Thetownend.com

SWINDON TOWN FC ANNOUNCEMENT
Posted on: Wed 30 Sep 2009

STFC has announced further changes to strengthen the financial base of the Club.

At the time of the last AGM in October 2008, STFC took steps to undertake a restructuring of its share capital thereby enabling it to strengthen its balance sheet. At that time, it also announced that it would, at some stage in the future, make further changes and make a Rights Issue to further strengthen the balance sheet by raising new share capital.

The changes announced today will achieve the following:

1 Strengthen the balance sheet of the Club by the issue of 2,000,000 new shares which will be offered to all existing shareholders.

2 Raise additional funds for the Club.

3 Enable existing shareholders to participate in the ownership of the Club.

4 Deal with the administrative problem that of nearly 3,500 shareholders, there are 800 shareholders for whom the club has no contact details and that in many cases the Club has had no correspondence with them for many years.

The basis of the restructuring is a Rights Issue. It is proposed that the existing 18,000,000 1p shares will be consolidated into shares of £1 and that 2,000,000 new £1 shares will be issued.

When a 75% interest in the Club was acquired by Swindon Football Holdings Ltd (SFHL) in January 2008, SFHL agreed to advance a minimum of £3,500,000 in order for STFC to commence the process of eliminating its debts. Since that time, SFHL has advanced £7,500,000 to STFC as it has continued to clean up the Club, deal with issues from the past (e.g. the Corporate Voluntary Arrangement, amounts owing to HM Revenue & Customs, the Datasat litigation, etc) and provide for its future development.

From a practical point of view, it is obviously unrealistic for Club shareholders to expect SFHL to continue to fund STFC without recourse to other shareholders and, accordingly, today's Rights Issue, which will be underwritten by SFHL, will give existing shareholders the opportunity to invest further in the Club. Shareholders will be offered the opportunity to purchase shares pro rata to their existing holdings with a minimum investment of £100.

Swindon Town FC

The Directors of the Club are encouraging all shareholders to take part in the share issue which it sees as an essential part of strengthening the Club whilst, at the same time, continuing to offer all fans the opportunity to remain as shareholders in the Club. STFC is also proposing to issue a small number of shares, on the same basis, to a number of people who are not currently shareholders, but who have expressed an interest in investing in the Club.

Commenting on the Rights Issue, Chairman, Andrew Fitton, said:

"STFC has always been, and continues to be a community club with a strong base amongst the population of Swindon. We are very keen that existing shareholders continue to have an affinity and involvement with the Club and an opportunity to invest in its future. Over time however, we have lost contact with a great many shareholders and this exercise will help us create an up to date share register and allow communication that is more efficient.

"SFHL has invested a large amount of money in the Club, but for a relatively modest sum, existing shareholders can continue to hold a stake in their Club."

The Annual General Meeting of the Club will be held on Tuesday 20th October 2009 at 6.30pm in the Legends Lounge.

Blimey, I didn't realise we were making that sort of sized loss.

Maybe this has come at the wrong time for many fans, though.  Under normal circumstances, I would probably have been tempted to throw another £100 at some more shares.  But given that the investment is only an emotional one (ie no one really expects to get any money back or make a financial return), this is discretionary/luxury expenditure...and many of us are reining back on that right now.

What else could there be in the closet?

Fatbury?

Where is Fatters he hasn't been on here in ages?

Think he's a cheltenham fan now

They also want to create 10,000,000 unallocated new shares for future investment

Having read the capital consolidation and rights issue letter I can't help but feel a little miffed. I'm sure Fitton sold the idea at the AGM in quite the same way. I certainly can't afford £100 to remain a shareholder. Oh well.

Is there any benefit from being a shareholder any more?

Fitton is pretty open with things and information spreads round quickly and easily thanks to the interweb.

Having read the capital consolidation and rights issue letter I can't help but feel a little miffed. I'm sure Fitton sold the idea at the AGM in quite the same way.

I certainly can't afford £100 to remain a shareholder. Oh well.

I understand the need to rationalise the share register but it's disappointing there couldn't have been some effort put into making some accomodation for existing shareholders by allowing them to, for example, upgrade on a like-for-like basis rather than forcing everyone into the £100 minimum subscription. Even a compromise of maybe a £10 minimum sub for existing small shareholders would have allowed many more people to remain as shareholders than will be the case now

It costs money for a company to manage its shareholders - processing payments for shares, issuing share certificates, handling share sales and transfers, maintaining the share holder register, sending out company paperwork, agm costs and so on. If they set the minimum subscription at £10, it would cost the club more than that in the first year alone - do you think its right that the club foots the bill to enable people to own a share of the club?

Part of the problem is the previous boards allowing the shareholdings / shareholders to get in to such a mess and allowing people to own a very small number of shares (which they actually encouraged / caused at one point).

All fair points, although I think the numbers involved wouldn't be huge, so any costs would likely be minimal. Although I don't know whether that's the case, if there would be a substantial cost, the point becomes more pertinent.

Having read the capital consolidation and rights issue letter I can't help but feel a little miffed. I'm sure Fitton sold the idea at the AGM in quite the same way.

I certainly can't afford £100 to remain a shareholder. Oh well.

So, using my GCSE maths expertise, with 2,000,000 shares being sold at GBP1.00 each, potential income from this is GBP2,000,000.

What will that money be used for?

The club needs to stop losing money and be run like a business rather than a charity. The shares changes might not save much money but it all helps and more importantly it all adds up. Even if it only saves £5k a year, if you save that amount in 10 areas over 5 years you've saved £250k.

It was nice to be at an AGM, and feel wanted for a change, and for anyone who predicted the stadium would be turned 90 degrees in the ground development... it's not going to happen.

So what was said then?

So what was said then?

They reckon that the club needs to bring in around £7m worth of income a season to break even

I totally forgot about this, for some reason I thought it was on before a home game

I can't see that happening anytime soon even if we flirt with the Championship. £7 million means almost doubling our income which would be a remarkable feat if it ever materialises, only a sustained period of success would do that.

Its worrying that the club is still losing so much money and that such a massive increase in income is needed to turn things round. Its crazy that people are still having to pump in cash to clubs such as Swindon to keep them going, surely something needs to be done to sort the mess out that most clubs are in?

In reality, clubs should go part time.....there's no justification for the mediocre player that we see, to be paid so much.

Following in some unpleasant footsteps there, Reg, or are you deliberately setting yourself up as Swindon's answer to Peter Kenyon?
http://news.bbc.co.uk/sport1/hi/football/2545103.stm
http://www.wsc.co.uk/content/view/2580/29/

Old news there Mr D, but it doesn't alter the basic fact, that lower league pro football in this country doesn't make a great deal of sense.

There should be no reason why it can't continue, but the players are paid too much.

When the system evolved there was a maximum wage, and players weren't paid out of season....this meant although clubs were often a bit skint, the sums involved were more manageable.

Now the fans are charged too much, and aren't necessarily getting a better product because of it.

Something has to happen with regard to wages. Whether the players are worth what they are paid isn't really relevant, the only relevant thing is that clubs can't afford them so they must be paying too much. Its kind of stupid in that its competition between clubs for players that push the wages up, but this also means it could be solved pretty easily by enforcing wage caps.

I reckon the top clubs have to be part of the solution as well.

I'm in favour of radically changing the loan system. Allowing an unlimited number of loan players and short term (even 1 game) loans would be a great start. If its done right, lower league clubs could reduce their player head count as they could rely on loan players from the top clubs.

GBP7,000,000 to break even?

Its been said many a time before, but the future is an American style approach:

1. A top tier of a small group of massive clubs that pay a fortune to the players and play to a major audience on one day per weekend and one evening per week. No promotion nor relegation.

2. A farm league/division funded partially by the big boys. Teams play on the other weekend day and another evening in the week. This is basically reserve team football in all but name. The clubs are owned by the big boys and develop players.

3. A semi-pro regional league sponsored from above or populated by young kids. Split regionally to reduce costs. Some sort of playoff mechanism and maximum amount of time that you can play in the league before you either progress or are released.

4. Amateur leagues.

Its been said many a time before, but the future is an American style approach:

1. A top tier of a small group of massive clubs that pay a fortune to the players and play to a major audience on one day per weekend and one evening per week. No promotion nor relegation.

2. A farm league/division funded partially by the big boys. Teams play on the other weekend day and another evening in the week. This is basically reserve team football in all but name. The clubs are owned by the big boys and develop players.

3. A semi-pro regional league sponsored from above or populated by young kids. Split regionally to reduce costs. Some sort of playoff mechanism and maximum amount of time that you can play in the league before you either progress or are released.

4. Amateur leagues.

I'm sorry but that sounds shit. Promotion and relegation is what football is all about. We dont need an American style play off system as we already have cups for that sort of thing

It does but I think he's right. Don't think NMH was advocating it, just that it's what's likely to happen. It might not be quite as bleak as NMH paints it though:

1) G14 pull up the drawbridge behind them with European Super League. Man Utd, Chelsea, Liverpool and Arsenal (and maybe Man City) bugger off to join it. They take with them the massive TV money and uber-paid players as per NMH.
2) Without massive TV deal to overinflate everything, English football settles back down to more sensible salaries/revenues
3) The huge differential between teams revenues and outlays in English football largely disappears - there'd still be some as there'd still be a top-flight TV deal better than the lower leagues, but it wouldn't be on the current billions vs millions discrepancy.
4) We all get back to watching competitive leagues where clubs and players have a chance of progressing on sporting rather than financial grounds and clubs aren't bankrupting themselves to try and keep up
5) The European Super League disappears up Rupert Murdoch's arse. No-one cares.

Sadly I think NMH is more likely to be right. Especially on the Euro-defectors leaving behind reserve sides to play in the rump Football League as training fodder for their Euro super sides. Benitez, Wenger and Mourinho have all suggested in one form or another that the "top clubs" should be allowed to do just that in the FL. And of course, the game's administrators in this country wouldn't have the balls to say No.

Using the Football League as a farm / feeder league to the Premier League might work. Each PL club gets assigned FL club in each division, with the top four getting two each (to match up the different league sizes). Then the PL clubs have to send out x number of players to the lower leagues, and they could share coaches and managers and that sort of thing.

Christ, you've managed the impossible - you've conjured up a fate worse than the bleak picture NMH was portraying

There would still be promotion and relegation and Football League clubs would get better players and lower their wage bills.

Why is that worse?

Because it would be a loss of our identity. We would caese to be and become Man U B or some such tripe.

It could save clubs like Swindon £500k a season, which seems worth it to me.

So what would you suggest to solve the problem of clubs like Swindon losing £2m a season.

Wage caps, starting at the top level; enforcing existing regulations on ownership/financial probity; prohibiting clubs from starting the season if they carry unsustainable debt. None of which is immediately implementible, but it needs change of that order of magnitude.

We could even get those bontempi organ type things that they have in America to play little jingles for us to sing along to during the match. Fuck yeah.

You jest, but we already get songs after goals. Not that I tend to notice them much.

I agree with all of that. But I just think all the extra players at Premier League clubs that seldom play could be put to good use by lower division clubs and everyone would benefit. Sure there are a lot more loans happening now than ever but there is scope for it to be done even more.