Latest News - 29/12/2016
Announcement Re Club Ownership Structure
We are pleased to announce Annan Athletic will be conducting a consultation process around the future ownership structure of the Football Club.
As it stands, Annan Athletic is essentially an unincorporated members’ club with a Constitution that doesn’t offer the club the necessary protection and powers required. We firmly believe that the correct model for the club is 100% community ownership through a Community Benefit Society (CBS) legal model.
A working party taking advice from Supporters Direct believes that the CBS is an appropriate legal structure to adopt which will safe guard the club, offer its members and the board limited liability and protects the club’s assets. By undertaking this process, the club will have constitutional community benefit and will commit to reinvesting all profits back into the club.
In order to move ahead with this proposal, we are undertaking a consultation process, not just with our existing social club members, but with anyone who cares about the club from the area. As part of this, we are holding an open meeting on the 19th of January at Galabank Stadium where representatives of Annan Athletic FC and Supporters Direct will be available to answer questions regarding the CBS model.
About Supporters Direct
Working with over 180 supporters trusts’ and supporter owned clubs with over 400,000 individual members, Supporters Direct is the UK’s leading organisation within sport and community engagement. Over the past 15 years they’ve helped their members raise over £50 million including £6million through their work with community shares offered through the Community Benefit Society model.
Supporters Direct promotes the value of supporter and community engagement and helps supporter groups to secure influence and become a constructive voice in how their club is run. There are now over 50 clubs owned by their supporters including 5 English Football League Clubs (AFC Wimbledon, Wycombe Wanderers, Exeter City Portsmouth, Newport County) and 3 SPFL clubs (Motherwell, Clyde, Stirling Albion) with another 2 on a path to fan ownership (Hearts and St Mirren)
Supporters Direct work in over twenty European countries, in Football, Rugby League, Rugby Union, and Ice Hockey.
Supporters Direct’s mission is, “to promote sustainable spectator sports clubs based on supporters’ involvement and community ownership” which has been their guiding principle since they were established in 2000. To find out more about what they do, please visit www.supporters-direct.org .
In Scotland they are a member of the Scottish FA’s Congress and are co-funded by the Scottish Government and Scottish FA.
Supporters Direct are a Community Benefit Society, owned by their members and regulated by the Financial Conduct Authority.
What will change between the existing situation and the proposed model?
There are four stand out differences between our existing model and the proposed model. These are:
- Asset Protection: added protection that prevents the assets of the Club being distributed among individuals and helps removes speculative interest not interested in the club’s wellbeing. This will be embedded within our rules meaning the members cannot vote to change the legal structure of the organisation and potentially distribute its assets and make profit among the members.
- We will be overseen by a regulator in the Financial Conduct Authority which means we will have to prove that we have been operating as a democratic organisation which exists for the benefit of the community – so things like elections and the AGM will have to happen or we may be fined.
- We will have the ability to raise finance using a relatively new but successful method called community shares. It is a cost effective and well suited to small community owned businesses.
- The club will have limited liability and be treated as a legal entity in its own right.
What is community ownership?
‘Supporter owned’, ‘community club’ are phrases that have become popular when talking about clubs. Lots of clubs do lots of great things in their community, and many supporters feel like they ‘morally own’ their Club, but when Supporters Direct talks about ‘supporter ownership’ (or similar phrases like ‘community ownership’) we mean that;
- A minimum of 50% +1 of the voting rights of the Club to be controlled collectively by a democratic entity which has an open and inclusive membership (100% of the voting rights would be controlled democratically via this model).
- ‘Democratic’ to mean the membership of the entity to work on a one member one vote principle
- ‘Inclusive’ to mean that there are no substantial barriers to participate as a voting member, with membership open to all that are sympathetic to the aims of the Club.
- Any profits are reinvested back into the Club as opposed to being distributed to shareholders.
- The Club is committed to running as a sustainable business.
What are the benefits of community ownership and the proposed model?
Through the proposed legal model, Annan Athletic could potentially benefit in a number of ways:
- Community Investment: allows members to invest in the club using a unique form of share in a way that’s fair to both the club and the member, called community shares.
- Democratic Ownership: one-member-one-vote ensuring everyone has a vote in electing directors, and be consulted on big decisions about the long-term interests of the club
- Asset Protection: added protection that prevents the assets of the Club being distributed among individuals and helps removes speculative interest not interested in the club’s wellbeing
- Community Objectives: written into the articles or rules of the club. Presenting the true values to partners that the club exists for the wider community, not individuals
- Limited Liability: collective ownership of assets and liabilities, protecting the club, its members and Directors
- Reinvesting Profits: any surplus being reinvested into the club or maintained to keep sensible reserves
- More Volunteers: with more people involved in the ownership as members or investors, there is more collective interest and involvement in the club
- More attractive for Grant Funding: given the right project, the model of community ownership is more appealing to public funding bodies.
What are the members’ liability?
If Annan Athletic Community Football Club Limited would be registered as a Community Benefit Society it would mean that (like a company) (1) it is a legal entity in its own right, independent of the members and (2) the liability of members is limited to the value of your nominal £1 shareholding (which will be taken at the time of joining out of the initial membership fee). Any claim arising from the activities of the Society will therefore be a claim against the Society not the members. If the Society were to become insolvent, the members would lose their £1 stakes but could not be called upon to contribute further. In short, buying the share doesn’t lay you open to any responsibility or liability.
What impact would a change in Ownership have for the current manager?
There would not be a major impact on any aspect of the footballing side. As in all things moving forward any changes would be as the results of decisions by the elected Board of Annan Athletic Football Club (and the delegated responsibility they give to people in the senior team)
How will membership to the club work?
Membership is open to any individual, unincorporated body, firm, partnership or corporate body who or which:
is a supporter of the Club;
has an interest in the game of football in the Area and is in sympathy with the objects of the Club;
agrees to take an active interest in the operation and development of the Club and its business;
agrees to respect commercial confidentiality in relation to business decisions of the Club; and
Agrees to be bound by these Rules and by Rules 3 (the objects) and 7 (the community benefit purpose) in particular.
The Club Board shall have power to refuse membership to any person who does not in the opinion of the Club Board meet these requirements.
Every member will hold one ordinary share (voting) in the capital of the Club. No member may hold more than one ordinary share in the Club either individually or jointly
The Club Board will decide and issue a form of application for membership. Members will be required to pay an annual subscription which the Club Board shall decide, the first payment to be made at the time of application for membership. The sum of £1 from the first payment shall be applied to purchase an ordinary share in the Club.
The Club Board will have the power to offer associate or affiliate status with or without payment or subscription to corporate or unincorporated bodies which support the aims of the Club. The Club may designate a share in the capital of the Club as being held on behalf of any unincorporated organisation but no-one shall be entitled to vote at any general meeting of the Club who is not a registered holder of a fully paid up share of the Club.
Members of the Club aged under 16 may not:
be a member of the Board of Directors or other officer of the Club
vote at a general meeting, either in person or by proxy
vote in any election to the Board of Directors.
The proposed new CBS constitution can be viewed online by clicking the attachment.
The constitution is largely taken from the Supporters Direct model which is the same used by the other 50 supporter owned clubs. Alongside the main constitution we have the option of having side policies to cover some of the areas in more detail for example an election policy for how the election should run.
If you have any questions about the constitution or suggestions to make any changes we would like to hear from you, just drop us an email to email@example.com
Once registered the rules can be changed but will need the right level of support from the membership before they are accepted by the FCA.