Following yesterday’s End of Season Financial & Strategic Update, the ‘Well Society board today issued the following statement.
Most of you will now have seen the statement the Motherwell board issued yesterday outlining the stark reality of the club’s financial situation and setting an ultimatum to the ‘Well Society. We welcome the clarity and will emphatically embrace the challenge.
We would like to offer our thoughts on the way ahead but first of all we must apologise to ‘Well Society members for a lack of communication in recent weeks following the annual general meeting.
There were a number of significant developments in the run-up to the meeting on May 2 and discussions with the club in the intervening period which made the situation very fluid. So, we felt it best that we wait to communicate with members once the club had outlined its position. But we acknowledge that communication must improve significantly in the weeks and months ahead.
In its statement, the club explained that it posted losses totalling about £780,000 for Stuart McCall’s first two full seasons in charge and expects to record another deficit for the most recent season.
The club has explained some of the reasons behind this performance: the loss of Rangers to the top flight; the continuing lack of league sponsorship; falling attendances (the average attendance at Fir Park was 700 lower this season than during Maurice Malpas’s campaign in charge, when we stayed up on the final day); redistribution of money to the lower leagues; the decision to reduce the prize money for finishing second in 2013; declining commercial income.
Whatever you think of the financial decisions taken, the reality is that the club needs money to underpin these losses. In the past John Boyle plugged the gap but he is under no obligation or expectation to do so again having already donated his shares to the club. These shares were earmarked for the fans through the Well Society and can still be ours.
In the past few months the ‘Well Society loaned the club £230,000 which helped it through a short-term cashflow situation, but the club also sought funds from a third party. The previous year the ‘Well Society made a £150,000 capital injection during a similar period of cashflow issues. In the difficult months of February, March and April next year the club is likely to again need money to see it through to the end of the season when the full SPFL prize money comes in.
If the club cannot get the money from us, they need to seek it elsewhere. That means that time is running out for Motherwell fans to raise the money needed to meet the aims of the ‘Well Society – the main goal being a majority stake in the club. We have been given until the end of November to reach the £800,000 mark, with the total being just over £420,000 at the end of April.
There are effectively three scenarios that will unfold from now onwards.
(1) We do not raise enough money and the club raises cash from external sources.
This could be soft loans from Motherwell-minded business people who are open to the idea of community ownership. We know the club retains the goal of fan-ownership as its priority and would seek to raise money under those terms. However, there is a possibility that the club could be forced to sell the shares donated by John Boyle to perhaps one individual or group. There are no guarantees that their motives and ideals would be shared by the Motherwell support, or that they could successfully run a football club.
We have already experienced administration and it was fortunate that John Boyle took a financial hit and stayed around to put the club on a level footing and give us the opportunity to own the club. But who knows what could happen if a new owner comes in and gets the club into trouble? There are too many examples of Scottish football clubs suffering financial problems in recent years not to have some concern about the unknown.
(2) Neither the club nor the Well Society raises enough finance and the Motherwell directors are forced to slash the wage bill.
The club statement revealed that Motherwell would be forced into a “very substantial reduction in expenditure plans” if they could not raise capital in the coming season, which would “diminish our competitive capabilities on the field and create a negative financial spiral”. Inevitably, people will lose their jobs and more players will leave, and days like the other Sunday at Pittodrie and European trips will be highly unlikely to recur in the near future. Long term, the club could find itself fighting to maintain our top-flight status.
We know the Motherwell board would do everything they can to avoid that scenario, but again there can be no guarantee of raising sufficient capital from other sources. John Boyle put the club up for sale several years before the ‘Well Society was founded and no suitable buyer emerged. St Mirren are among the best-run clubs in Scotland – a debt-free, top-flight club with a new stadium and training ground – but they have been up for sale for years without attracting an offer that is acceptable to their board. People are not queuing up to invest in Scottish football. As a support, we have possibly been spoiled by the safety net of John Boyle’s personal wealth in recent years. If we can afford to, it is time we took responsibility for our own club rather than taking our eyes of the ball and depending on another white knight to come along.
(3) The Well Society meets a key target set to us by the club of raising £800,000 by the end of November.
We stabilise the club’s finances and in return we would soon afterwards move into position to take majority ownership of the club while continuing to raise funds and increase our membership.
For us to meet the long-term goals, it is imperative that fans come forward urgently to join the Well Society if they have not already done so. We appreciate it is not easy to meet membership fees on a one-off basis but there are flexible opportunities to pay monthly so you can contribute whatever you can afford. We are also urging members to upgrade their memberships – again there are ways to do so gradually. It is now or never to show we can grasp this opportunity.
We are as frustrated as anyone by the lack of significant progress in raising funds. Some complicated issues have held us back – such as last year’s share purchase and the subsequent change of rule over lending the club money and ongoing discussions over renewal fees/benefits – when we should have been focusing on recruiting members and raising cash.
As a board we have had relatively little time to raise enough funds, but we know now that time is running out and we need everyone to pull together to help raise money and support for the ‘Well Society. We will step up our fundraising efforts, re-launch our recruitment plans in the very near future and again try to simplify the model – but anyone can join at any time now.
Another frustration is that we have not been able to engage the business community as much as we would have liked and need to, despite extensive efforts. One of the decisions made at the AGM was the election of Robert Montgomery to the ‘Well Society board, after Sandy Kilpatrick stepped down following 18 months of hard work. Robert will help focus ‘Well Society efforts on attracting business investment.
We know that some fans might be reluctant to hand over money to the society amid uncertainty over whether it will achieve its goals. If we do not achieve majority ownership, our aim is to achieve a significant holding that can give the fans substantial influence in the way the club is run, and offer checks, safeguards and protection should a new majority shareholder come in. So every penny will count.
We will have discussions with the club on the mechanics of this if we do not achieve our main goal, and the decision will also rest in the hands of the members, but the aim of the Well Society board is to become a significant shareholder, even if we fall short of full control. But full control remains the goal to which we must all be committed.
To conclude our message, we make a general appeal to all those who can join the society or contribute more. Few fan bases get such an opportunity to own their club and protect it for future generations, outwith times of crisis, and sometimes times of crisis are too late. If the society does not raise enough funds in the coming months, we may indeed be too late.
If you are a ‘Well Society member, please, please try to persuade more of your friends and family to join, or upgrade your membership, if you can. If you are not a member, please join now. Otherwise this once-in-a-lifetime opportunity to secure majority ownership for Motherwell fans may be lost forever. And no-one can tell what the consequences will be.
The ‘Well Society board
May 22nd 2014
To join the Well Society click on thewellsociety.co.uk/join-the-society/ or phone Alison on 01698 338006