The Board at Motherwell FC today released the following statement in light of today’s ‘Newco’ application to the SPL by Rangers FC.
“Confirmation has now been received from the SPL that an all club vote on the proposal to transfer Rangers share is scheduled to take place on 4th July. Motherwell FC are in the process of arranging a forum to discuss the issue with supporters of the club. Following that meeting, the board will meet and agree the club’s position and ultimately how we will vote if the meeting takes place as planned.
“The decision will be taken by the Director’s as a group, as the majority shareholding in the club is currently held under a Power of Attorney by Board members, pending the planned staged transfer to the ‘Well Society. No decision has yet been made by the club on the SPL share transfer, as we will only now see the full details of the proposal and be provided with the full information required. Considerable uncertainty on the implications for revenues and costs complicates our decision considerably.
“The Directors would also like to clarify that the comments made by Director Andrew Lapping in a letter to a national newspaper are entirely personal and are not in any way attributable to the club. Mr Lapping has played no active role in the running of the club for many years and is not part of the decision making group.
“The ‘Newco’ issue is often portrayed as a straight choice between preserving sporting integrity and clubs accepting a reduction in gate money together with potentially a significant amount of commercial revenue. In reality it is far more complex than that. We are fully aware that an overwhelming majority of our fans and most others, who have so far expressed an opinion, are totally opposed to ‘Newco’ being allowed immediately back into the SPL.
“The club has been flooded with correspondence from supporters of many clubs which ranges from fully reasoned arguments to direct threats concerning the consequences of a vote either way. Our Board of Directors is predominately made up of lifelong Motherwell supporters and we fully understand that fans are the single most important group within the club. History shows that any business which ignores the wishes of its customer base rarely prospers in the long term.
“In any event it would appear a yes vote may not even guarantee that ‘Newco’ will play in the SPL next season as the club is still subject to SFA sanctions and there is an ongoing investigation into the use of EBTs to make payments to players.
“The consequences of five or more clubs voting no to ‘Newco’ do also need to be understood and fully taken into account. In addition to lower gate receipts, we are likely to lose an as yet un-quantified amount of commercial revenue with a specific risk around TV payments. The clubs’ income from SPL distribution of commercial revenue was approximately 36% of the total amount generated last season, although this does vary year on year. A significant proportion of SPL income is obtained from TV and other broadcasting rights. The lack of clarity on what the actual impact of ‘Newco’ not playing in the SPL will have on these revenues is a major problem for the Board.
“Despite some reports, it is our understanding that Sky/ESPN have made no official statement on how they will react to a no vote and we believe that a number of other contracts could be re-negotiated if ‘Newco’ was refused entry to the SPL. We very much hope that sponsors and partners will continue to provide their backing whatever the outcome of the various ongoing processes.
“The common response to the potential loss of revenue is that clubs need to cut their cloth accordingly. Of course this could be achieved over a period of time, by reducing both on and off the field costs, but it cannot be done overnight. It is vital that we honour player and employee contracts and meet all our other obligations.
“We are in the healthy position of having no debt but have set our cost base in the expectation that income will be at a certain minimum level. In the event of a shortfall we do not have a bank or benefactor able to fund the gap. We clearly do not wish anyone associated with Motherwell, or any other club, to suffer as a result of events in which they played no part. Having been though a painful Administration process many years ago, we are also better placed than most to have sympathy with both the employees and ordinary fans of Rangers who are in no way responsible for the uncertainty they are facing.
“The Directors of any business have a duty to act in the best interests of the company or, in this case, the club. In normal circumstances, decisions are fairly straightforward but in this situation a decision either way is likely to have a significant impact on at least one of our key income streams. It is inevitable that there will be consequences if a business suffers a sudden drop in income. Instead of the usual process of deciding what is best for the club, we are currently faced with trying to decide on which is the least worst option. The stakes here are high.
“There are a number of other knock on impacts to this lack of certainty. Firstly we have temporarily delayed giving the club any access to the ‘Well Society funds. When we launched the Society we made it clear that we would not put the funds raised at risk and that they would be used only to assist with short term funding requirements at the club, when there was a clear source of repayment. In the current circumstances we believe that we can only fully protect the money raised by keeping it entirely ring fenced from the club until the outcome of the ‘Newco’ debate is known and the financial impact understood.
“In addition we will need to adopt a cautious approach to investing in the playing squad. To date we have not changed our previously agreed plans but this could change dramatically in the current weeks. The inability to accurately forecast future income could also impact on the production of our financial accounts.
“By any measure the events at Rangers are having and will continue to have a huge impact on Scottish football. It is our hope that the tax authorities and liquidator will investigate these events fully and are able to take appropriate action against those responsible for causing lasting damage to our national game.
“Whilst we fully understand that the ‘Newco’ issue is one which many people feel strongly about, we hope that our fans now have a better idea of the extremely difficult position the club is in and that you continue to offer support by buying season tickets and, if you have not already done so, joining the Well Society which remains very much part of the club’s plans for the future.
“We can assure you that any funds raised by the Society will remain separate from the club, until the position is clearer, but we remain totally committed to the fan ownership model. Whatever the outcome of the vote on ‘Newco’ it will be more important than ever that our fans stay loyal to the club, as we look forward to our debut in the Champions League, and that our efforts to grow the fanbase continue to be successful.
“On the pitch, these are very good times at Motherwell FC and it is vital that we continue to work together as a club to enable us to emerge from the current SPL difficulties with our integrity and optimism intact.”
