Fans funding for financial situation

[craig 5,199]

 

I've had one unsolicited communication from the Trust in the last year, asking if I would sign over my vote for the AGM. When I refused to do so they asked if I would like my life membership fee returned. I declined. Otherwise, nada.

 

You should feel honoured. I never got such a communication nor offer. Strange reaction indeed, especially when they have no obligation to do so.

[Bluedell 5,356]

I think I've had 6 emails since the start of the season, including the one MF refers to. Didn't reply to it though.

[Big Spliff 0]

Strange reaction indeed, especially when they have no obligation to do so.

 

I was thinking that!

[Zappa 0]

Hi again Big Spliff,

 

you've made some excellent points & you might well have the fundamental structure of a workable plan/proposition, but there's some points that need clarifying as well because they're somewhat confusing. I'll try to highlight them via a few quotes....

 

Our 'Execs' (aside from putting in say �£5m each for partly-emotional reasons) must also have a financial motivation. Any group must be able to run the business as an inherently profitible one, which i believe is possible. The club needs to be restructured early on, so that waste is eliminated and revenue maximised.

Ok, that reads as though these 'Execs' are actually the 'consortium', the 'group' of investors who will buy the club & essentially run it, otherwise there would be no necessity for them to have the financial motivation to run the business as a profitable one, which any individual investing say �£5m most certainly would.

 

Management Team

Our ‘Execs’ identify and hire a management team to run the club. Quality professionals on say Ã?£150k per year are appointed to run Marketing, Operations, Finance, HR, Communications, Development etc. A CEO is appointed, say Ã?£300k. Big hitters. The best people for the job.

This makes perfect sense, although I'm pretty sure that quality management could be attracted with slightly lower salaries than that, which would definitely help the new venture's chances of success financially.

 

Our ‘Execs’ stand for confirmation/election, and agree to be re-elected on a 3 or 4 year cycle. They are responsible for the performance of the management team they appoint so they can hire and fire. They stand or fall based on re-election by the wider membership, who will judge based on performance over the period. The wider membership may vote in keeping with their proportional investment. Votes are cast anonymously on-line, or by postal proxy.

This is where you've lost me altogether. If the 'Execs' are the main group of investors with the financial motivation to run the club as a profitable business, why would they 'stand for confirmation/election, and agree to be re-elected on a 3 or 4 year cycle'? What am I missing here?

 

Some of your ideas & suggestions for increasing the revenue at Ibrox are excellent & if even a few of them were seriously planned & implemented there could be a serious increase in income. The one thing to remember though, is that any development of new or upgrading of old facilities, costs money & obviously the scale of the cost is in line with the scale of the development.

 

Mark

[Big Spliff 0]

Mark, thanks for feedback etc. I knew it was a bit of a rant and could have been clearer!

 

Here's what I meant;

 

Let's imagine there are 5,000 'members'. The members vote an Execitive Board, which would initially presumably be led or largely constituted by the small group who would put in �£5m each. From the exec board, one is elected (let's say a senior partner) to lead the group including hiring and firing the entire operational/professional services management team. Everyone is a member, whether you put in �£5m or �£1k. All members get a vote. The Exec are given the first 3/4 years uncontested in return for investing in the club. None significantly outweighs the other or has too much control.

 

In the event that things go badly and an exec member is voted off after 3/4 years, they are entitled to remain as a member/owner, albeit not as an Exec. If they wish to sell their shares, they do so - they do not just take their money with them, as they've already put it into the club in the form of equity.

 

In terms of financial incentives for these guys, what I meant was a) entering into something which they believe will not simply be loss-making, hence the need for a coherent plan/business model to be established and implemented from the word go; b) a range of indirect 'benefits' such as use of facilities, resources etc, ; and c) the possibility that their membership may actually increase in value (albeit possibly with certain caps in place possibly linked to RPI or FTSE or whatever), on the back of a successful business emerging. Ideally, all monies stay in the club, but some might want at least small returns which might be reasonable in the circumstances (looking gift-horses in the mouth etc)

 

Thanks again for asking, I unreservedly welcome the highlighting of any flaws or suggestions to build around and evolve a model like this into something which seems plausible. At the same time I am totally open to binning this for a better solution if there is one. I hope I've cleared things up a little?

[maineflyer 0]

You should feel honoured. I never got such a communication nor offer. Strange reaction indeed, especially when they have no obligation to do so.

 

I think it may have been in special recognition of my persistence in pursuing certain information.

 

...... or the fact I told them I didn't have confidence in their ability to use it wisely.

Edited January 20, 2009 by maineflyer

[Big Spliff 0]

I think it may have been in special recognition of my persistence in pursuing certain information.

 

...... or the fact I told them I didn't have confidence in their ability to use it wisely.

 

Christ you must be some f*cking pain in the arse for them to offer you your money back just so you'll go away!!!!!

[maineflyer 0]

Christ you must be some f*cking pain in the arse for them to offer you your money back just so you'll go away!!!!!

 

Well it's not for the want of trying.:devil: Of course if their track record is anything to go by, I'd still be waiting for the money.

 

What pissed me off was then seeing the RST boast that no life member had ever asked for his money back. Drat, chance missed.

[Zappa 0]

I hope I've cleared things up a little?

 

Yeh, definitely! That makes a lot more sense to me now, so thanks for the clarification.

 

One major concern that I have with your proposal is that any small group of investors who were to invest (for example) �£5m each in such a venture would almost certainly want either:-

 

a) Their full �£5m returned within their initial 3/4 year spell as an 'Exec' while they had a major hand in the running of the business.

 

or

 

b) To be indefinitely on the Exec board with a major hand in the running of the business until their investment was returned.

 

There's a small chance that an individual investor might want to be only that & leave the running of the business to the others - in other words, someone might be willing to take a punt on it without the hassle of being directly involved, but such in investor would possibly also be the most unlikely to show interest in such a venture.

 

I'm no business or financial expert though, so I stand corrected if any of these assumptions are wrong.

 

Mark

[Big Spliff 0]

Yeh, definitely! That makes a lot more sense to me now, so thanks for the clarification.

 

One major concern that I have with your proposal is that any small group of investors who were to invest (for example) �£5m each in such a venture would almost certainly want either:-

 

a) Their full �£5m returned within their initial 3/4 year spell as an 'Exec' while they had a major hand in the running of the business.

 

or

 

b) To be indefinitely on the Exec board with a major hand in the running of the business until their investment was returned.

 

There's a small chance that an individual investor might want to be only that & leave the running of the business to the others - in other words, someone might be willing to take a punt on it without the hassle of being directly involved, but such in investor would possibly also be the most unlikely to show interest in such a venture.

 

I'm no business or financial expert though, so I stand corrected if any of these assumptions are wrong.

 

Mark

 

I take your points (and I wouldnt say you are wrong at all), and anyway I couldnt begin to guess what anybody with �£5m to invest in Rangers would want back!

 

In this model though, your �£5m gives you;

 

• the opportunity to invest in the new dawn of a "new club".
  
• to be an executive member in the new executive board.
  
• the chance to get involved and share risk with fellow high-investors
  
• the chance to be the senior partner, who effectively pulls all the big strings. (there's lots of cudos, publicity, status in there without room for dictatorship)

 

• the opportunity to make reasonable % profits providing financial preformance criteria is met.
  
• the opportunity to re-sell your equity on the market at at time, at no loss if the club is run 'correctly'

 

If there is an underlying business model, then I believe the club can run in a way which means it simply does not lose money. That being the case the downside risk would be relatively limited - all other things being equal. Anybody putting in �£5m would rightly want to be clear about that before going ahead, and be prepared to put in some time to ensure thats exactly what happens, at the same time as helping the club to prosper. For very high net-worthers, they are not staking 10's or 100's of millions. �£5m is fairly modest sum to some of the people we might be looking to attract, and we only need a handful. Remember also that the Exec Board does not run the club day-to-day. The professional management team they appoint do that - experts in their fields. Its more of a supervisory board if you like.

 

At the end of the day though, its not a money-making exercise - people with �£3m-�£5m 'to tie up for a few years' can find plenty of other ways to do that. This fact may be a killer for some, but you never know. The concept may not even need �£5m people. If �£1m makes you top-tier, then that's all fine too.

Edited January 20, 2009 by Big Spliff