Trust Open Letter

An Open Letter To Swansea City Supporters

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You can download a copy of the letter here

It has been over five years since the Supporters Trust played a huge role in the ousting of Tony Petty and the return of the club to the fans. It is an achievement of which we are rightly proud and we are also proud of the part that we have played in the club moving forward from that position to the position of today, where we challenge for promotion to the Championship in front of five figure crowds at our new stadium. Some progress in a five year period ! Our contribution has been sizeable in terms of input via our two Supporter Directors during that time, as well as organisation of numerous events that have brought the club closer to its supporters.

The club is now unrecognisable from the one that stood in January 2002 and through the work of the shareholders and directors (of which we are an integral part), we have a club that many look up to as a benchmark of what can be achieved and what is possible even when it seems all is lost, as it probably did back in late 2001. It hasn’t all been plain sailing of course – there was the flirt with the Conference in 2003 and further financial worries in the early years of the current set up.

The club was nursed through those financial worries by the generosity of some of our shareholders who loaned the club money to meet its running costs and ensure a continuation of trade. Perhaps not huge sums, but not loose change either, and as a Trust we are extremely grateful to those that dug deep in their pockets to help sustain our club. Now, as a result of the agreement of all shareholders, these loans are to be converted into shares in Swansea City. As a Trust, we feel it only right to agree that the sums introduced in these circumstances be recognised as investment monies.

All other shareholders have been given the chance to increase their stakes accordingly and as a Supporters Trust we are no different. We have been given the opportunity to double our existing shareholding of £100,000 and because of the nature of the make up of our organisation we have been given an extra period to raise this money. We have a figure of £60,000 already put aside for this purpose and, acting on the mandate given to us by our members, we will be handing this to the club in return for shares. That means a minimum stake of 16% in Swansea City Football Club, and if we can raise a further £40,000, then that shareholding will increase to 20%. Owned by us, the fans.

In addition, we have given our backing, along with that of the other shareholders, to increase the authorised share capital of the club from £1 million to £2 million. This does not mean an immediate injection of £1 million into the club, but it means that the club can issue extra shares to that value at a time when the business needs the investment. Again, as a Trust, we will be given the chance each and every time to subscribe to some of these shares to maintain our shareholding percentage. It is definitely worth remembering here that we will be given longer timescales, because of the nature of our make up, to raise any additional funds on further share issues.

And I guess it is now that we have to pass things over to you, as Supporters, to make your decisions as to what we should do from here on in. Let me share some facts with you –

· Irrespective of whether we invest above the £60,000 we immediately intend to deposit, our director’s place on the club board is not in jeopardy. The club board operates on crucial decisions on a ‘one vote per director’ basis – certain issues outside of the day to day running of the club are influenced by percentage ownerships. All shareholders with a 5% shareholding have been invited to have a director on the board. Even if, at some stage in the future, our shareholding dropped below 5% then we would retain a directors position. Please never underestimate the value of this, the Director is involved in ALL major decisions the club undertakes.

· It is a magnificent testament to the work of the current directors, including the Trust director, that successful businessmen are prepared to invest further into a club that less than four years ago could have become a non league club.

· The Supporters Trust are committed to ensuring that safeguards are put in place to ensure that all monies are used for the greater good of the football club, and will advocate the preparation of detailed financial plans in respect of all future investment proposals. Success on the pitch is something we all want to share, but at no stage must the club’s future be gambled on chasing that dream.

· The release of a further £1m of share capital will allow the club to continue its successful development, and increasing the share capital is a preferred option to taking on bank borrowings.

· Every time the club board vote to release more shares, we will be given the option to subscribe to that share issue.

The Supporters Trust has been given a clear message in the past by its supporters that it should be concentrating in the main on its shareholding within the club. This is something that is only achieved by further investment within the Trust, which in turn goes to the club.

It is now time to decide, as supporters, whether you want the shareholding to remain constant or whether you are prepared to let that figure reduce as other shareholders gain larger shareholdings. It’s a question that only you can answer for yourself – on this subject I really cannot influence you.

I now ask you to consider the requirements of us maintaining our shareholding –

SHORT TERM

£40,000 investment in the Trust. We currently have several events planned and with membership fees for next season then maybe we could secure £10-£20,000 of that. That leaves £20-30,000 to find, which can only come from increased memberships, lump sum donations or substantial savings on a regular monthly basis. If you want us to maintain our shareholding then please consider at least one of these three. Every little helps towards that target.

LONG TERM

We would envisage that further share issues will take place in the future. We therefore need to consider a turnover on Trust funds in excess of £100,000 per year. This will be achieved through membership fees, one off donations or regular donations into Trust coffers. Again, if you wish us to continue to buy shares within the club then please consider at least one of these three. In addition to these ideas we are also looking into the possibility of fans being able to bequeath money to the Trust – we will keep you informed on this front.

This is a crossroads for the Supporters Trust. We are firmly committed to play our part in moving the club forward and we intend to play a very big part in that progression. We are delighted to see our new director integrate seamlessly into the club and continue the work of his predecessor and we know that we are involved in every major decision that the club takes. We are also pleased to say again that the director position is not under any threat – short term or long term – and supporters should take comfort in that fact.

A larger shareholding gives us an increased chance to veto any future Tony Petty type characters who may eye up the club as a ‘cash cow’. Your Trust Board firmly supports the idea of maintaining the supporters shareholding as close to 20% as possible, as has been indicated by our current membership. Despite the influence that comes through our seat on the Board it is the shareholding that is of paramount importance in maintaining our influence in the long term. However, the ball is in your court as it is only through contributions and donations from our members that the Trust will be able to sustain its present level of shareholding.

I apologise for having gone into such detail but, as a Trust Board, we feel that it is essential that I do just that and paint as full a picture as possible as to where we stand, the future plans of the club, and where we can progress from here.

If you would like to discuss any of these issues then please call Stuart on 07910 358539, leave your details if it diverts to voicemail and he will ensure that we get in touch with you at the earliest opportunity.

I say one more time that I am extremely proud of the part that we have played in this club’s progression and the part that we will continue to play in its future development.

JACK ARMY!

Phil Sumbler Chairman, Swansea City Supporters Trust April 2007

You can visit the Trust web site by clicking here