What is “The next level” and how do we get there?

Posted on by thewimbledonway

Amongst Dons fans some of the current discussion about stadium financing has led to talk about whether-or-not taking on external investment would help us to “get to the next level”.

That phrase will probably mean different things to different people, but it’s generally about being a “bigger club”. Other than the stadium, that could mean the number of supporters, and of course the league position.

We think having that discussion as fans and owners of our club means we should consider properly the way football club finances actually operate. That way we can make good decisions about where we might get that money from if “the next level” is something we want to achieve.

Expenses

The expenses of a football club generally fall into one of two buckets, either buying something permanent (anything from a snack bar to a football stadium) or things that you need to keep buying or paying for again and again, such as staff (including players), electricity, and footballs.

Income

The income of a football club can also be put into two buckets. There are the regular income sources such as ticket sales, drinks,  burgers, pies, events at the stadium, sponsorship, and any ‘central’ income from the EFL (broadcasting deal etc). Then there is one-off income: a cup run, a player being sold, a large donation to the club (the annual donation option as part of season ticket renewal), borrowing money such as a bank loan, or when someone makes a financial investment in the business in return for a share of ownership.

Sustainability

I suspect we all agree that the first duty of any football club is to continue to exist for the community it represents. As Wimbledon supporters we know that financial arrangements which could be described as ‘unsustainable’ can put the continued existence of a club at serious risk, and we’ve experienced the most extreme consequence possible. Supporters of many other clubs have of course experienced similar problems, so much so that very substantial numbers of football clubs are now operating on an unsustainable financial basis. Just look back to the loss of Bury, and near loss of Bolton Wanderers this year. It is common knowledge that this is true even of Premier League clubs, and especially those in the Championship.

As a general rule, financial security lies in using regular income to pay for regular expenses, and using one-off income to pay for one-off expenses (though in the case of repaying a mortgage, bond, or some other borrowed income, it may be that it actually generates ongoing smaller expenses in the form of repayments).

Ideally, when a club commits money towards one-off expenses on infrastructure, it will help to build the club in such a way that the regular income grows, which in turn means that the regular expenses can increase.

The big trap that it is easy to fall into is when regular expenses are paid for by one-off income. Because it is one-off income, inevitably and before too long, the money is all used up, and a second ‘one-off’ source of money is needed. Before long a vicious cycle has begun in which repeated sources of ‘one-off’ income are required to keep meeting the expenses.

Loans are often the one-off income of choice, whether from shareholders or other financial institutions. These can be secured on the ‘physical’ assets such as the stadium or training ground (though as part of ‘Financial Fair Play’ the rules (FFP) the potential for  this is more complex), or the stadium itself might be transferred into a different company. The problem is that club ends up either with debt hanging around its neck that means regular income is spent servicing it, attention turned to how to get more income in to pay that debt, and very little attention given to how or why the club got there or how it can walk back from it. That’s the essence of what’s happened to clubs over the last twenty years, and which most recently happened to Bolton Wanderers and, most tragically, Bury, this year.

So how do we reach the next level?

We’re assuming that now It’s pretty obvious to everyone reading, that regular costs should be financed from regular income, and not from one-off income. So the obvious way for us to be able to increase the playing budget is to increase matchday income and finding ways to earn additional money from the facilities we have (some call this ‘sweating the asset’). This is done by having more ways in which supporters and other users of the stadium on non matchdays can spend their money. This might be by increasing the number of supporters who are able to attend matches (expand the stadium), other commercial income through sponsorship, and corporate facilities; on a non-matchday it might be use of conference facilities and bars for functions. We can see why growing our football club requires a stadium that is larger than Kingsmeadow can ever be.

The new stadium at Plough Lane is a critical component of our strategy for growing the club, but The Dons Trust Board has recently notified us of a critical stumbling block in the plan: An £11 million funding gap in the construction of the new stadium.

Reasonably enough, the Dons Trust Board originally expected to fill this one-off expense with some one-off income in the form of a single large bank loan, but for one reason or another it hasn’t yet been possible to secure a sufficiently large sum. The construction contract needs to be signed, but we do not yet have the finances in place.

Do we need external investment?

The specific details remain undisclosed (a problem in itself), but at some point the Dons Trust Board entered into discussion with a group of individuals who are potentially interested in investing a sum of money into the club in return for shares in AFC Wimbledon PLC (the company that owns the club and the stadium, and which is currently controlled by The Dons Trust). From one perspective this sounds like it could be an ideal solution to the problem. But as you might expect, the devil is in the detail.

One of the details is that the primary ‘safeguard’ that we put in place to ensure we could protect AFC Wimbledon’s existence is now under threat. We ensured that we as fans and owners maintained ultimate control over who could become involved in the club through a set of what are called ‘”restricted actions”. One of these is designed to prevent the issuing of additional shares in AFC Wimbledon PLC without the very firm consent of Dons Trust members. The individuals concerned have said that this protection must be removed if they are to commit to any deal, Also very importantly, it is also understood that they wish decisions over future share issues not to involve the membership being involved in any decision over issuing shares, but instead the football club board to be able to decide. Why’s that important? Because they would themselves be in control of precisely half of the board, and The Dons Trust, the other half. Even if though The Dons Trust would for the moment, own a majority of the shares in AFC Wimbledon PLC.

It seems unlikely that anyone would have this sort of requirement if they had no intention of ever using it.

So, we are being asked to change our rules so that future decisions we might not agree with can be made without our consent, or ability to oppose them if we wanted. Should additional shares ever be issued, The Dons Trust would only be able to maintain its level of ownership by purchasing the majority of them – which would mean finding the money. This would become increasingly difficult, since the influence The Dons Trust currently has, would inevitably dilute. With less influence, means less profile, and less profile means it becomes very difficult to find ways of generating money to purchase things like shares.

As the percentage of shares owned by The Dons Trust reduced, it’s just a fact of life that our ability to maintain influence – let alone actual control over the direction and ethos AFC Wimbledon – would be lost. From that point, it’s very hard to see how it recovers that influence.

Can good owners go bad?

If mounting debt as we’ve described, is one of the risks that threatens the continued existence of a football club, another is that of an owner who sees the club as an opportunity to make themselves a substantial amount of money. If we allow external investors in under the circumstances we’ve described above, we must be mindful of one thing: as sure night follows day, eventually the investors would be replaced. Their shares would be invariably be sold on to someone else – even inherited by another individual or institution (a company or another organisation).

For this reason alone we can say that the identity of the current potential investors starts to become less relevant, and the actual decision we’re making and what it means, the important factor. We can’t predict where that ends up, but what we do know is that decisions like that can only be made once.

One thing we should all be clear about is this: Whilst the sustainable route to improving the playing budget, and so taking Wimbledon to the next level is by completing the construction of our new stadium at Plough Lane, the way we do it matters. A lot.

If we achieve it at the cost of losing the right to control our destiny as a club, we inevitably put everything that we have built up over the last 17 years into to the hands of other people, and those people will never need to be directly answerable to you and me again. Think about that.

About Last Night

Posted on by thewimbledonway

“We lose control, day one”

Meeting Summary from the Dons Trust SGM, Monday 9th December. 

Background

Yesterday’s frank, constructive and well-attended Dons Trust SGM provided more information into the public domain about the proposal to sell a significant part of AFCW PLC (the company through which the Dons Trust exercises majority control of Wimbledon’s football club and its assets).

To recap, on 25 November 2019 the Dons Trust board announced an £11m funding gap for the first phase build (9k approx capacity) of the new stadium at Plough Lane, and four options to address it. These were described as:

1 – “hang on and hope for the best” – try to fund the gap by continuing with, as yet unsuccessful, attempts to obtain a loan or loans.

2 – “further round of crowd funding” – run a further attempt to raise money from the community and supporter base.

3 – “donations” – to try to attract one-off donations from the community and supporter base.

4 – “external investment” – to fund some, but potentially not all, of the gap by selling off part of the football club.

 

“Option 4” External Investment Details

Understandably much of the meeting focused on Option 4, and its pivotal nature when it comes to Wimbledon’s status as a football club owned and controlled by its members.

It was clear from the meeting that the proposal on the table was to sell 30% of the club now and give up a number of rights in return for £7.5m going into club coffers 

It would also mean the Dons Trust, and therefore Dons Trust members, giving up the right to control the football club, immediately. Two reasons were given for this:

1 – the “buyers” insist having the same number of board seats as the Dons Trust, and that the Dons Trust is in a minority on the board.

2 – the “buyers” insist that the Dons Trust must give up its right to decide when and how any further shares are created and sold. 

The chair of the Dons Trust board, in his presentation, admitted, “We may lose majority ownership sooner or later.” But the reality is that effective control would be given up immediately. And Dons Trust ownership probably would be diluted over time.

It was also confirmed that the proceeds from selling 30% of the club and giving up control would not cover all of the stadium funding gap. This means that Option 4 is not a satisfactory solution for either closing the stadium funding gap or ensuring the club’s continuing status as a community owned asset.

 

“Crown Jewels” and Covenants

There were discussions about the so-called “Crown Jewels” lock but as yet this has not been given any formal legal status, nor was it clear any such veto would be legally binding. Ed Leek suggested they had lawyers working on the potential details of a deal with these buyers. Currently there would be no equivalent covenant on the ground similar to that which was on the old Plough Lane stadium (and which the owners of Wimbledon FC found a way around). 

 

Timing Issue

The meeting also confirmed that the timeframe for providing Buckingham with a guarantee of funds or further instruction that would enable work to continue without delay could run into February. Any delay or pause in construction (and subsequent restarting) would incur additional costs. 

There was a brief discussion as to whether a sale to any buyers would be presented as a restricted action in itself or whether instead a motion to abolish restricted actions would be brought, which would itself be a restricted action. In either case, a restricted action would require in the first instance a vote to be passed with a 75% majority on a turnout above 50% (and the number of the total possible electorate in favour being over 40%), and then a subsequent second vote. 

 

Other Options

It was also clear in the meeting that there remain other options for raising funding to address the shortfall. Some of them matched those we raised in our discussion piece yesterday: https://wimbledonway.home.blog/2019/12/09/dons-trust-financing-options-for-plough-lane/

While conversations are ongoing with Merton, the DT chair and club CEO suggested that Merton council itself was not currently interested in providing funding through the Public Works Loan Board. The finance group could contact other local authorities however and has not yet done so.

Stadium sale-and-leaseback schemes are still being pursued, as are debentures and long-term ticket schemes. 

The club had previously been using only a sole broker on an exclusive basis to negotiate with potential lenders. That period of exclusivity has now ended so in theory the club could use more brokers to widen its discussions. The DT Chair did say that since the serious nature of the shortfall had been made clear to fans a fortnight earlier, some other options had been brought to the finance group and he was encouraged from the floor to ensure consultations with any fans or well-wishers with relevant expertise were expedited. 

There was significant support in the room for a new bond issue, aimed primarily at fans but also other investors who would receive a return of approx 2-3%. Indicatively a number of people suggested support of £3k each and upwards and one member reminded the board that a previous bond issue saw one individual buy-in for as much as £100k. It therefore seemed the mood of the floor that the finance group should progress this idea as quickly as possible as all other avenues of funding are improved if the overall shortfall gap is smaller.

It was also clear in the debate that whilst the Dons Trust Board Chair considers the Seedrs crowdfunding to have been clear in its messaging and urgency and to have achieved close to the maximum amount raised possible, this view was not shared by everyone in the room. 

There was appetite therefore for the Dons Trust Board spending more time on combining what it had termed option 1 (keep going as we are) and option 2 (more “crowdfunding”) i.e. pursing a range of debt financing options including an appeal to the fanbase and private investors, alongside continuing discussions with commercial lenders and other debt providers. 

 

Conclusions 

 The meeting was held in a respectful and polite manner despite the range of opinions and views presented and we hope this spirit of collaboration and respect will remain the default setting as all parties work together to provide solutions. 

The indicative vote suggested that of those present fewer than 40% would support the idea of outside investment as currently suggested on the information available. 

It was also very clear that a majority of members in the room and several of the Trust Board would like to feel that everything possible is explored for other avenues of funding before external investment is required. It does not feel yet like those avenues have been fully explored or exhausted. This is something we now urge the Trust Board to proceed with in an open and transparent fashion and we look forward to working with them to achieve this. There remain significant amounts of support, help and resource the Dons Trust Board, football club and finance group can access and resource from within the membership base. 

Dons Fans send us their views ahead of DT meeting

Posted on by thewimbledonway

There’s been a lot of chatter online and offline about the issue of how we finance the stadium at Plough Lane. Fans have been commenting a lot on what we’ve published over recent days, including today’s piece on stadium financing options. 

Every single one of them is united in opposition to a panicked dash into the wrong decision.

Ahead of tonight’s crucial meeting, where DT members will have the chance to scrutinise and discuss where we’re at and where we need to go, here’s a selection of what we’ve received.

You can still contact us if you want. Most of all, be there tonight, or watch on the livestream and talk about it online – DT members will soon receive an email explaining how to access it tonight.

“Reading your blog has pulled together all the reasons why we should all give a toss. All that work shouldn’t be undone by sleepwalking into a rerun of Wimbledon FC where the fans are just spectators to a car crash they are powerless to stop.”

“I do not want us to give up control of the FCB and a majority shareholding.”

“I completely concur with all that you say… I am a passionate believer in the Fans Ownership Model … I have seen friends die who were were believers in the Model and they have supported the club since Amateur Cup Final days…”

“If it fails we lose control of the board it will be a kick in the teeth for all the good effort put in since 2002.”

“Losing control of the club and in exchange being offered protection of the club’s ‘Crown Jewels’ is like having your house insurance taken away, and being handed a fire bucket.“

“I feel now is definitely the time for a critical, independent take on the club’s current situation. I am also deeply alarmed by the impression given on social media that a fair number of our fans appear willing and ready to sleepwalk into some kind of takeover of the club from as-yet-unknown investors. The figures detailed in your blog post dated yesterday exactly summarise all of my concerns over what the Dons Trust appears to be proposing. I feel sure there has to be an alternative route to pursue.”“

Dons Trust Financing Options for Plough Lane

Posted on by thewimbledonway

We are grateful to the Dons Trust board for their responses so far to our initial list of questions and we look forward to continuing a healthy debate about the options available for the football club, the stadium plans and ownership and financial structures. To that end, we lay out here our initial suggestions of further options for the Dons Trust membership to consider

We have had a lot of feedback from and discussions with, fellow fans who want to know if we have anything positive to offer as well as opposing the idea of “option 4” (“outside investment”) as currently presented.

We think there remain major areas of concern and further areas that need more clarity in both the “outside investment” option as presented and to convince members that all alternative routes have been explored.

We would like to make clear that we know of several individuals who would like to work with the Dons Trust board and the football club board to purse alternative routes of funding: through debt financing, further fan support or indeed a less disadvantageous version of outside investment. As far as we are concerned as fans and Dons Trust members, the messaging has shifted so quickly from “it’s all fine” to “the stadium plans are in jeopardy so selling in this way to these investors is our only realistic option” that we want to ensure all options have been pursued. We do not think “option 4” is the only game in town.

We know of several Wimbledon fans working in areas of finance who have suggested ideas that were not followed up over the last five years. We would like to see all interested parties brought into stadium discussions in a roundtable to ensure all possible expertise or advice has been sought, recorded and considered.

We are aware that the timescale is tight to achieve this, but it cannot be prudent to view “option 4” as a yes or no decision in isolation. After four years of relative inactivity in ensuring all other ways of utilising our fanbase’s knowledge and that of other sympathetic groups has been exhausted, we need to ensure other options are explored.

In some cases some of these options might require a short-term funding solution or bridging loan to enable work to continue and Buckingham to finish the stadium according to (or close to) the full specification. The financial impact of a short-term deal structure while a longer-term solution is found would need to be discussed as part of the next stage of the process, but this is why we urge the DT to progress fuller consultations as soon as possible.

It would seem counter-productive to the long term health of the club to consider any further at this stage the “basic stadium” model – our suggested routes all assume enabling something close to the full stadium spec to be built to support crowd increases, commercial development, revenue growth and future marketing.

“OPTION 5” – SALE AND LEASEBACK ROUTE
There is potential for some kind of sale and leaseback set-up. To continue with the DTB’s numbering let’s call this OPTION 5.

We would like to know what deals of this kind have been considered up to now by the Dons Trust board and we have individuals and businesses who would like to explore these longer term solutions further.

We believe that any such negotiations will be a little bit more complex if we wish to continue building on a modular basis, but doable. If needs be we could resort to bridging finance, complete to minimum viability and then refinance via a sale and leaseback, using additional funds on a ringfenced basis to build out as much as possible. But it would seem advisable for the club/Trust to raise as much as possible via other routes.

The Trust responses suggest a reasonable likelihood of a commercial loan for around £5-6m. This would suggest the minimum shortfall required to be plugged is approx £5-6m – obviously if any more advantageous routes of funding than a commercial loan provides these amounts can be shifted respectively so long as they total approx £11m.

“OPTION 6 – OTHER EXTERNAL DEBT-FUNDING – PUBLIC WORKS LOAN BOARD
It seems likely that the overall £11m shortfall will ultimately require some form of mortgage. Ideally we think the best body to “hold the keys” as it were in this scenario would be Merton Council. Other councils have provided similar loans to other entities.

Local councils can access the cheapest form of lending possible in the form of loans directly from the Treasury via a mechanism called ‘the Public Works Loan Board’. This is a body that authorises lending to councils to mainly fund infrastructure projects in their areas, which is paid back over time; repayment can be over terms as long as 25 years in length. The rate of interest is in the region of 2-3%.

Different councils have used them in different ways, sometimes to invest directly in assets, sometimes to lend to businesses developing those assets at slightly higher rates of interest. Brighton and Hove Council borrowed some money to lend to the i360 tourist attraction to finish the construction after banks pulled out. Parish councils across England have bought pubs for their communities to save them from residential development, being paid back over time by the local population.

So, there is a facility for Merton Council to borrow some or indeed all of the funds we need, and the rates of interest would be much cheaper than we could get anywhere else, savings us millions over the length of the loan and thousands each month in repayments.

The benefit for the council would be that they lend the money to the club at, say, 1% higher than they borrow it from the PWLB. At, say £3k a month, that would be a useful contribution to the council coffers as well as providing support to a community asset/local employer etc in the form of the football club and foundation and the benefits they bring to the areas. In return the council can ask for a safeguard like a seat on the board or approval of the finance Director appointed by the club.

It may assist in the likelihood of Merton Council be able to discuss this form of debt funding if the club have a commercial loan agreed as well for part of the total amount as it would help make it clear that we’re thought a good risk commercially speaking.

OPTION 7 – FAN BOND/INVESTMENT BOND
We also believe there are further avenues of funding available from our fanbase and sympathetic investors. We would term as option 7 a further bond issue to the fanbase. We do not believe that the Seedrs marketing message was as clear as it could have been or that it explored the finance available from our fans’ savings as opposed to (broadly) disposable income. Anecdotally based on initial discussions, we know of several fans who if the messaging was “enter this bond scheme in order to safeguard the club’s future and avoid selling control of your football club” would take part. Indicatively such a bond scheme could provide perhaps 3% interest to participants (or better yet a sliding scale between 0-4% according to investor preference), which would be attractive to them as a financial proposition while still being a much better deal for the club than commercial lenders. We believe this could raise £2-3m if properly presented and communicated.

OPTION 8 – LONG TERM TICKETING AND COMMERCIAL INCOME
Which long term ticketing deals has the club and DTB explored? Whilst this is a form of borrowing against future income, it would again provide immediate funding now at better rates than commercial lending and again a scheme that was presented as “support this to enable to club to remained fan-owned” would encourage take up. Two indicative initial ideas would be ten-year season tickets (could raise approx £3m) or lifetime season tickets – the latter were sold in Scandinavia and elsewhere for approximately £25k. The club has also used a similar season ticket scheme previously.

What is the club’s commercial projection for the first five seasons at Plough Lane? How many additional sponsors or commercial partners have been targeted? What are the revenue targets? How do these differ to last season’s targets (and actuals) and this season’s targets? What is the involvement of members of the Business Club in investment and commercial opportunities? What happened to the commercial rights issue and naming rights? What are the plans for the event space and increased commercial potential of the new stadium?

OPTION 9 (or perhaps a variant on Option 1)
The Trust responses discussed working with a single commercial broker. Several fans who work in finance have expressed surprise we are working with only a single broker and have suggested other brokers whom the Trust and club could consult. We urge the club and Trust to ensure as part of a wider finance group utilising more of the fanbase’s contacts and experience to consult more brokers.

FINAL NOTES ON OPTION 4:
As currently presented, it seems far from clear that it is desirable to lose control over the PLC (as the investment vehicle for the club/Trust) and any future share issue for a sum as low as £7.5million. This would mean that even if the DT remains a majority shareholder at the moment, it could never prevent itself being turned into minority shareholder in the future so we would effectively have sold control of the football club the moment that £7.5million stake was sold off (a ‘sword of damocles’). It would still seem prudent therefore even if external share investors are the preferred option for the Dons Trust board for a better deal structure than this to be agreed upon.

With regard to outside investment and a changed equity set-up, we encourage the Dons Trust board to discuss with the current proposed investors and anyone else who might arise a situation which does not involve selling off de facto control. We do not see why if those investors have the best interests of the club at heart they would not seek to work within a system that allowed them involvement (and reward) whilst maintaining the club’s core ethos – which is don’t forget part of the club they profess to ‘admire’ so much. To which end we propose a variant of option 4 which would be to explore something similar to the German system of club ownership, a so-called “50%+1” model.

Dave Boyle, former chief executive of Supporters Direct and accredited Social Enterprise advisor, gave us this summary of how the 50%+1 rule works as an example:

Clubs in the Bundesliga are subject to a rule, known as the 50%+1 rule which governs how they can be owned and operated.

The rule states that clubs must be controlled by members associations (called ‘vereins’ in Germany – in effect, a members’ club similar to the Dons Trust). Originally, each club would have run the football club through the verein, but as football became more commercialised, some clubs wanted to variously professionalise their operations, or bring in external financial support.

They did this by creating companies that employed the players, got the revenue from TV, agreed sponsorships etc, and which they could sell minority stakes to commercial partners or interested individuals. In order for this arrangement to be legal under Bundesliga rules, the members club (verein) must own at 50%+1 of this football company, in order that it maintains the controlling interest.

Although this is helped by the structure of German companies where a split between executive operations and strategy and scrutiny is common, in the UK, this isn’t so common – boards feature a mix of Directors: executive (ie, senior employees of the company) and non-executive (brought in for their outside experience). In Germany however, its common to have a two-tier board – the executive board made up of the senior managers, and a supervisory board made up of the non-executive directors, and this structure maps neatly onto the way many clubs are run, including AFC Wimbledon.

All clubs will have an executive board running the club’s operations on a day-to-day level, but they will be responsible to a supervisory board – in some clubs, this is elected directly by fans, whereas in others, the fans elect the people who choose the supervisory board members; there’s no standard set system in place at all clubs, aside from the basic fact that as a fan of a German club, you know that your voice matters and you have ultimate control of the club in the final analysis.

In the case of AFC Wimbledon, we might think of the football club board as the Executive board, the AFCW PLC board is the supervisory board, and the Dons Trust board sits above them. Whether that’s the best strategy for a relatively small club is a moot point – it’s a system that has evolved over time, rather than being the result of people sitting down and working out the best way to run the club. For example, FC Schalke 04 managed to build a 60,000 seater stadium with a retractable roof and pitch that has hosted Champions League finals and world cup matches, whilst still being run by the members directly, without any football company.

We would therefore suggest that a 50%+1 option here would involve the Dons Trust maintaining 50%+1 of the PLC shares and that this needs to be the basis of discussions with any potential investors, along with the caveat that owing to the existing ‘restricted actions’ in the Dons Trust constitution required for any such restructure to be improved, the threshold for approval is relatively high.

We hope that these options can be discussed and explored quickly by the Dons Trust Board or, where similar ideas have already been discussed, anticipate far more information beingmade available to members.

We would conclude by noting that from the moment planning permission was granted, fans in general and those with financial expertise in particular have been asking the club and the Dons Trust board what crowdfunding, share issue or debt avenues would be required or explored. Until very late in the process (well into 2019) the messaging was always that the funding was all in hand and there would be no problems.

Even when the Seedrs campaign was approved and launched, it was not clear about the scale of funding needed in order to preserve something similar to the club and Trust’s current structure. We would therefore urge all parties to work together in a collegiate and open manner to ensure all options are explored and that the recent spirit of openness and transparency is maintained.

Why Dons Trust elections matter

Posted on by thewimbledonway

We thought long and hard before publishing this piece, because we’re acutely aware that the focus must be on collectively finding a way out of the current predicament we find ourselves in. The Dons Trust is at the heart of the way our club is owned and run. Most fundamentally of all, it is at the heart of how we decided we wanted to protect our club for us at the time we established it, for now, and for all those to come. 

In the end, we felt that the issue at the heart of it was entirely relevant to the issue that we’re all so focused on.

Our rules give a lot of leeway to the board, which needs to be able to direct the running of the trust and club without stopping to ask for approval every 5 minutes.
But as members we have the right – and the responsibility – to hold our board to account.

We hold meetings so the board can tell us what it has been doing and we can ask questions. This can work well but has limitations. At times when there has been a challenge from the floor, the challenge has seemed unwelcome and members raising them have felt unheard.

Members can tell the board what to do, via a “members’ motion”. That means getting a motion in a month before a meeting, and having done that, then at the meeting at least two-thirds of members voting need to support the motion. If a members’ motion gets well over half the votes, but fewer than two thirds, the board is entitled to ignore it.

It’s a high bar. And members have not met it often. That can be because people are generally happy with how things are going. Or even if we have concerns, we don’t want to criticise people who we know to be working hard for the club we all love.

At times the DTb has persuaded members to withdraw a motion (with the “WISH” issue), or has taken over a motion initially proposed by members (on timely publication of DTb minutes). With WISH, it is for those who proposed that motion to say if they feel the DTb has done what it said it would do. On the publication of minutes, this has improved overall, but the standard set has often not been met. At the time of writing, the most recent minutes are from August.

Elections are one of the DT’s “crown jewels”.

Even when we have hit two-thirds, the board has not always done as the members have instructed. We’ve yet to hear how the club is going to fulfil the motion passed in April this year to ensure there are four “meet the manager” events each year, including one online.

So how do members really influence the direction of the Dons Trust? By electing people to the board, to use its wide powers. Once a year, half the board members finish their stint and can stand again for election alongside any other member. And we have had some good election campaigns, where there were clear issues debated among candidates and members, and a change of DTb members has reflected the wishes of members.

This year voting opened at the start of November. We don’t know exactly how things stood on the stadium financing issues then, but we do know that it was at their October meeting the DTb “agreed to alert members to the situation”.

Does that mean that we should go through an election without any knowledge whatsoever of the most significant crisis to face us for many years?

That is, before voting started the DTb knew that there was a very serious problem posing serious risks to the stadium project and the club, and which members had to be informed of. Yet during the whole election period nothing was said by the DTb.
We recognise that some of the issues involved are complicated and there are other people and organisations involved who don’t have the same culture of openness that the Dons Trust must have.

But does that mean that we should go through an election, our annual democratic exercise where members genuinely have control of the Dons Trust, without any knowledge whatsoever of the most significant crisis to face us for many years? After the DTb had agreed that the crisis had to be brought to members’ attention? A board should be elected bearing in mind upcoming challenges. We were led to believe it is business as usual, and it is not.

Clearly this isn’t the main issue which needs to be dealt with right now – there is a crisis and we need to find a good way out, together. But how we do things is part of how we got here. And elections are one of the DT’s “crown jewels”.

What we all need to ask The Dons Trust board

Posted on by thewimbledonway

During recent days, a number of individuals have approached us with concerns about how the finance and fundraising for our new stadium has been managed by the leadership in particular, of The Dons Trust Board.

Specifically, that over the past five-to-seven-years, a number of credible, major fundraising opportunities for the new Plough Lane stadium project proposed to the Trust/club were never followed up. This adds to our already long list of concerns about the leadership of the Board on such a vital issue. We must ensure that The Dons Trust (DT) learns a lesson from this.

Although we will be returning to this particular issue in the coming days, we cannot currently dwell on it until the immediate situation regarding the group of individuals who have approached The Dons Trust offering ‘investment’ has been addressed, and the future direction of the new stadium at Plough Lane is agreed.

As a community of fans, we should recognise that it is our investment of hard work and determination, as well as our own substantial financial investment that has resulted in a club which attracts such interest.

However, we are very clear that any the proposal currently being considered by The Dons Trust Board is a one way street. As a result it is almost impossible to imagine that we as member and owners will ever regain a controlling stake in our club should this path be followed.

The recent answers provided by the Dons Trust Board (DTB) following our initial letter was helpful in some ways, if very delayed in its response. However it unfortunately leaves large number of very significant issues unaddressed.

What follows is a list of observations and follow-up questions/points which we would encourage all Dons Trust Members to carefully consider:

  • The capital that The Dons Trust and its subsidiaries (on behalf of all members and owners of the club) is investing into the Plough Lane stadium project is £18.1 million.
  • The group of individuals with whom The DTB has been in discussion propose providing £7.5 million. This is £6 million short of the current funding requirement according to the figures provided. 
  • In exchange for their £7.5 million, this group of individuals expect to take an equal number of seats to those held by the DT on the board of AFC Wimbledon PLC and all the companies it owns (‘subsidiary organisations’).
  • If we as members accepted this offer, The Dons Trust would need to obtain a further bank loan of up to £6 million. That’s another £6 million that we as members and owners would need to borrow and make interest payments on.
  • As well as taking half of the control of the companies we currently own, it is stated that these investors will prevent us from being able to stop them from issuing further shares for sale to themselves or others. The Dons Trust’s level of ownership would further erode to the point of becoming a minority shareholder with no meaningful control or oversight of the club.
  • The additional problem we have is that raising funds through the issuing of additional shares (or ‘share capital’) means that we would be removing a central protection that stops us being like many other clubs – including many in current and recent financial trouble.
  • This group of individuals offering to take control for a pittance are apparently dissatisfied with the way in which the decision-making structure of the club and Trust has been operating. We have our own disagreements about the way the club has been overseen, particularly of late, and we wish to tackle these issues in the very near future. Overall, Fan Ownership has provided us with unprecedented success and we see no reason to relinquish it as a knee-jerk response in this way. Given it’s obvious that this particular group would like to take control for their own personal reasons, we consider their opinion to be largely irrelevant to the matter of how our club has been owned and run, and so won’t be commenting further on what they say.     
  • The derisory ‘Crown Jewels’ offer as described in the document is comprised of items that the club would have no intention of changing anyway, so the offer to provide The Dons Trust with a veto over such changes is meaningless.
  • The statement that The DT would be at liberty to participate in any future share issue is of no relevance or comfort when The DT would inevitably reduce in size, influence and financial clout, given it would not longer hold the role of owner of AFC Wimbledon.

In summation, here’s what understand this group of individuals are offering members of The Dons Trust:

  1. To take control of half the club for £7.5 million.
  2. Expect us as members to still invest the full £18.1 million we’re committed to through The Dons Trust to build our new stadium on Plough Lane.
  3. Expect the club to take out an additional £6 million loan + interest to complete the stadium, reducing the money available for the playing budget anyway.
  4. Prevent The Dons Trust (and us as members) from deciding who else can own new shares. This would mean we would never be able to take control again if we wanted – or needed – to.
  5. Remove a fundamental safety measure (preventing the issuing of new shares without agreement from The Dons Trust) that prevents AFC Wimbledon from being put at serious financial risk through overspending. This is only months after the football family lost Bury FC to financial collapse through overspending, and nearly lost Bolton Wanderers as well.

What do you think? Tell us.

Statement: AFC Wimbledon

Posted on by thewimbledonway

Statement: AFC Wimbledon

Date: 04/12/2019

As the original group of fans responsible for drafting the recent letter to The Dons Trust with a series of questions about the problems over the development at Plough Lane, we note their response issued this afternoon (04/12/2019).

We have made the decision as a group to respond to this letter now, as we believe it’s important to ensure that the issue remains in the minds of Wimbledon fans over the coming days, particularly in the lead-up to the Special General Meeting of The Dons Trust on Monday 9th December.

We are of course glad that the board has responded to some of our questions. That it took this long, on an issue of this importance, raises its own concerns about the fitness of the existing board to handle the oversight of such a huge project. We will return to this at a later date.

AFC Wimbledon was reformed in order to keep the flame alive – the memories and achievements of both the previous players and fans – as well as being a living, breathing entity. It was also reformed to return Wimbledon’s football club to the heart of the community. We did it to once again belong, to be an active partner in the community, and to remind everyone how inclusive and enthralling a football club can be.

Central to that mission was keeping that entity safe from those who may by design or accident threaten that in the short, medium or long term. That – fan ownership as control and care – is not up for grabs, it is now part of our DNA.

We owe it to all those who fought for us to get this far and for all those yet to experience this unique little club that has consistently defied logic and odds, to never dilute our share, never making us just interested bystanders.

This is a bad deal for all of those reasons and we are already examining the alternatives – of which there are many, and we will return to those in the coming days.

Our hope is that Merton Council – who themselves recognised the supporters worth as far back as our struggles against bad owners attempting to wrench the club away – will once again sit down with us and help make even more history.

We are Wimbledon. All of us.

Signed by

Joe Blair
Peter Bowles
Lou Carton-Kelly
Nicole Hammond
Marc Jones
Kevin Rye
Kris Stewart
Charlie Talbot
Plus others

——Ends——