Community Ownership- The Case for Change

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28b5fd8Move to Community Ownership or stay as we are? The case for change-

 

A brief history of the Worcester City FC’s club structure

Our club was established in 1902, from the ashes of Berwick Rangers.

On the 9th of July 1928 Worcester City followed the lead of many other football clubs at that time by incorporating as a private limited company. The main reason clubs were incorporating at this time was to benefit from limited liability status, which meant that assets and liabilities were shared by the shareholders, with an individual’s liability limited to the number of shares that they held. As clubs were starting to grow turning over more money and developing their facilities it offered greater protection for those individuals involved.

Our forefathers were forward thinking and inserted certain clauses into the original articles to try and retain the spirit and collective ownership of the club; for example potential dividends to shareholders are limited and no one person could hold more than 1% of the shares.

It’s testament to their work that the articles have largely remained the same for close to a century.

However the Board of Directors believes it is time to review legal structure of the club in keeping with that same spirit of collective community ownership, to give us a more appropriate structure that will help Worcester City Football Club survive and thrive for the next 100 years.

A club structure for the next 100 years

The motion we will put to shareholders is designed to facilitate the Worcester City community collectively owning a minimum of 50%+1 of the shares in the Club through the vehicle of Worcester City Supporters Trust.

Worcester City Football Club Limited (the company set up in 1928) will remain in place but through acquiring more than 50% of the shares Worcester City Supporters Trust will have effective control. WCST is a Community Benefit Society (CBS) owned equally by its members and registered with the Financial Conduct Authority. Membership is renewed annually and the fee is kept low so that it is inclusive to all.

A CBS exists to serve the benefit of the wider community, in this case Worcester City FC. Assets are protected and held collectively and money that the club makes must be reinvested back into the CBS. It has community objectives written into the constitution and is recognised by public bodies and grant funders as a community body that exists to achieve shared interests.

 

Benefits of Community Ownership as a CBS (Community Benefit Society) – Locality

The two main reasons to go down the CBS route are the advantages to be gained in raising capital for the new ground and negotiating with Worcester city Council to use the and at Perdiswell.

Worcester City Council has stated on several occasions that they will not consider leasing or selling the land at Perdiswell without certain guarantees on community credentials being in place. Becoming a Community Owned organisation (CBS) opens up the possibility of asking for a Community Asset Transfer of the land

Asset Transfer

The FA Guide to Asset Transfer is aimed at community football clubs in managing the facilities they use. The document lists the process of Asset Transfer.

thumbnail of FA Guide to asset Transfer

The FA list Locality, Social Investment Business and Supporters Direct as organisations to contact to help move forward in this process.

WCFCST is a member of locality, has already received SIB funding and is a member of Supporters Direct with James Mathie being the SD Club Development officer being our key contact and involved in several clubs such as FC United of Manchester, Portsmouth, Exeter, AFC Wimbledon etc.

Without Community Ownership as a CBS supported by Community Shares, Worcester City will not be able to acquire Perdiswell via the only possible way – Community Asset Transfer.

The Locality run Community Ownership and Management of Assets Programme supports partnerships between public bodies and community groups. Although we have missed the funding round for this year we will be able to make use of this programme in the future which offers support throughout the process.

Locality offers free support via other schemes for Asset Transfer which we are able to access. They also provide grants to gain experience and knowledge from other Community Organisations that have already taken a particular path.

Community Shares and Locality Funding

WCFCST Intends to part fund the new ground via a Community Share issue which can only be set up via Community Benefit Societies. Locality and Supporters Direct provide expert guidance throughout this process.

thumbnail of Community Shares

There are many different funds that become available throughout the year, such as the Community Shares Booster Programme which is a form of equity investment in withdrawable shares with a maximum of £100,000.

Power to Change was set up last year with the help of £150m from The Big Lottery Fund over the next ten years to encourage community business. There are many different funds available such as The Community Business Fund which gives grants between £50,000 and £300,000 and we have already attended a roadshow to promote this fund.

The Blended Funding Programme assists community organisations to gain extra investment from Social Investors. There is currently funding available for organisations looking to raise over £250,000 which is ideal for our proposal.

We are in an under represented area for Community Organisations so we are in a prime position to make the most of available funding.

Locality also offers assistance via its Locality Brokers scheme which pairs Community Organisations with trusted property professionals such as Architects, builders and surveyors. It also has consultants within its own staff who are experts in all of the routes we will have to go down.

It is important to note that funding sources come and go and several new schemes have come in since the WCFC ST Business Plan was first written. This is an ongoing process where the Business Plan will continually change when new funds become available.  It is imperative that we register our interest for these funds as soon as possible and each month that passes by sees funds close.

For the first time in the Clubs history we have the opportunity become a true Community Organisation backed up by organisations that will help us throughout the whole process.

Ultimately if we can’t secure a permanent home for the club in Worcester then the future looks incredibly bleak. The more shares WCST can hold the more money we think we can raise.

How will the Club operate on a day to day basis?

In practice this means that the members of Worcester City Supporters Trust will elect a governing board, who will act on the member’s behalf.

The Governing Board are then responsible for the overall performance of the Club. They exercise all the powers of the Club apart from those that they may choose to delegate from time to time or are reserved to the members under the Club’s rules.  They represent and are responsible to the members.

The Governing Board will then delegate responsibility to manage the day to day running of the Club to a smaller Operational Board, which they will appoint and be represented on. The Operational Board will report back to the Governing Board, to ensure that they are fully supported and monitored effectively in areas like the budget.

We certainly don’t envisage the current Company Board Directors to depart; and there will be a transitional period for the new governance structure to be set up. Ultimately we believe the change in club structure can create more opportunities and help encourage a greater number of people to give their time for the Club.

100 sports clubs in the UK that use the CBS model, including a number of smaller football clubs.

Which other Clubs are owned in this way?

The following football Clubs that play in the English pyramid at levels 7 and above all have the same or similar club structure to what is being proposed;

  • AFC Wimbledon
  • Exeter City FC
  • Portsmouth FC
  • Wycombe Wanderers FC
  • AFC Telford United
  • Chester
  • Wrexham AFC
  • Enfield Town FC
  • FC United of Manchester
  • Hendon FC
  • Lewes FC
  • Tonbridge Angels FC

In total there are over 100 sports clubs in the UK that use the CBS model, including a number of smaller football clubs.

 

Will there be other changes to the club structure?

In keeping with how this has developed at other clubs if the CBS takes majority control of the shares we would anticipate that there may be further changes. Supporters Direct (the umbrella body for community owned clubs and Supporters Trusts) would recommend that the following takes place after WCST becomes the majority shareholder in WCFC:

  • That the rules of WCST are updated to reflect the new position of the community owning the Club
  • That a policy is adopted which identifies the relationship and level of accountability between the Governing and Operational Board
  • That there is a consultation of members whether the name WCST should be changed to reflect something more appropriate given that the members would now be joining the vehicle that controls the Club
  • That the company articles of WCFC are further updated given they were originally drafted in 1928; or should WCST hold 75% or more shares in WCFC, that a motion is put to the members of WCST recommending that WCFC converts to become a CBS. This would leave just one legal entity and would give the Club a clear identity as a club democratically owned by the community.

These are just recommendations; should WCST take majority control of WCFC ultimately it will be the members of the CBS who decide what does and doesn’t happen.

 

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