A discussion paper

Background
The Supporters Direct Conference at Birkbeck on 5 September 2001 included a summary of the state of play of the trusts initiative, and a number of workshops which addressed different aspects of trusts and their establishment and organisation.

I will try to keep these comments impartial! Clearly Supporters Direct have an interest in promoting trusts, that’s why they were set up after all. My personal preference for a trust rather than an ISA, because I think pragmatically a trust is more likely to be taken notice of by the football club board, is also something I will bear in mind as I comment.

The current state of play with Trusts
Supporters Direct is a government-funded initiative launched in the year 2000. In the report issued at the conference the purpose of the project is described as ‘to give legal and other assistance to supporters who want to play a greater role in the running of their clubs, including through the establishment of shareholder trusts’.

Funding was put in place for the Birkbeck group to employ staff for four years, the first of which has now been completed. In addition to core funding for staff, funding has been provided to secure access to develop the legal framework for trusts and to enable supporters’ groups setting up trusts to have access to free legal advice.

During the first year of the project there has been an explosion of activity in the setting up of Trusts. The precise figures given by two speakers for the number of Trusts now in existence were inconsistent, possibly because one speaker was counting non-league clubs and the other wasn’t. On the lowest figures quoted, however, there are currently 38 Trusts at league clubs (including Premiership) and the total is expected to reach 50 by Christmas. By the end of the year, therefore, the majority of professional clubs in England will have a trust.

Aims and objectives of Trusts
Coming to the meeting without a very deep knowledge of trusts, I had expected to hear mostly about supporters on the board and part ownership by supporters through shareholding. Undoubtedly that is an approach followed by many Trusts, but it is by no means universal. Trusts vary in their aims and objectives, particularly those relating to share ownership and supporters’ representation at board level. Many are not based on a shareholding model, although the Trust Model Rules which are the basis for Trust formulation, provides for this approach. Chesterfield and Lincoln City have taken the process of share ownership by supporters to the extreme and each of these clubs is now wholly owned by a supporters’ trust.

Two situations were cited in which a shareholding model is not practical, at least in the short term:

1. Small single-owner clubs where there is no immediate prospect of a substantial shareholding being taken by a supporters’ collective. Example: Stockport County, where a single owner has 98% of the shares.
2. Large clubs (plcs) where any appreciable (influential) shareholding would require millions of pounds to be raised.

It was interesting to hear that at these two extremes there is common ground in terms of the difficulties of a shareholding model being realistic. Obviously in the case of Oxford United we are close to the first situation; 89% held by the owner, the other 11% being held by a large number of small investors.

The essential point though was that even in situations such as these, adopting a Trust model was still felt by those pursuing it to offer several advantages over the ISA approach. These advantages as I understand them are as follows:

1. Supporters Direct can offer a standard set of model rules which provide a basis for the legal establishment of the trust. These rules can be varied to some extent by individual trusts to meet their own preferences and needs, but the detailed framework is there and in practice most supporters’ groups will not feel the need to make substantial changes. This avoids potential wrangling over a constitution or, worse, the formation of an organisation with no formal constitution which is open to criticisms such as unrepresentativeness.

2. Supporters Direct is a Government-funded initiative and as such has been given the resources to provide support in the process of setting up a Trust. This support includes:

• telephone support through the early stages of the process
• legal advice
• speakers to explain the role of a Trust at preliminary meetings
• continuing advice and support
• ?1000 to assist with funding the setup process (e.g. legal fees, election expenses)
• advice with holding elections
• and (last but by no means least) meetings which provide networking opportunities to find out what other trusts are doing and to share ideas and experiences.

3. As a recognised body Supporters Direct has national legitimacy and a trust set up under its ‘umbrella’ would be more likely than other more informally constituted groups and organisations to be taken seriously by the football club.

4. Other points:

• trusts are based on a democratic one member one vote model independent of an individual’s shareholding (in the case of shareholding trusts where this is an issue)
• they are open to all supporters hence have a small/nominal fee to join
• they have elected officers (but may allow for co-opted members with special skills)
• in the case of a shareholding trust with voting rights, the understanding is that the shareholdings of individual members of the trust will be treated as a block vote to be used in accordance with the policy of the trust (although this is achieved by way of a ‘gentleman’s agreement’ and would not be enforceable).
• Trusts are established as not for profit community-serving organisations (Industrial and Provident Societies) and are monitored by the Registry of Friendly Societies.
• Registration process can be handled within fourteen days.

What about ISAs?
I’ll make no bones about it, I don’t know very much about the degree to which ISAs vary in their formulation. However, undoubtedly the ‘I’ for Independent is important and the relationship with the club is potentially different from that of a Trust. It seems to be an independence that cuts both ways. Retaining the purity of separateness from the club may mean that the effectiveness of an ISA is less than that of a Trust. On the other hand, a Trust could come to be regarded as part of the club establishment, if it does not pay attention to preserving its democratic representativeness of the whole supporter base.

ISAs can affiliate to the National Federation of Football Supporters Clubs (www.nffsc.org.uk). Indeed, Rage On is a non-voting Associate Member of the NFFSC. This body has been in existence for many years. It does not appear to require a standard format for associations which affiliate, the guidelines simply say that each affiliating association should have a constitution which has been approved by its members.

There are a few ISA sites on the Web. Interestingly, on the Independent Hull City Supporters Association site there were details of their shareholding fund in which members can hold up to ?20,000 worth of shares, paid for separately from the annual subscription of ?10. So we don’t have the shareholding = trust equation and there is at least one ISA where shareholding is one of the objectives. The WISA (Wimbledon) site was not surprisingly dominated by the Milton Keynes issue, and the AFCBISA (Bournemouth) site is also perhaps more typical. Both have written constitutions on the web which seem to have been written pretty much as one-offs. The Bournemouth one even stipulates the number of newsletters (10) to be issued per annum, so they can be very detailed. In summary it seems an ISA can be pretty much what you want to make it, in terms of structure and its range of activities.

Where do we go from here?
In the context of Oxford United, the shareholding aspect of a Trust may be something of a red herring in the short term as we consider whether a Trust or an ISA is the way forward for supporters’ representation. There is presumably no realistic short term prospect of a significant supporters’ shareholding being established within a Trust if one is set up. Equally, any discussions with the club about the principle of its willingness to meet on a regular basis with a supporters’ organisation are discussions which do not depend fundamentally on whether that organisation is a Trust or an ISA. It’s mostly a label at this stage, though there is more uniformity to Trusts and there would be ready access to more advice from the centre.

Perhaps the best approach would be to gather speakers from Trusts and ISAs to tell an open meeting what they have achieved and what they feel the benefits are to their clubs of maintaining the particular form of supporters’ organisation they have in their own clubs. In fact Supporters Direct suggest something along these lines, with a first meeting which introduces the concept of a Trust, the aim of the meeting being to gather volunteers to form a working party to formulate a proposal, to be considered and approved at a second meeting.

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