Following the announcement on Saturday that Stephanie Booth is the preferred bidder for Wrexham Football Club and the Racecourse, Wrexham Supporters Trust felt it was timely to outline its position in relation to her bid and what we believe is required to make Wrexham FC sustainable in future.
WST has now met with Stephanie Booth on two occasions and whilst there is common ground, discussions are still at an early stage. In particular, we believe that there are three key areas which need exploring in more detail, namely:
- The current level of debt
- The proposed ownership model
- The proposed membership and shareholding model
We outline our views on each of these areas below:
The current level of debt
In her proposal distributed on Saturday, Mrs Booth estimates the current level of debt at £750,000. Wrexham Village has not yet shared the management accounts or due diligence reports with the WST, so the Trust is unable to substantiate this figure at present.
WSTs analysis of publicly available accounts up to June 2010 found that Wrexham FC had lost £3.5m in the period since exiting administration. Our analysis also found that Wrexham FC was spending twice its recurring operating income on overheads and playing budgets, which is completely unsustainable.
So whilst we are yet to see the management accounts or due diligence reports we do not expect them to show a more favourable position than anticipated.. We share Mrs Booths belief that costs need to be cut and that more revenue needs to be generated from the Racecourse Ground to make Wrexham FC more sustainable.
Stephanie Booths ownership model
We are pleased that Mrs Booth is considering a community-based model of ownership for Wrexham FC as we believe that the current holding group model has failed. We therefore share common ground in this respect. However, the devil is in the detail and we are yet to see any concrete proposals as to what this might entail.
During our two meetings, we understood that Mrs Booth was proposing to create a charitable trust, which would own the Racecourse Ground and a separate company which would own Wrexham FC. However, the advice we have received from Supporters Direct indicates that this would financially disadvantage Wrexham FC as the club would have to pay a commercial rent to the charity.
Wrexham Supporters Trust believes that it is critical to the future of Wrexham FC that the Racecourse Ground asset is protected and utilised for the purpose of generating as much revenue as possible for the football club. To this end Supporters Direct have indicated that a true community-based model should asset lock the Racecourse Ground to protect its status as a sports stadium
Supporters Direct has advised that an Industrial and Provident Society (IPS) or Community Interest Company (CIC) structure would enable us to appropriately protect the Racecourse Ground.We would welcome the opportunity to sit down and discuss the structure of any deal with Mrs Booth and her advisers in order to agree the most appropriate ownership model for Wrexham FC, the Racecourse Ground and Colliers Park.
Membership and Shareholding
Wrexham Supporters Trust shares Stephanie Booths view that a Wrexham FC membership scheme is key to generating additional revenue. However, we see Mrs Booths proposal as more akin to a retail loyalty card, which offers price benefits and deals rather than an inclusive model which would offer a member a real say in Wrexham FC.
We are currently taking advice from Supporters Direct on Stephanie Booths shareholding proposals, but have some concerns about the affordability of the scheme to the majority of fans who may not be able to afford Class A shares at £50,000, Class B shares at £10,000 or even Class C shares at £1000 for 10 x £100 shares. We would like to discuss this in more detail with Mrs Booth to understand the rationale behind this proposal.
WST membership is open to all fans at just £12 per annum and benefits from the principle of ¢‚¬Å“one member, one vote¢‚¬ regardless of the level of investment. Our preference to raise funds is to issue Community Shares, which would enable fans to invest up to £20,000 each, but retain the principle of ¢‚¬Å“one member, one vote¢‚¬. We would envisage all dividends being reinvested in Wrexham FC. This statement does not constitute an offer to the public to acquire shares.
Another benefit of Community Share schemes is that they are not regulated by the Financial Services Authority, which saves a lot of administrative costs in regard of the share issue.
Other interested parties and stakeholders
The door also remains open to all interested parties and other stakeholders to discuss Stephanie Booths proposals and indeed any other ideas. It is worth mentioning the very positive role Wrexham Council has played in facilitating meetings and providing advice to all parties. It is very clear that the Council has the interests of the club at heart.
Notes to editors
Please contact Wrexham Supporters Trust Secretary, Gavin Jones for further information on 07984 694796.
A review of Wrexham FCs publicly available accounts, a comparison with AFC Wimbledon and our proposals to return the club to financial sustainability is available in the slide deck attached HERE