Put your trust in supporters' trusts Ian Ridley Sunday January 16, 2005 The Observer
Sir Alex Ferguson has played his 'no more Mr Nice Guy' card - well, his Mr Angry card - and vows to send a stronger Manchester United side to Exeter on Wednesday for the eagerly awaited FA Cup third-round replay. It will be the biggest collection of stars at St James' Park since Michael Jackson and Uri Geller, but this time City will be making money rather forking it out. After years of racking up debt, Exeter were taken over by a supporters' trust 18 months ago. They were astonished at what they found. 'There was no certainty we were even going to start last season,' says their chairman, David Treharne. 'Basically, what we were taking over was a debt of �4.8million. We came to be on first-name terms with the bailiffs.' Part of that debt, in the novel ways that football clubs find to accumulate them, was a parking fine in York for someone or other at the club. It had grown many times from the original �30 and the Trust settled at �270. They found travel and hotel bills still outstanding for the ill-fated Jackson-Geller publicity stunt. 'The club lost about �70,000 on that,' says Treharne. New revelations came to light last week suggesting that the old regime paid bungs to players. As money filters through over the next month from the two matches against United, the picture has altered dramatically. What's a Grecian earner? Once VAT is paid and expenses are deducted by both clubs, it will not be quite the �1m bandied about, more like �750,000. But Exeter's slate can be wiped clean. Luck? More like fate, and a vindication of the concept of supporters' trusts. This United-City tie captures the imagination of a footballing public in the way only the FA Cup can, touching, as it does, the national psyche. The one club is controlled by a plc, is probably the best run in the world, financially, and an �800m takeover by Malcolm Glazer is still being mooted. The other is controlled by a group of fans who, having inherited one of the worst-run clubs, now might even be able to teach Shareholders United a trick or two. Trusts gained ground in the wake of the Football Task Force, established by a new Labour government in 1998. Following feedback from fans, the Supporters Direct organisation was set up two years later to encourage trusts, of which there are now more than 100 in England, Scotland and Wales, with 59 holding equity in their clubs and 38 having a seat on the board. Two League clubs are controlled by trusts, Brentford and Chesterfield, and six non-League, including York and Exeter. Exeter's genesis was in 1998, when eight fans got together wondering if they could do something about signing a player for the hard-up club. Slowly, membership grew and in the 2002-03 season the trust's accession to power began. The then chairman and majority shareholder, Ivor Doble, placed two men in charge of the club, John Russell, chairman for 10 years at Scarborough, and Mike Lewis, once owner of Swansea. They went through three managers in a season, oversaw the Geller fiasco, the increase in debt, and Exeter's relegation from the Football League. Amid it all, a concerned trust were told they could have a place on the board for �6,000. They paid, but were often excluded from key moments in meetings. At the end of the season, Russell, Lewis and his wife Gillian were arrested - but not charged - by the Devon fraud squad. Finally, they walked away from the club. 'Ivor Doble was looking for a knight in shining armour but there wasn't one,' says his successor as chairman, David Treharne. 'The trust was the only way forward.' Three of a membership now numbering about 1,500 were installed as directors, offering invaluable expertise in accountancy and law. A weary Doble gave the trust most of his shareholding and they bought the remainder for �20,000. They first had to find �100,000 to pay wages, then were advised to negotiate a Creditors' Voluntary Agreement. With the aid of Supporters Direct and a local MP they persuaded creditors, including the Inland Revenue and the council who owned the ground, to accept 10p in the pound. It brought the red figure down to just over �500,000, with creditors from within football - including players - having to be paid in full. They kept going through last season, only narrowly missing the Conference play-offs. Now all this. What will become of the windfall from the United game? Unlike Farnborough Town against Arsenal three years ago, when their then manager Graham Westley decamped to Stevenage with the return of the money he had put into the club, Exeter now have choices. 'It is touch and go whether we will clear the debts,' says Treharne. 'We still owe money for work on the ground and we also inherited playing contracts that the club couldn't afford.' The trust will consult its members - the fans - and Supporters' Direct before taking a board decision on what to do with the money. 'I don't expect there will be a referendum but there will be an informed debate at the club and the decision will come down to supporters,' says Dave Boyle, of Supporters Direct. 'They can pay off debt, or some of it, and they might put some money in a high-interest yielding account. They might also invest in the ground or the squad.' The whole episode is almost a morality tale, or financial lesson, for English football outside the Premiership in the wake of the collapse of the ITV Digital deal. Fans often care little about financial affairs of a club until it all goes wrong. They simply want to see a new striker out on the park, or to chase promotion. Those at Exeter, relieved at simply having a club to support, are more informed and aware of the pitfalls of chasing short-term ambition. With an investment in the club, they are more cautious and prudent. Supporters' trusts may not be the cure for all, as circumstances differ at individual clubs. But they clearly offer a solution to those for whom traditional ownership and ways of operating have not worked. Sadly, many have to go to the brink before they believe that fans, still seen as necessary irritations by some owners, might have an answer. ------------------------ Yahoo! Groups Sponsor --------------------~--> Help save the life of a child. Support St. Jude Children's Research Hospital's 'Thanks & Giving.' http://us.click.yahoo.com/6iY7fA/5WnJAA/Y3ZIAA/GtUolB/TM --------------------------------------------------------------------~-> Please use [email protected] for general discussion. 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