Hair Today, Gone Tomorrow

Wednesday, 6 November 2002, 0:01
13 mins read

Why Swansea City AFC is where it is today, and what can we do as fans.

Introducution

If you look at the history of the Swans over the past half-century it is one of steady decline, except for the brief period Toshack glory years. We now know that the rapid rise to the top was built on unsound financial foundations and was destined to end in the equally rapid subsequent drop.

When I started supporting Swansea Town as a boy, we were a well established 2nd Division club (equivalent to today’s 1st Division), with crowds in the top half of those for the division. We never needed to purchase many players as the production line of local talent turned out the bulk of the team. Local players who were able to hold their own in what would now be the 1st Division. We even regularly sold our best players, and as a result never quite made it to the highest league. It is difficult enough to determine the flow of money in and out of the club even a year ago, during the Lewis/Petty era, so it is nigh on impossible to get to the bottom of what went on decades ago. Yet the suspicion must remain that the club, was to put it charitably, not run well financially.

Once the 17 year 2nd Division spell came to an end in the mid 1960s, the rot set in with a downward spiral of out league status, lower crowds and income through successive owners. Now we have reached a low point in our 90 year league status, and it is no surprise that this comes after the Ninth Floor, Lewis and Petty ownership disasters. At least now with a group of owners who we all know to be upright citizens, and real supporters, the financial situation in the club is becoming stabilised.

The ordinary fans could do little to influence the financial management of the club over these 50 years, as we could never achieve even part legal ownership of the club. Shares in the club we largely held by the current owners, whoever they were, and were never offered for sale to the man or woman in the street. McClure was the first to talk about a share issue to the fans in 2000, but this never came about. The initiation of Supporters Direct and the Supporters Trust they developed, gave the first true possibility of Jack & Jill Public owning any part of the legal entity, the company which owns and runs the Swans.

The Genesis of Swansea City Supporters Trust.

I was one of the eight fans who in May 2001 met in Port Talbot, with Dave Boyle of Supporters Direct. We started the move to set up the Swansea City Supporters Trust with the first public meeting in the Brangwyn Hall in July 2001. At the meeting and whenever I could get the message across in radio and TV interviews, I tried to keep a simple message that the objective of the Trust would be to gain part ownership of the club, and increase that ownership over years or decades until we the fans owned a majority interest or even eventually, total ownership of the Swans. It may have seemed a pipe dream at the time, as no matter how much money we raised, there was always the distinct possibility that the owners would not be willing to sell any part of their ownership of the club. Several times doubters correctly pointed put there has to be a willing seller as well as a willing buyer to conduct a sale.

As it turned out the opportunity for the Trust to gain part ownership came about much sooner than anyone could have predicted due to the disastrous Lewis and Petty periods, and the brave move to purchase the club by the consortium headed by (Sir) Mel Nurse. Before a year had elapsed since that original meeting, the Trust had raised £50,000 and purchased enough shares to have a seat on the board.

This is, of course, a great success, and the many people who picked up the leadership of the Trust, worked extremely hard to get to the current position. Yet, I feel that the Trust has lost its way and needs to re-focus on the original, and in my mind, most important objective, i.e. to own as much of the club as it can as quickly as is humanly possible. The cynic may say: “What is the need to own more than the Trust now does? We have a seat on the board and the other owners seem a decent lot”.

Well my answer is to look at the sort of people who own football clubs, and ask how they manage the clubs, what they do with the income and how they treat the fans. From Manchester United and Newcastle at the top to our fellow strugglers, most of the people who own clubs do so for their own financial gain, and think of the fans as low-lives, who are stupid enough to take everything which is dealt out to them with little protest. The fans are like drug addicts – they know they are being ripped off and abused, but they need the fix of supporting the club they love.

Just because the current owners of Swansea City are a benevolent lot, does not guarantee that this situation will remain. In fact the history of our club and others would indicate that this is unlikely to be true unless we, the fans, do something about it. At the first fans forum I asked about whether there should be a rule introduced into in the constitution of the club that no one person or business could own more than say, 10% or the share capital. David Morgan, answered, with a question: “What if Terry Matthews (the owner of the Celtic Manor golf resort, and reportedly the richest man in Wales) wanted to buy the club. Wouldn’t you want us to sell it to him”. He did not wait for an answer – to him it was a so obvious that any sane person would say “Yes, yes, yes”. In the current situation, where the club is reported to be losing thousands of pounds a week, and the very future of the club is in doubt, both on and off the field, I think most of us would be glad to accept a lifeline from almost anyone. However, there are inherent dangers in anyone person owning all or most of the club. Now I don’t know Terry Matthews from Adam and he might be the nicest person on God’s earth, but the truth is that he, for all his wealth, is mortal. One day he will die and his estate will pass onto his wife or children – who is to know what sort of people they are and perhaps equally importantly, what they would want to do with a football club. Quite likely they would want to sell it – up steps another Lewis or Petty and we are back in the shit again.

Long Term Security

I would preface this section by saying that the club is not now in a stable financial situation, due to the past years, and needs the injection of cash from the current board and their financial backers, just to survive. However, in the long term, the club has to balance income and expenditure. The potential of the club has been talked about many times, mainly due to being the only league club in the catchment area of west of Bridgend to south of Aberystwyth – all within easy travel distance of Swansea. Most of the income streams can be proportional to the gates, so there is no reason why the Swans cannot achieve the 6,000 – 8,000 crowd which equates to 2nd Division stability, or the 12,000 plus required for the 1st Division (depending, of course, on Morfa eventually going ahead). Therefore, if we do get through the current crisis, the club can and must become financially stable, based on a proper business model, without requiring input of funds from wealthy benefactors.

As a fan base we need to get away from the feeling that we need to rely on the goodwill of the rich mill-owners in the big house on the hill, and have the confidence in our own ability to organise our own lives. (This goes for more than football, I think).

The only long term security that the club has is to be owned by the fans through a Supporters Trust, or similar co-operative. Otherwise we are always hoping that the majority owners care as much about the club as do the current board and backers.

Even part ownership of the club by the fans can be a defence against another Petty or Lewis taking over. And the higher the percentage ownership by the fans the better is this defence. McClure, without any opposition, could hand over 100% ownership to Lewis, and Lewis similarly to Petty, without any opposition. Even part ownership by the fans makes this process much less clean (bad choice of word perhaps) for the prospective dubious new owner. Many would rather walk away and prey on the another club rather than face a battle from a hostile fanbase who have part ownership of the club. While it would be nice for the fans to own 100% of the shares, or even have a majority holding of 50% plus, a controlling influence can be much less than that. Doug Ellis reportedly only owns about 30% of Aston Villa shares, but he is able to run the club as a personal fiefdom, because all the other shares are owned in smaller lots by persons and organisations, who have little common interest in co-operating to take control themselves. The message for Swans fans is that every increase if part ownership of the club gives us added security against another Lewis or Petty. Every £100 invested in shares increases our ownership by .01% – the “Church roof thermometer could move from 5.1% to 5.2% for every thousand pound.

We need to also recognise that the opportunity to purchase shares in the club may not last forever, in fact a look as history would suggest that this may be a short period of opportunity. However the Trust has failed to get this message across to its members and non-member fans. It has spread its objectives too widely and has become side-tracked down other avenues – all worthwhile, but not vital. Arguments have taken place about whether some of the Trust funds could be diverted for other purposes, and time and energy has been dissipated on non-essential activity.

Actually, I believe the Trust has accumulated about £55,000 with an additional £10,000 worth of shares being generously donated by Richard Keen. So about £15,000 is left after the first £50,000 investment in shares. I believe that, to date, about £300,000 of the total nominal million pounds worth of shares have been purchased, so that the Trust owns 17% of the shares currently issued, but only 5% of the total a share value once fully issued. In reality, the amount of money accumulated by the Trust is poor. I would have thought that if the message had been clearly spelled out, a target of £150,000 would not have been unrealistic by now.

My message to the new Trust board members is to focus on the only task that is important in the long term – purchase of shares in the club. Get this message out to the fans, explain why it is so vital and that now is maybe a unique chance to purchase shares. Explain why we need to own the club ourselves. List the type of crooks who are attracted to football clubs both with examples from our history and the other members of the Premiership and Nationwide leagues. Fans need to feel that it is genuinely worthwhile to contribute more than just pin money, if they really love their club, then it should seen as much as a priority as buying that new pair of shoes or having a night out. Objective, time scales and milestones should be set for both money raised percentage of share ownership achieved. A church roof appeal type thermometer needs to be publicised in all Trust media outlets showing both progress and the targets.

Recommendations about how the Trust Board membership can be improved:

Background:

As Dave Boyle of Supporters Direct told us at several of the Trust meetings, the great strength of a Supporters Trust is that it can utilise, for free, the skills, knowledge, experience and enthusiasm of hundreds or even thousands of people. Some fans may be retired or temporarily out of work, and can contribute much time. Others will have busy work, family, sporting or social lives, but can put in some time – many such people will have current skills from their full time employment, which they can contribute, even for a few hours here and there. Of course, others may not wish to participate actively, and can just give financial or moral support. However, the key is to actively encourage involvement from all these potential contributors. This means a willingness to welcome in new faces and take on new ideas. Inherent in the success of a Supporters Trust is probably a much greater turnover of the officers of a Trust than would be usual in a conventional business. Continuity can be maintained by having some overlap of Trust Board Members, but if this turn-over is handled properly, those who stand down from Trust Board membership will still be willing to stay involved and contribute. Some people with the greatest skills to offer may not the available time to be involved as Trust Board members, but would be willing to contribute their abilities if they felt they were valued as equal members and not excluded by a self-perpetuating clique of Trust Board members.

Recommendations:

1. Much more diversity in background and opinion is now required to take the Trust forward. Half the current board numbers could stand down now, half can continue for reasons of continuity. Endeavour to obtain board members with the skill gaps outlined below. Other than these specialist skills, try to get a wider background in terms of, say, geography (e.g. someone from West Wales), age (someone younger). Certainly, no members of the same family should serve on the board at the same time. Try to get as much turnover of Board Members as is practical to widen the identification of members with the board and get in new ideas and skills.

2. Skill gaps:

a)Selling Skills

Much of the job of the Trust Board is to convince fans to join and to then convince members to contribute their hard earned cash to Trust funds. There is a very good selling story there, in terms of survival of the club in the short and long term. But the story is not being “sold”. Even a list by member of contributions to date would encourage members to contribute more – this is seen, for example, in a much smaller scale, in the list of contributions to player sponsorship in both of the Swans websites. Over the past few weeks there have been suggestions for raising cash from fans on both of the two main Swans websites, but a total silence from the Trust. All that seems to have come out is yet another raffle. Many sales people are trained in all the skills required. Try to enlist such a person.

b)Project Management Skills

In one recent posting the Trust Board quoted the nine “Objects of the Society” from the Model Rules of the Trust.The Model Rules of the Swansea City Supporters Trust are effectively its constitution. This is a legal document set in place at the birth of a Trust, which could last, largely unchanged, for maybe decades; hence it is all-encompassing. The document is also quite expensive to alter – another reason for making sure it has everything in it that could possibly be needed. Quite correctly the Trust Board point out that the Model Rules/Constitution are very much based on the template provided by Supporters Direct, and are probably very similar to those of most of the Supporters Trusts in place in many clubs throughout the UK. Different clubs face different problems and opportunities, and even within one club the opportunities for the relevant Trust will vary over time.

This constitution is therefore different from the objectives of a Trust which will change as time passes, and may be directed to different parts of the excellent ideas listed in the Model Rules. Our Trust has only been in existence for a year, so to try to tackle everything at the same time is not sensible.

Project Management involves looking at the objectives in a long , medium and short term. Determining what human and financial resources are available. Matching these resources against achievable objectives. Setting schedules, time scales and quantifiable and measurable targets. Monitoring and publishing achievements against these targets. For instance, with the Swansea City Supporters Trust a 10 year plan might involve setting some fairly general objectives against each of the “Objects of the Society”. A 5 year plan might have some more quantifiable objectives against some parts of each of these Objects and more subjective aims against other parts. A one year plan would pick on just a few vital aspects of some Objects and setting concrete targets.

Not having these procedures in place means that success cannot be judged and performance cannot be improved.

c) Accountancy Skills

The ability is needed to be able to interpret the financial situation in the club from whatever evidence is available, and plan the Trust business, based on this position. As an example just because the club, as a Ltd company,has an authorised capital of £1 million, with issued at the moment being in the region of £300,000, does not mean that the £50,000 which the Trust contributed could not purchase, say £100,000 of share capital. The current real value of the club is probably zero. Accountancy is not just book-keeping.

d)Communication Skills

Trust Communications, both internally to members and externally to the media have been handled to date by Trust Board members who have little experience and no training. And it shows. There are supposed to be more students in British Universities studying various Media course than any other subject, yet jobs in newspapers, TV and radio and in corporate communications are like gold dust. An attempt could be made to find a young person , recently graduated with a Media degree to take on the communications duties of the Trust, as a Trust Board member . What a good start for a career in the Media to have this on a C.V. – much better than the alternative that many such graduates face, which involves flipping burgers or serving at a bar. There are schemes in place to fund such “apprenticeships”, e.g. from the NUJ.

References

Recommended reading for all Trust members: David Conn’s book “The Football Business” (ISBN 1-84018-101-X), the Supporters Direct Book entitled “The Changing Face of the Football Business” (ISBN 0-7146-81636). The Supporters Direct mailing list is also a valuable source of education on the business of football. This literature needs to be summarised and the information contained made available in bite size packages to Swans fans. As much as anything else, the Trust should act as an educational conduit to aid the average fan’s understanding of the business and finances of football (much in the same way as many unions provide educational support to their members). As a group of thousands of fans we can achieve much – we can achieve so much more if we understand the business of football as well as we follow the tactics of the game.

Images courtesy of Getty Images, Athena Picture Agency and Swansea City Football Club.
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