Neither of those financial results have anything to do with fan ownership but rather are to do with the break-even business model and taking £1m+ in transfer fees and reaching 2 cup finals. For comparison Motherwell were posting losses when they were finishing 2nd in the league under McCall and with Leeann Dempster as CEO.
The c.£500k loss for last season was the second full season and the word from the AGM last week is that worst case projection for this season is that the club will be a cash neutral position.
Jim McMahon spoke of as positive a situation in a while. A "normal" situation. At worst case the club are in a position to finish tenth, have no player sales, have no cup runs and be able to knock back bids and still be able to cope with a loss for a year or so.
Happily things are much more rosy than that the worst case next year will be a cash neutral position.
That's after paying off the outstanding debt in roughly 3 years (c. £1.6m) to John Boyle and Les Hutchison (though including a write-off on the part of Hutchison). Ultimately the fact that Motherwell were able to absorb a £500k loss as a fan owned club is actually an endorsement of sorts.
That is the latest figure they provided of people that had signed up I have not heard another figure since then, of that figure (as has happened with Hearts & Motherwell) only around 40% follow through and contribute, that figure will slowly drop of till the the regulars are left. Then hopefully it may slowly climb over time.
Motherwell had over 5000 sign up, but actually only started with 1200 contributing and have over years got this to 2100 with a big push to try and meet and sustain 2500 by end of next year. The “double your money” initiative helped greatly to swell the numbers. Motherwell have 4500 season tickets.
The foundation of Hearts has leveled at around 8000 members after 9 years which is incredible, but Hearts are a big club in Scotland. They have 14000 season ticket holders.
Both these clubs have had a long term phased in plan to slowly in stages take over the club, also with both of these clubs being in admin at the time has driven momentum.
On both of these clubs there was a ground swell to do this to save the club, a long term plan, plus a large buy in from their communities where to an extent they are only team around. We are trying to do this in 12 weeks without building up momentum or even starting to take contributions
I can't speak about Hearts/FOH but The Well Society as a vehicle had been around from the Boyle/Dempster days (as far back as the turn of the decade https://www.bbc.co.uk/sport/football/17588327) largely because Boyle wanted to sell up but couldn't find a buyer however there was no real momentum. Les Hutchison took over the club in 2014 and there was supposed to be a 5 year plan in place however he bailed just over a year later in March 2016 you can read about it here: https://www.bbc.co.uk/sport/football/35826768
The key part as @Norgethistle highlights is that "a long term phased in plan to slowly in stages take over the club" had been in place. Hutchison handed over a loan of something close to £1.6m that was variously invested initially in keeping the club afloat and in the Premiership but also saw investment in the commercial, academy, medical and strength and conditioning departments.
The point at which Hutchison handed over was after the business had been restructured and investment made, he spoke about it in the BBC article above:
Quote
"[The club] is extremely close [to break even]. In recent months, the player budget has been reduced dramatically, we've been able to sign some really excellent younger players on longer-term contracts, which reduces costs because you don't have to buy a much more experienced player, we've significantly reduced the medical bills by the introduction of the sports scientist.
"We could do with a little bit of a boost on the commercial side, but we have that pipeline of young talent coming through which would give the opportunity for additional transfer income.
It wasn't simply a case of taking ownership then 12 weeks later saying "go do fan-ownership lads" it took a fairly ruthless (and informed) approach to restructuring the business to make it work.
The fact that Motherwell have a competent CEO in Alan Burrows is probably one of the key factors in the model being viable. Just because it works at Fir Park doesn't mean it'll work at Firhill.
Fans are right to be sceptical and really it's up to those pushing the model to convince them that it's a viable business model. Simply saying fan-ownership is the only show in town doesn't really cut it.
Anyway, apologies for jumping on your thread and the length of the post.
Fan Ownership Working Group
in Main Jags forum
Posted · Edited by capt_oats
Sorry for jumping in here but the transfer of ownership from Les Hutchison to The Well Society took place in October 2016.
The first year in full fan ownership was the 17/18 season which resulted in financials of record turnover and a profit of £1.72m: https://www.motherwellfc.co.uk/2018/11/28/2017-18-financial-results-announced/
Neither of those financial results have anything to do with fan ownership but rather are to do with the break-even business model and taking £1m+ in transfer fees and reaching 2 cup finals. For comparison Motherwell were posting losses when they were finishing 2nd in the league under McCall and with Leeann Dempster as CEO.
The c.£500k loss for last season was the second full season and the word from the AGM last week is that worst case projection for this season is that the club will be a cash neutral position.
There was a summary of the AGM over on SteelmenOnline: https://www.steelmenonline.co.uk/forums/index.php?/topic/16088-2019-financesagm/&do=findComment&comment=547937
That's after paying off the outstanding debt in roughly 3 years (c. £1.6m) to John Boyle and Les Hutchison (though including a write-off on the part of Hutchison). Ultimately the fact that Motherwell were able to absorb a £500k loss as a fan owned club is actually an endorsement of sorts.
Fwiw: this post from @Norgethistle nails it:
I can't speak about Hearts/FOH but The Well Society as a vehicle had been around from the Boyle/Dempster days (as far back as the turn of the decade https://www.bbc.co.uk/sport/football/17588327) largely because Boyle wanted to sell up but couldn't find a buyer however there was no real momentum. Les Hutchison took over the club in 2014 and there was supposed to be a 5 year plan in place however he bailed just over a year later in March 2016 you can read about it here: https://www.bbc.co.uk/sport/football/35826768
The key part as @Norgethistle highlights is that "a long term phased in plan to slowly in stages take over the club" had been in place. Hutchison handed over a loan of something close to £1.6m that was variously invested initially in keeping the club afloat and in the Premiership but also saw investment in the commercial, academy, medical and strength and conditioning departments.
The point at which Hutchison handed over was after the business had been restructured and investment made, he spoke about it in the BBC article above:
It wasn't simply a case of taking ownership then 12 weeks later saying "go do fan-ownership lads" it took a fairly ruthless (and informed) approach to restructuring the business to make it work.
The fact that Motherwell have a competent CEO in Alan Burrows is probably one of the key factors in the model being viable. Just because it works at Fir Park doesn't mean it'll work at Firhill.
Fans are right to be sceptical and really it's up to those pushing the model to convince them that it's a viable business model. Simply saying fan-ownership is the only show in town doesn't really cut it.
Anyway, apologies for jumping on your thread and the length of the post.