages.FC United refer to their 3,500 members as ‘co-owners’ in their literature andcommunications with members. Indeed, in their membership renewal noticesfor the 2011-12 season, they have made special emphasis of the differencebetween a member of a club and membership with ownership rights.This approach reflects marketing approaches elsewhere in the UKeconomy being adopted by the Co-operative (‘Join the Revolution’) as wellas mutually owned businesses such as England national team sponsors,Nationwide (‘proud to be different’). It also reflects approaches in the US,such as Global Co-operative Consulting’s ‘marketing our co-operativeadvantage’, that says it builds on:‘The knowledge that co-operatives are of increasing value in a global worldeconomy in which people are concerned about enhancing their influenceover their economies, protecting the ecology that sustains life on our planet,enhancing democratic values, and fairly distributing wealth in our world.’ 10Exeter City – Marketing Community OwnershipFrances Farley at Exeter City said that they took a holistic viewof their club and community ownership because they saw it as astrategic advantage.‘When we market anything, we have key phrases to encapsulate what we’reabout. “We own our football club” is used in all our literature to show thatwe’re different. We also use “Doing things the right way”, which relates toeverything, how we treat our creditors, our customers, the players, each otheretc – we do things properly, the right way. The message is that Exeter is acommunity club.’‘One of the best things you hear at the club these days is on the terrace, whenthe Exeter fans break out into “We own our football club”. It’s something theyare proud of’, says Neil Le Milliere of the Supporters’ Trust.Farley says that it still takes time for potential clients and businesspartners to understand that the club is different and to change theperception that they are ‘just another football club like any other’.Work is needed to create an understanding of why being a supporter10 http://www.global-co-operation.coop/MarketingOurCo-operativeAdvantage.htm28 Supporters Direct Briefing Paper No.4

community club can be an advantage and it can take years to buildrelationships. Indeed, although local authorities are generally morereceptive to supporter ownership, in their case it took three or fouryears to create the current positive relationship with the CountyCouncil. Having such a large strategic partner also then gives otherpeople and businesses confidence – ‘people think that if the CountyCouncil works in partnership with the club, then why shouldn’t they?’Brentford – BITC Community Mark AwardBrentford have been able to profit from their supporter communityowned status by becoming the first club in the Football League towin the Business in the Community ‘Community Mark’ – a Britishstandard of community engagement. Donald Kerr thinks this islinked to them being a supporter-owned club, because it is anacknowledgement of the work they do within the community andhow they interact with it. Only 40 companies in the country have thismark, most of which are large blue chip companies. The only otherfootball clubs to have achieved this status are significantly betterresourced than Brentford, namely Blackburn, Liverpool, Rangersand Hearts.Business Advantages of Supporter Community Ownership 29

7 Volunteering and ParticipationKey Question:Does supporter community ownership help encourage volunteeringand participation from supporters?Top Three Findingsi) Supporter community ownership means that fans have a greater ‘buy-in’and commitment to their club, which means that they are more ready tovolunteer to help the club.ii) Tapping into supporter volunteering can unlock a huge reservoir ofskills amongst the supporter base that can be a genuine businessadvantage to the club, something that result in the club being moreprofessionally run.iii) There are some extremely innovative schemes that seek to ‘value’ thecontribution of volunteers to their clubs, to give additional protectionagainst the possibility of the club being taken over.The greater sense of ‘buy-in’, engagement and inclusion of a wider crosssectionof people which seems to be common at supporter communityowned clubs in comparison with their privately owned counterparts isperhaps most evident in the area of volunteering and participation.For example, AFC Wimbledon receiveWhen you’re a football club that’s a massive amount of voluntary supportTrust owned, lots of supporters are on an ongoing basis, with aroundprepared to do things for the club – 250-300 volunteers contributingfor free, profit-free, at cost price etc. annually. Roles can involve everythingfrom sweeping out the toilets todesigning a new stadium. Even the Chief Executive, Erik Samuelson, aformer PricewaterhouseCoopers partner, who is responsible for running thefootball club on a day-to-day basis, is a volunteer, although his is paid oneGuinea per year!‘When you’re a football club that’s Trust owned, lots of supporters areprepared to do things for the club – for free, profit-free, at cost price etc.,’says Neil Le Milliere of Exeter’s supporters’ trust.‘You have a huge hitherto perhaps untapped resource, which suddenly becomesavailable. That can mean you get all sorts of work done for free, which otherwise30 Supporters Direct Briefing Paper No.4

at a “normal” football club, you’d be paying for. Your costs go down. At ExeterCity, at the end of every game, you’ll see people sweeping the ground, as with allfootball clubs; the difference is that at Exeter City they’re doing it for free, they’resupporters who at the end of the game will pick up a broom.’Such ‘routine’ match day volunteering did not occur before the club wassupporter owned and indeed levels of supporter volunteering for core clubbusiness is relatively low in football. Supporter volunteering can also leadto the development of new areas of operation. At FC United this has lead tosupporters being involved in every aspect of the club and the developmentof new services for supporters, including the establishment of a free internetradio station and free internet TV highlights of games.‘Engagement goes beyond putting a tick on a ballot paper once a year at a generalmeeting,’ says Andy Walsh. ‘It’s about supporters themselves running their clubin every way – they staff the turnstiles, they write, design and sell the programme;they procure the merchandise from suppliers, decide what the price is and put iton sale; they run events on match days including bars and putting on bands; theyrun the radio with 24 / 7 online output and over 30 different presenters; andsupporters televise games and put them on the internet. We currently have an Alevel student operating as our match day cameraman, under the supervision ofpeople who’ve done it professionally.’The added ‘social value’ generated through volunteering helps support thebrand image of supporter community owned clubs, something that hastangible business benefits (highlighted in the section on sponsorship).Supporter SurveyIn our supporter survey we asked supporters about their involvement in theclub as well as their volunteering with clubs.InvolvementWe asked about supporters’ sense of involvement in their club and askedthem to indicate which of a series of statements was most accurate 11 .● On average 47% of all respondents said they felt very involved in theirclub.● Amongst supporter community clubs, this figure was 52%, comparedwith 26% amongst supporters of other clubs.11 These were: ‘I’m not interested in being involved in my club beyond attending matches’;‘I don’t feel very involved in my club but would like to be’; ‘I feel very involved in myclub’ and ‘I don’t know’Business Advantages of Supporter Community Ownership 31

VolunteeringWe asked supporters both whether they currently volunteered for their cluband also whether they would be more likely to volunteer if the club wassupporter owned.Current Volunteering● In general levels of volunteering were very low. Only 15% of allrespondents currently volunteer for their club.● However, a huge majority of these, (92%), were supporters of supportercommunity owned clubs.Future Volunteering● 51% of respondents said they would be more likely to volunteer if theirclub was supporter owned● Just 2% said that they would be less likely to volunteer● 35% said that it wouldn’t make a difference or that they didn’t know.● 58% of supporter community owned club respondents said they wouldbe more likely to volunteer if the club remained supporter owned, butonly 23.5% of respondents who support other clubs said the same.Lewes FC – A More Professional Approach From VolunteersCharlie Dobres, from Lewes FC said that when they started toestablish a community ownership and community benefit model,many people misunderstood the concept. However, they havemanaged to demonstrate that even at a relatively small club, theownership model has helped them tap into a well of professionalskills and experience that the club would otherwise not be able toafford. This, he argues, has resulted in a more professionally run club.‘What we’ve tried to demonstrate is that it’s about opening the doors so thatyou’ve got greater usage of human resources. The people we’ve got running theclub are professionals in their field, almost all of whom give their time entirelyvoluntarily and are happy to do so. Ironically, by becoming community owned,we’ve actually opened ourselves up to far greater professionalism in the runningof the club – it’s not one man and his dog any more. We’ve found that we nowhave a far greater call on resources, both financial and human, because of beingnot-for-profit as well as the community mutual ownership model.’32 Supporters Direct Briefing Paper No.4

Exeter City – Valuing Supporter VolunteeringBy the end of May 2003, just after Exeter’s relegation from theFootball League, the Supporters’ Trust kept the club afloat and thethen majority shareholder, Ivor Doble, asked the Trust to run the clubon his behalf for 6 months to prove that they could do it.This involved:● Finding a manager● Developing a team● Getting the ground up to standard● Fund raisingVolunteers and work parties set about doing up the ground, tidying,painting and repairing facilities. The amount of voluntary labour thatwas being put in was quantified, in order to put a figure on it, basedon the number of hours worked, assuming payment at minimum wagelevels. This was then classed as a loan from the Trust to the club.‘It was very important to recognise the value of work done by the community,when getting Ivor Doble to sell his shares, so that the supporters were not doneover, as happened at York City,’ said Frances Farley.This approach has continued to the present day and the supporters’trust continues to give the club a monthly lump sum made up ofboth cash and the value of the hours donated by volunteers. Theadvantage of this unique approach is significant for the long termprotection of supporter community ownership, says Neil Le Milliere:‘All of that volunteering goes to a credit account, which acts like a loan aswell. So if the club were to go bust again, we’d be the majority shareholderand we’d have the major credit line, so we will be the ones in control of whathappens to it. It’s basically an insurance policy against something else dodgyhappening and the club being wrested away from us. The idea is that whatwill happen eventually is that there will be a transfer of equity, so that there’dbe a share issue of some sort and we would exchange our loan for shares toincrease our shareholding.’Business Advantages of Supporter Community Ownership 33

8 Match Day SpendingKey Question:Does supporter community ownership help generate greater levelsof match day spending?Top Three Findingsi) Clubs felt that fans were more minded to spend money on a matchday at club owned facilities (where they existed) because they owned atangible stake in the club.ii) Most clubs did not have any figures to substantiate this feeling, however.iii) Some clubs had developed innovative ways for supporters to contributemore whilst also maintaining affordability.Match day ‘second spend’ is a keyMatch day ‘second spend’ is a key element of income for all the clubselement of club income for all surveyed. However, ensuring thatthe clubs concerned. However, spending was far more achievablecapturing that spending was far when clubs owned their own facilities.more effective when clubs owned For those that did not own theirtheir own facilities.facilities, securing that spending was amajor motivation for developing them.Facilities permitting, many of the clubs interviewed felt that supporterswould be more likely to spend a greater amount of money within theground because they knew it would benefit the club directly.However, the ‘added value’ of community supporter ownership in thisregard is very difficult to quantify in any meaningful sense, because it isalmost impossible to compare like with like, although a few of the clubs hadsupporting statistics.One club who have calculated current match day spending is AFC TelfordUnited, whose current second spend is about £2 per head. They are alsodeveloping ways in which they can monitor this more effectively, includingadoption of practices seen at much larger clubs, such as an AFC TelfordUnited club card. AFC Wimbledon estimate their match day secondspend at around £2.00 per head, which on crowds of 3,000 is a significantrevenue stream.34 Supporters Direct Briefing Paper No.4

FC United of Manchester do not currently own their own facility andthis means that they miss out on the vast majority of match day spending.As part of their plans to develop their own ground they surveyed 1,400supporters in 2009 to ascertain what supporters currently spend on food,alcohol and soft drinks. This suggested that average spend was around £9on all additional items other than admission to the match. In addition theclub asked how often fans would use a club bar and over 50% said everymatch, with 20% saying they would use it ten times per season. The clubalso asked whether fans would use club house facilities on a non-matchday, as a private hire for functions, and 27% said that they would, with47% saying they would possibly use it depending on the development.FC United of Manchester – Pay What You Want!FC United introduced an innovative scheme for selling season ticketsfor the 2009-10 season, that has continued to date. In order to meettheir obligations to provide ‘affordable’ football in the face of a creditcrunch and increasing unemployment, the club introduced a ‘paywhat you can afford’ policy for season tickets.Although they set a minimum of £90 (around 50% of average matchday entrance costs for the league), fans were asked to pay a donationover that figure if they could afford it. Season ticket prices hadpreviously been £140. At the end of the ‘pay-what-you-can-afford’campaign, people had paid on average £160 for their season ticket.Also, the club offered a facilityThe club offered a facility for those for those that could not afford thethat could not afford the minimum minimum £90 fee, putting in place£90 fee, putting in place a standing a standing order scheme so thatorder scheme so that people could people could pay by instalments.pay by instalments.One supporter said he could afford£10 a month over ten months andwhen the club checked he was in fact paying in £20. The supporter’scomment was that because the club had trusted him to carry onpaying and that it was a club he co-owned, he decided he would pay£20 a month, because he’d have to pay more than that if he waspaying on the gate.Business Advantages of Supporter Community Ownership 35

9 DonationsKey Question:Does supporter community ownership help generate higher levels ofdonations from supporters?Top Three Findingsi) Supporter donations have been a key feature at the clubs we spoke to,and are another demonstration of the commitment of supporters tosupporter community owned clubs.ii) In many cases donations have been an important element of enablingthe club to be saved, formed or purchased; and donations provide vitalworking capital for other fund raising.iii) As supporter community owned clubs become more establishedsupporter donations are also an important element in enabling futuredevelopments – notably facilities and growth.All the clubs felt that their ownership structure meant that their supporterswere willing to contribute donations to assist the club. For AFC TelfordUnited, Exeter City, FC United and Lewes supporter donations have beeninstrumental in establishing the club.● AFC Telford raised £17,000 in the space of just two weeks to helpestablish the new club.● Lincoln City Supporters’ Trust raised £100,000 through a name yourseat campaign.● FC United of Manchester raised £150,000 in two months via theinternet to enable the club to form in 2005 – this was necessary toprovide a guarantee to the league and FA that the club was sustainablethrough that first season and it provided confidence to other partners. Alldonors were given ‘Founding Member’ certificates.Supporters of community ownedclubs recognise the important rolethat they play with regards to theirsustainabilityAs highlighted elsewhere in this paper,supporters of community owned clubsrecognise the important role that theyplay with regards to their sustainabilityand this would appear to extend to36 Supporters Direct Briefing Paper No.4

the area of donations. Many clubs who are currently supporter communityowned have become so in response to a financial crisis, which has resultedin supporters coming together and raising large amounts of money in acomparatively short space of time in order to save their club. However, notall of the examples of supporter fundraising we discovered were reactive,with a number of clubs operating innovative schemes to ensure that theirclubs can remain financially stable.Furthermore several clubs pointed to ongoing support, especially in relationto development or improvement of facilities. For example:● Exeter City raised £150,000 to support the purchase of a new pitch.● FC United has raised over £350,000 through its Development Fund tosupport the development of their own ground and community facility.Neil Le Milliere of Exeter’s supporters’ trust said:‘Whenever we put out an appeal for something, we will always get people helping.Last year we had a special appeal to buy a new pitch and we got thousands ofpounds in donations, which I’m not sure you would at another club unless it was acrisis. People understood that the alternative would be to take the money out of theplaying budget. We needed £300,000 and managed to raise half of it.’Lincoln City – Name Your SeatIn 2002, Lincoln’s supporters’ trust helped save their club viaa ‘Name Your Seat’ initiative which, along with a host of otherfundraising events, raised over £100,000. Since then, the supporters’trust have provided over £140,000 to the football club in sponsorshipand other initiatives.The Imps Trust is a major share holder, (with approximately a 25%stake in the football club) and also has two representatives on theclub board. Lincolnshire Co-operative is one of the next largestshareholders with around 5% and a director on the board. They havealso sourced more than £200,000 in grants towards the improvementof resources at the stadium and led the introduction of The Club’s theHub, a local regeneration project aimed at benefiting one of the mostdisadvantaged areas in Lincoln, as well as delivering a wide range ofcommunity activities, including the GOAL school holiday club.Business Advantages of Supporter Community Ownership 37

Lewes FC – Donations to SharesDuring the 2009/10 season Lewes FC got into serious financialtrouble and in January 2010 the club faced a winding up order.Although the former owners managed to pay off some of their debts,they were left with about £48,000 still outstanding.A group of six people, calling themselves Rooks125, started workingto try and take control of the club. They set up a community benefitsociety with the help of Supporters Direct and, along with a handfulof other people, managed to pay off enough of the tax bill to preventthe club from being wound up.The group then began the processDuring their first year in charge, of taking the club out of privatethey established a membership ownership, buying the club forscheme costing £1000 minimum to £1 in July 2010 and spliting thebuy a share in the society, which remaining debts between the newgenerated £100,000.entity and the old owners. The sixindividuals became the inauguralboard of Lewes Community FC Limited which bought 100% of theshares of Lewes 2000 FC Limited, which was the registered footballclub.Promoting the club as a community benefit society to localindividuals, they established a working capital fund. During their firstyear in charge, they established a membership scheme costing £1000minimum to buy a share in the society, which generated £100,000.Although not technically a donation, these contributions have in allbut name become so. From July 8th 2011 (the first anniversary oftheir takeover), membership will be open to all at a rate of £30 peryear and all shareholders – those that paid £1000 and those that willpay £30 – will have equal status on a one member, one share, onevote basis.AFC Telford United – £17,000 in Two WeeksWhen the financial troubles of Telford United became publicknowledge, the Telford United Independent Supporters’ Association(TUISA) became the focal point for many of the club’s fans as theway to help the club out of trouble.A Business Committee was established, comprising of people38 Supporters Direct Briefing Paper No.4

with specific skills – in areas such as finance, IT and marketing –that could be utilised when necessary. A lot of work was put intofundraising, with £17,000 raised in the space of a couple of weeks.‘It was clear that the support for Telford United was as passionate as everand that, if organised properly, the fans could have a significant voice in therunning of the club,’ said the supporters’ trust.The TUISA Business Committee got into contact with SupportersDirect and within a short space of time a Supporters’ Trust wasestablished, with the Business Committee as the interim Trust Board.Originally the supporters’ trust was set up with the aim of saving theold club, not creating a new one. However, it soon became apparentthat the financial commitments of the old club could not be metwithout the support of a wealthy backer, and the money being raisedthrough donations to TUISA would been sufficient to allow the clubto survive until the end of the following season if it had to servicethat level of debt. Although Telford United ceased to exist on 27thMay 2004, the donations helped to establish AFC Telford United,with the motto “Numquam Oblviscere” – Never Forget.Business Advantages of Supporter Community Ownership 39

10 Transparency, Openness and TrustKey Question:Does supporter community ownership help encourage greatertransparency in club governance, particularly in relation to finances?Top Three Findingsi) The overwhelming belief amongst those clubs we spoke to was that thereis increased transparency at supporter community owned clubs. Thiswas backed up by findings from the supporter survey.ii) More often than not, it was felt by club personnel that this wassomething that they should do as well as something which is built intothe community benefit society structure, i.e. something they have to do.iii) Transparency and openness were key factors in underpinning thecommitment of other strategic partners to the clubs.Under Community Benefit SocietyUnder Community Benefit Society rules, all supporters’ trust owned clubsrules, all supporters’ trust owned have to publish annual accounts whichclubs have to publish annualhave to be approved by members ataccounts which have to be approved their Annual General Meeting. Alongby members at their Annualwith the democratic election of theGeneral Meeting.Community Benefit Society board,this provides a level of scrutiny andrecourse for supporters as well as a level of public transparency which issometimes lacking at other clubs.Although situations vary depending on whether clubs are formed as aCommunity Benefit Society or if the trust owns a controlling stake, severalclubs demonstrated an additional level of commitment to transparencyand consultation with their members/owners beyond constitutionalrequirements.As discussed elsewhere in this report the level of openness has beena significant factor in relationship development, notably with publicauthorities.Developing trust between clubs and supporters is an important businessadvantage and can result in better financial performance, lower transaction40 Supporters Direct Briefing Paper No.4

costs and the additional ‘buy in’ of customers and partners referred to inother sections of this report – although this is difficult to quantify.Supporter SurveyWe asked questions about fans’ relationship with their clubs including howopen they felt their club was and the levels of trust they felt there werebetween supporters and clubs.Openness● 69% of all respondents believe that their club is open and transparentabout what is happening off the field.● For supporters of community owned clubs, this figure rose to 72.5%,whereas it fell to 56% of respondents who support other clubs.● 89% of FCUM fans felt their club was open and transparent aboutwhat’s happening off the field.● 63% of Lincoln City fans did not believe their club is open andtransparent about off-field events.TrustWe wanted to know about how supporters felt about trust between theclub and supporters and asked which of a series of statements were mostaccurate 12 .● 58% of respondents felt there was a high level of trust betweenthemselves and their club● On average, this figure was 63% amongst supporter community clubs,but fell to 38% amongst supporters of other clubs.Brentford – One BrentfordBrian Burgess at Brentford FC believes that they ‘absolutely have tobe more open’ with supporters because they are a community-ownedclub. Annual accounts are published in full on the website and, whilstclub board minutes are not published, the trust has 3 people on theboard to provide scrutiny and feedback to the trust. Burgess says thatwhen they first took over the club, there was a lot of suspicion and12 These were: ‘There is a low level of trust between me and the club’; ‘There is a mediumlevel of trust between me and the club’; ‘There is a high level of trust between me and theclub’; and ‘Don’t know’.Business Advantages of Supporter Community Ownership 41

anger about supposed secrecy in the football club board. Now, afterfive years in charge, levels of supporter trust are much higher.Brentford also run an initiative called ‘One Brentford’ which gets allthe different parts of the club together – the Community Sports Trust,the Learning Zone, the Football Club, Bees United and BrentfordIndependent Association of Supporters – with the aim of gettingall parties to see themselves as ‘one family’, where previously theyviewed each other with suspicion.AFC Telford United – Public AccountabilityAlthough it is an acknowledged added burden to workloads, AFCTelford United publishes its accounts on an annual basis to supportersand these are made available on the club’s website, with a detailedbreakdown published in the local press. Carter says that:‘It’s about having a sense of duty and part of that is about runningtransparent processes for whatever it is, be that recruiting a manager, acommercial manager etc. You need to have stakeholder involvement, which isbeneficial because it gives an outside eye on potential candidates and it createsa transparent process. That’s just part of being a community owned footballclub, because essentially I have to stand up and justify any decisions to theowners. I wouldn’t want that to change and would be very uncomfortableif there was ever any suggestion that it may change. I think it’s refreshingbecause in football, how often are people appointed on a wink and ahandshake over a pint in the pub, because people know the owner or director?Community ownership gives us that edge in terms of transparency.’FC United – Beyond AccountingFor Andy Walsh, at FC United, transparency is an integral part ofwhat it means to be a community club and it involves much morethan providing financial details.‘The first community that any club should look to is the supporters and itsmembers. Then there are other communities to consider, such as the communityin which the club resides, the immediate neighbours; and then it’s looking outand seeing what the club can do in wider society and how the club can benefitthat. FC United’s experience is that if you go out and engage with widersociety, that will have a much greater benefit to the club in terms of the healthof the club, the sustainability of the club and also attracting new support, and42 Supporters Direct Briefing Paper No.4

goodwill within the wider community. Without that, FC United wouldn’t bewhere they are with the council, with other agencies, with sponsors etc.’He says that members know board members and staff are aroundand available on match day; that the manager and players areaccessible; that they’re all part of the same club. This makes the club‘permeable’ and provides a level of integration between supportersand board which, even at non league level often involves an artificialseparation.‘All too often, even in non league football, those that have the privilege of beinginvolved at the heart of the club, forget that it is a club and see themselves asdifferent. Things need to be run in a business-like manner, but at the heart ofany sports club is the idea that everybody is in it together and that’s why theyare called clubs.’FC United hold an Annual GeneralMembers know that board members meeting and a formal Generaland staff are around and available Meeting each year which includeon match day; that the manager and a ‘warts and all’ discussion ofplayers are accessible; that they’re finances. However, since theyall part of the same club.have been developing plans fortheir own ground, they have heldat least one other members’ meeting per year to keep fans updatedwhich attracts over 300 members. In addition the club has runseveral surveys of fans and involves them in the ground developmentconsultation process.Business Advantages of Supporter Community Ownership 43

11 Supporter SatisfactionKey questionDoes community supporter ownership increase supportersatisfaction?Key Findings● In all areas, supporters of supporter community owned clubs tended tobe more satisfied than supporters of other clubs, although the variance incategories of ‘overall off the pitch’ and ‘overall on the pitch’ was slim.● The variance in satisfaction with the club’s customer-facing operationswas highest in favour of supporter community owned clubs in terms ofmembership, consultation and merchandise.● However, we must be aware of the ‘health warning’ on these statisticsbecause of the variance in response rates, the self selection nature of thequestionnaire and particularly low response rates for some clubs.In our supporter survey we asked fans to rate how satisfied they were with arange of areas of club operation. These were:● Overall – off the pitch● Overall – on the pitch● Club Operations:– Ticket Office– Membership– Merchandise– Supporter consultation– Match day /atmosphereWe take each of these in turn in the sections below.Average Satisfaction FiguresUsing responses we were able to score the average response from supportercommunity owned clubs and others 13 . Below we provide a table of theaverage score of responses from all the supporter community owned clubsas well as all the other clubs.13 Scores were based on the following responses: very satisfied (5); satisfied (4); neithersatisfied nor unsatisfied (3); unsatisfied (2) and very unsatisfied (1).44 Supporters Direct Briefing Paper No.4

Category Average Score of Average Score SCO VarianceSupporter Owned of Other Clubs Above Other ClubsCommunity ClubsOff-pitchsatisfaction 4.3 4.0 +0.3On-pitchsatisfaction 4.1 3.9 +0.2Ticket Office 4.1 3.9 +0.2MembershipScheme 4.3 3.6 +0.7Merchandise 3.9 3.3 +0.6SupporterConsultation 4.1 3.5 +0.6The stated caveats about reliability notwithstanding, we can see fromthis analysis that in every category supporter community owned clubsscored higher than others. In some areas where you would expect higherperformance from supporter community owned clubs – supporterconsultation and membership for instance – the variance in favour ofsupporter community owned clubs was indeed highest. However, in others,this variance was perhaps more surprising (merchandise at +0.6 and offpitch satisfaction at +0.3).i) Performance OFF the PitchWe asked supporters to rate their satisfaction about their club’s performanceoff the pitch.● An average of 79% of all respondents were either satisfied or verysatisfied with the performance of their club off the pitch.● This rose to 82% amongst supporter community owned clubs.ii) Performance ON the PitchSupporters were asked to rate their satisfaction about their club’sperformance off the pitch.● 75% of respondents were either satisfied or very satisfied with theperformance of their club on the pitch.● This rose to 78% amongst supporter community owned clubs.● Football being what it is, as an objective measure this is of coursesusceptible to the vagaries of football perforamce – although a stand outBusiness Advantages of Supporter Community Ownership 45

figure was 86% of Halifax Town fans, who were very satisfied with theirclub’s on-pitch performance, this is perhaps unsurprising in a promotionwinningseason (the survey was conducted before AFC Wimbledon’spromotion).iii) Ticket OfficeSupporters rated how satisfied they were with their club’s ticket officeoperation.● 71% of respondents were either satisfied or very satisfied with their club’sticket office.● 74% of respondents from supporter community clubs were eithersatisfied or very satisfied, compared with 58% of others.iv) Membership SchemeIn relation to satisfaction with their club’s membership scheme:● 71% of all respondents were either satisfied or very satisfied with theirmembership scheme● 78% of supporter community owned clubs were either satisfied or verysatisfied compared with 42% of others.● 84% of FCUM fans were very satisfied with their membership schemealthough as one commented, membership was ‘actually an ownershipscheme’.v) MerchandiseMerchandising also demonstrated greater satisfaction amongst supportercommunity owned clubs.● 62% of all respondents were either satisfied or very satisfied with theirclub’s merchandise● 66% of supporter community clubs compared with 43% of others weresatisfied or very satisfied with their club’s merchandisevi) Supporter ConsultationIn relation to satisfaction with supporter consultation:● 67% of all respondents were either satisfied or very satisfied withsupporter consultation at their club.46 Supporters Direct Briefing Paper No.4

● 73% of respondents from supporter community owned clubs comparedwith 46% of others were either satisfied or very satisfied with theirsupporter consultationvii) Match day AtmosphereFinally, we asked supporters what their opinions of their match day were, interms of the atmosphere and efforts the clubs went to encourage this. Thecomments we asked them to rate were:● The atmosphere is poor and the club do little to help improve it● The atmosphere is poor despite the club trying to improve it● The atmosphere is OK but the club don’t do much to help improve it● The atmosphere is OK and the club have tried to help improve it● The atmosphere is great despite the club● The atmosphere is great and the club help fans in creating this● I don’t know / don’t careHighlights:● 47% of respondents said that the atmosphere at the match is great andthat the club helps fans to create this● This figure rose to 52% of supporter community club respondents, butwas only 25% amongst supporters of other clubs.● FCUM scored highest with 89% of fans feeling that the matchatmosphere was great and that the club helped to create this.Business Advantages of Supporter Community Ownership 47

12 ConclusionsThe aim of this briefing paper is to provide supporters’ trusts as well as theirpartners and potential partners with evidence that supports the businesscase for supporter ownership. Both qualitative and quantitative evidencehas been presented which outlines a number of areas of business benefit forsupporter community ownership of football clubs.In several areas there are some fairly clear messages:Sustainable Strategic RelationshipsIt is clear that supporter community ownership creates long term, deepand sustainable partnerships with some key strategic partners. This isespecially so between clubs and local authorities, where the communitybenefit objectives of supporter community owned clubs can align closelyto the public benefit objectives of local authorities, other public bodiesand charitable, voluntary and community organisations. This can deliver arange of business benefits, from help with development of new facilities toassistance in saving club assets such as their ground.SponsorshipFrom the experience of supporter community owned clubs, we can alsosee an increasing desire of sponsors to be associated with the principlesFrom the experience of supportercommunity owned clubs, we canalso see an increasing desire ofsponsors to be associated with theprinciples of supporter communityownership as well as the communitybenefit obligations inherentin community benefit societyownership.Finance and Incomeof supporter community ownershipas well as the community benefitobligations inherent in communitybenefit society ownership. This alsoassists with development of localbusiness relationships; and marketingclubs as supporter owned – ‘the cooperativeadded value’ – was felt to bea major advantage, especially in thewider context of football’s corporatedevelopment.Although supporter community owned clubs face an uphill struggle due tothe ability of other clubs to spend beyond their means, they do have someadvantages, notably in relation to raising finance. As explored in moredetail in Supporters Direct’s Briefing Paper No.3 on financing supporter48 Supporters Direct Briefing Paper No.4

community ownership, the community benefit society structure offers anumber of routes to finance that other clubs cannot exploit. Furthermore,the additional buy-in of fans means that supporters’ trusts and supportercommunity owned clubs can also generate significant sums in donations,something that is also explored more fully in Briefing Paper No.3.VolunteeringIt was very notable that out of over 1700 supporters, the vast majority ofthose who volunteered were at supporter community owned clubs. Overallvolunteering levels remain very low, however, and this is an area that allfootball clubs should look to develop. This would benefit their own businessas well as involving supporters more in the day to day running of clubs,something that can help build understanding and trust as well as skills.ResilienceThere is some evidence that those who run supporter community ownedclubs feel that they get given more leeway by supporters because of theirownership – attendances being maintained when the team is performingpoorly for instance. It is extremely difficult to make any hard and fast orquantified generalisations about this in comparison to other clubs, however,as club’s circumstances are so subjective to particular conditions.This ‘resilience’ is in part reliant on greater trust, openness and transparencyin the running of supporter community owned clubs, something thatunderpins a better regulation of football ‘from below’ referred to inSupporters Direct’s other briefing papers.Supporter SatisfactionAlthough the statistics are not wholly reliable and the survey was not arepresentative sample, there were key differences between the satisfactionlevels of supporters of supporter community owned clubs and others inalmost every other area, which at the very least suggests improved businesspractice in relation to supporters at those clubs.The testimony from those that are involved in running supportercommunity owned football clubs about the business benefits they feel thatthey get reflects other research commissioned by Supporters Direct. Thisis particularly notable in relation to the Social and Community Value ofFootball work, which highlighted the importance to long term strategicrelationships of supporter community ownership as well as the additionalbuy-in from various local communities.Business Advantages of Supporter Community Ownership 49

50 Supporters Direct Briefing Paper No.4

The Supporters Direct Briefing PapersIn 2011 Supporters Direct launch four Briefing Papers prepared by Substance inconjunction with a number of partners, including Cobbetts LLP, Salford University,Manchester Metropolitan University and Westminster University. The papers are:l Briefing Paper 1: Developing Public Policy to Encourage Supporter CommunityOwnership in Footballl Briefing Paper 2: Developing Football Regulation to Encourage SupporterCommunity Ownership in Footballl Briefing Paper 3: Financing Supporter Community Ownership in Footballl Briefing Paper 4: The Business Advantages of Supporter Community Ownershipin FootballAuthorsThis paper was prepared by Substance (www.substance.coop) and written byDr. Adam Brown and Fiona McGee.For further information aboutSupporters Direct’s work andcampaigns, please contact:Tom HallHead of Policy and DevelopmentSupporters Direct3rd FloorVictoria HouseBloomsbury SquareLondon WC1B 4SE020 7273 1657tom.hall@supporters-direct.coopwww.supporters-direct.coopFor further information aboutSubstance, please contact:Adam BrownSubstance3rd FloorFourways HouseHilton StreetManchester M1 2EJ0161 244 5418info@substance.coopwww.substance.coopPrinted on 100% post-consumer waste recycled paper, using Bio vegetable oil based inksDesign and print www.calverts.coop

Supporters Direct3rd Floor, Victoria HouseBloomsbury SquareLondon WC1B 4SETel: 020 7273 1595www.supporters-direct.coop