Stockport County FC Stockport County Supporters Co-Operative
Business Plan and Proposal
P.I.D - Project Initiation Document
"....for the community, by the supporters"
Contents
1. Introduction 1a. Group 1b. Stockport County Supporters Co-Operative
2. Reasons and Problem Statement
3. Key Stakeholders
4. Solution Options 4a. Do Nothing 4b. Offer to purchase Edgeley Park and become majority shareholders in the Football Club
5. Cost Analysis 5a. Offer to Purchase Edgeley Park 5b. Offer for Stockport County Football Club
6. Key Outcomes and Success Criteria 6a. Immediate Benefits 6b. Long-Term Benefits
7. Key Steps to Delivery and Impact Analysis
8. Key Financial Highlights
9. Outline Project Plan and Delivery 9a. Planned Club Hierarchy 9b. High-level Timelines 9c. Key Risks and Issues 9d. Assumptions 9e. Project Governance
Appendix 1. Introduction
1a. Group
Lee Townley and Steven Mottershead alongside Dave Schofield, Matthew Fairweather, Dave Espley and Phil Brennan are a group of Stockport people, the majority of whom are long- standing supporters of Stockport County and members of the Stockport County Supporters Co-Operative.
The group’s ultimate aim is to provide the drive for the Stockport County Supporters Co- Operative board to deliver ownership of Edgeley Park back to its supporters and community. With this in place we are committed to creating a stable and sustainable future for the club and its supporters.
The plan for Edgeley Park is simply to continue to be the home of Stockport County Football Club and to be a central hub for the community.
This will be delivered by the Co-Operative board by driving significant new investment, from within the fan base and community, which will provide the capital to fund this programme whilst working alongside continually developing volunteer resources.
1b. Stockport County Supporters Co-Operative
VISION
“To be the democratic and representative voice of the supporters of Stockport County Football Club, and to strengthen the bonds between the Club and the community which it serves.”
FUNDAMENTAL BELIEFS
Stockport County and its supporters are mutually dependent. Stockport County’s participation in national league football is critically important to the Borough of Stockport. Co-operation is the key to success. Supporters given the opportunity to actively support Stockport County will do so. Supporters aware of the Club’s plan can be empowered to help achieve it. Stockport County’s long-term survival requires that the club be run in a sustainable manner. Stockport County is an important family member of the national game.
OBJECTIVES
To obtain a stake in Stockport County Football Club or its ground, Edgeley Park. To have a Supporter-Director on the Board of the Club, democratically elected by all supporters. To hold the owners to account, and try to ensure that the Club is run sustainably and with mutual benefit for the local community.
PRIORITIES
To be fully prepared to take action towards these objectives should any opportunity arise. To take forward our social goals and community development. To be ready to set up and run a “phoenix” club if needed.
2. Reasons and Problem Statement
Since June 2010, Stockport County Football Club has been owned and run by a consortium of individuals and companies (the “2015 Group”) operating under the company names “Stockport County 2010 Ltd” and “Stockport Community Leisure Company Ltd (Holding)”
At the time they took over the club, it was debt free, full-time and playing in the fourth tier of English football and still without ownership of its spiritual home, Edgeley Park. The current owners have since taken a once proud and successful football club, with over 106 years of competing in The Football League, into the sixth tier of English football, trading with significant debts to both shareholders and trade debtors, and with the club now operating part-time.
The current shareholders and board have made catastrophic errors of judgement which have created huge inefficiencies both on and off the playing field. With fragmented shareholders and failed promises, the club has become rudderless and seemingly without ambition. The unacceptable market performance of a club of our size has led to lower crowds and greatly reduced income streams, as fans become wary and disillusioned by the inept ownership and lack of drive.
The supporters deserve a stable and secure football club, which is run for the benefit of the community, and with a guaranteed long-term future at its traditional home: Stockport County Football Club, playing at, and owning, Edgeley Park.
3. Key Stakeholders
Internal The Stockport County Supporters Co-Operative Members
External Brian Kennedy - Cheshire Sports Stockport County Football Club Supporters The Stockport County Football Club Shareholders The Community of Stockport and beyond Stockport Metropolitan Borough Council
4. Solution Options
4a. Do Nothing
We, as supporters could potentially “do nothing” and stay indebted to our owners and other trade debtors.
4b. Offer to purchase Edgeley Park and become majority shareholders in the Football Club
We have put together this PID (Project Initiation Document) which outlines how we can utilise our supporters and the local community to unite and support the buy-back of Edgeley Park and support the Football Club whilst taking ownership of the majority of shares.
5. Cost Analysis
5a. Offer to Purchase Edgeley Park
Purchase Edgeley Park for £1.75 million
Brian Kennedy/Cheshire Sports to provide the mortgage to secure the purchase of Edgeley Park
To be owned wholly and entirely by The Stockport County Supporters Co-Operative and never be borrowed against
Brian Kennedy/Cheshire Sports to have first refusal on any future potential sale of Edgeley Park over the term of the mortgage
Pay an interest rate of 5% on the annual mortgage payment
Pay 10% of the purchase price and the first year’s mortgage payment on completion
Pay the outstanding debt due from Stockport County and add this onto the life of the mortgage (if necessary)
5b. Offer for Stockport County Football Club
Purchase Stockport County Football Club and its Shareholder Debt for £1
Inform all shareholders that we now have a plan which will remove the need for them to fund any future potential losses of the Football Club
Ask each shareholder for a "debt-for-equity" swap to take a minority stake in the Football Club and relieve them of their current obligations
The offer to each shareholder and/or current Directors to work with the Supporters Co-Operative to deliver this plan and to remain actively involved in the club
All shares transfered in this way to be in the name of The Stockport County Supporters Co-Operative
6. Key Outcomes and Success Criteria
6a. Immediate Benefits
Once Again, Proud Owners of Edgeley Park With the supporters, football club and the ground re-united we can start to shape the future, and allow the club to lay the foundations for generations to come.
New Optimism The announcement of this proposed plan will create renewed optimism and hope for the immediate future and security of the football club. During its delivery, the plan will then confirm the leadership needed to invigorate the club and the local community.
New Investment and Funding Through our debenture proposal (see Appendix A), and budgeted sales (see Appendix B) the supporters will provide the injection of funds that will secure Edgeley Park, and meet the demands of our football club over the coming years. We will be free of relying on one or two individuals and the good will of shareholders. We are the major contributors to our own football club.
6b. Long-Term Benefits
A Strong, Democratically Appointed Board and Strategy By becoming the sole shareholders in Stockport County Football Club, the Stockport County Supporters Co-Operative will utilise its democratic position to appoint a Football Club Chairman, with the correct and proper credentials to lead our club board, and provide us with a core executive group capable of implementing a new business strategy for the club and community.
Shareholder Governance A major part of the structural vision for the club is to create strong governance, to enable full control for the shareholders. Appointed to the club board would be a non-executive group of individuals with no association to the club and the Stockport County Supporters Co-Operative. This group would provide the necessary scrutiny for the shareholders, and report back findings.
Supporter Development (Hon. Club Ambassador) As the shareholders of the football club, the Co-Operative members will be asked to vote on a representative who will immediately take up a position as a non-executive Director on the Stockport County Football Club board. The position would be in recognition of the football club, ground, community and its supporters being one entity.
7. Key Steps to Delivery and Impact Analysis
Season 2015/16 - Deliver Edgeley Park and Stabilise the Football Club Key Objectives
Deliver and secure Edgeley Park for the long-term future of the club and community o Agree purchase price and mortgage terms o Pay deposit and 1st year mortgage payment Stabilise the football club o Request the current shareholders write-off all debt and hand over significant shares to the Stockport County Supporters Co-Operative with immediate effect o Create and appoint a new board of Directors via the Co-Operative democracy o Improve the management structure within the club o Develop and continually build volunteer resources Develop links with SMBC and local services for utilising Edgeley Park o Edgeley Park to be utilised for health and social activities o Complement the services of the local council, and provide support for the community
The impact on the organisation, supporters and community of this proposed change has far reaching benefits, both financial and cultural. The renewed optimism and vigour, along with the plan of delivery, will provide the club with a large boost financially to ensure that the purchase of Edgeley Park can be secured and solid foundations laid.
The ownership of the ground will bring benefits not only to the club but to the needs of the community, with talks starting immediately with council representatives to provide a service for the local area and its residents. Edgeley Park will again become a focal point for the town of Stockport.
8. Key Financial Highlights - (See Appendix B, Detailed Accounts)
The financial statements have been compiled with the best of our knowledge and from publicly available accounts, budgets and forecasts.
They have been scrutinised and accepted by Matthew Fairweather ACMA BA (Hons)/MA
Income
£120,000 - Initial input of Working Capital
£338,400 - Season Ticket Sales (1,800 x £188 avg. per person)
£250,000 - Debenture Sales - "10 year Season Tickets"
Expenditure/Capital Purchase
£242,920 - Player Wages for the Season 2015/16
£175,000 - Deposit for Edgeley Park
£84,000 - First year mortgage payment incl. interest
£37,420 - Administrative Salaries
9. Outline Project Plan and Delivery
9a. Planned Club Hierarchy
Stockport County Supporters Society / Shareholders
SCFC Board
Management
Safety & Football General Media & Book- Ground Manager Manager Keeper PR Mgr. Mgr.
Volunteers
SCFC Board Coop
Chair man Hon. Business Finance Football Governance Club Director Director Director Commitee Ambass ador
Club Secretary
Volunteers
Executive
Non-Executive
Management
Football General Safety & Ground Book- Manager Manager Mgr. Keeper
Staff Staff
Volunteers
Business Director
General Safety Manag &
Shop Media Pitch Ground and & PR Maintenance Maintenance
Volunteers Volunteers
Key Responsibilities Key Responsibilities Club Shop Overseeing social media Key Responsibilities Conference & Banqueting PR strategies Stadium Operations Improve Sponsor Relations Writing reports on Match-Day Staff Source Sponsorships media coverage data Stadium Maintenance Drive Commercial Revenue Website
Finance Director
Book-Keeper
Key Responsibilities Balancing of Accounts Completing VAT Returns Processing Sales, Receipts and Payments
Football Director
Football Manager
Key Responsibilities Improve Results/Playing Standards Develop Squad Recruitment Scouting Network
9b. High-level Timelines (not exhaustive)
Description Date Resource
Project Conception and Initiation Complete Business Plan 5th February 2015 Group Approach Cheshire Sports with Business Plan 5th February 2015 Steven Mottershead Receive decision from Cheshire Sports 26th February 2015 Cheshire Sports Meeting with Club Shareholders 6th March 2015 Dave Schofield Meet with current Co-Operative board 6th March 2015 Project Team Public knowledge – “Media Splash” 6th March 2015 Steve Mottershead EGM for Co-Operative – Vote on Plan 20th March 2015 Co-Operative Board
Project Definition Start Project Plan and Scope for delivery 23rd March 2015 Lee Townley Appoint Interim Board Directors 23rd March 2015 Co-Operative Board Agree Project Plan and Scope 17th April 2015 Co-Operative Board
Project Delivery Project Launch – “Go” 20th April 2015 Project Ownership of the Club 20th April 2015 Project and Coop Officially appoint Interim Board of Directors 20th April 2015 Project and Coop *Complete Edgeley Park purchase* 1st July 2015 Project Democratically appointed Club Chairman 1st July 2015 Coop Democratically appointed Club Directors 1st July 2015 Coop Handover into BAU 1st July 2015 Project
9c. Key Risks and Issues (not exhaustive)
Description – Not enough funds are raised in the agreed time to allow the deposit and first months on the ground to secure mortgage Mitigation – The current group have personally pledged £250k for the initial deposit and first year mortgage, as an underwriting and insurance. However, information and communication is key, with "Town Halls" to be held weekly to ensure full transparency throughout the transition process, whilst ensuring that all media channels are utilised - e.g., newspapers, TV, radio, Facebook, Twitter etc. Impact – High Probability – Low
Description – The current club’s management will release Season Tickets during or before the full negotiations have been completed Mitigation – All stakeholders need to be clear on the deliverables and what is required to ensure that the plan can be delivered before the club releases Season Ticket information. However, if this is not viable we have created a media release which outlines the plan and asks for the supporters to delay the purchase of tickets until all negotiations have been completed. This will not be a request for "boycotting" but a "wait-and-see" Impact – Medium Probability – High
Description – The leak of our plans or rumours start to surface which could potentially harm the negotiations Mitigation – All group members are to be reminded of absolute discretion during the negotiation stage of the process. A media release has been created which is ready to be published should such a need arise. Impact – Medium Probability – Medium
Description – The current shareholders of the football club dismiss the plan and are not willing to write-off all debt owed and hand over the majority of shares to the Co-Operative Mitigation – Communication with the shareholders is critical, and we have plans in place to approach them individually, as well as collectively. They will have access to the plans to allow them to have a full understanding of what their goodwill will contribute to. We will still, however, be committed to purchasing Edgeley Park and becoming the landlords for the Football Club. Impact – High Probability – Low
Description – The collective Co-Operative membership dismiss the plan at the SGM (Special General Meeting) Mitigation – The group will share all details of the plan and remain transparent throughout the process. The plan has been worked in such a way that the targets are attainable and sustainable based upon our current position. However, if the plan is categorically voted against, then the plan would cease. Impact – High Probability – Low
9d. Key Assumptions
Title – Economic Outlook Description – It is to be assumed that the current economic situation within the UK would remain stable and therefore our forecasts would remain attainable.
Title – Customers/Supporters Description – It is to be assumed that the supporters and community will be invigorated by the plan and be willing to contribute where necessary. Levels of attendance would be expected to rise in conjunction with the announcement, and at the very least remain stable.
Title – Staff Description – It is to be assumed that our staffing levels will remain the same in the immediate transitional period and that current members of staff would remain.
Title – Suppliers Description – It is to be assumed that from our plan, that suppliers would be willing to support our strategy and provide the necessary support
Title – HMRC Description – It is to be assumed that the rates of VAT, Corporation Tax and National Insurance will remain at the present levels.
9e. Project Governance
Project Team for Delivery into BAU (Volunteers)
Project Board (Co-Op Board)
Project Owner Matthew Fairweather
Project Manager Lee Townley
SME (Subject Resources Matter Experts)
Appendix A:
New Investment and Funding - Debentures
Debentures will be the source from which The Stockport County Supporters Co-Operative Limited, the fans trust which owns the Club, derives its funds to meet capital expenditure and place a deposit on Edgeley Park.
The Co-Operative is issuing these debenture tickets to fund the deposit on the mortgage for the benefit of its supporters and the community of Stockport. Without the financial commitment of the debenture holders, the purchase of Edgeley Park would not be possible.
For each debenture held, debenture holders receive one seat of their personal choice within Edgeley Park on a matchday for a set number of years. Tickets allocated to debenture holders are tickets that are freely transferable and could be sold on the open market. Hospitality packages will also form part of these exclusive tickets.
Example Hospitality
The use of the Players bar pre and post-match • Seats for all FA Trophy and FA Cup games will be included • Seats will be inscribed with personal or company name • Designated car parking within the main car park (subject to availability) • Debenture freely transferable with club approval • Free use of a hospitality lounge twice per annum for none match-day use • Exclusive and complimentary lunch per annum for debenture holders only • Complimentary web-link per guest per fixture • Complimentary match day programme per guest per fixture • Individual recognition on the 'Wall of Honour' • 15% discount on all merchandise sold within the club shop • Complimentary debenture holder tie/scarf per seat • Complimentary tickets to all development squad and pre-season home fixtures • The option to purchase buffet food to be served within the main hospitality suite on a game by game basis • The option to purchase a 3 course meal within the main hospitality suite on a game by game basis (subject to availability)
Appendix B:
Forecasted Financial Statements - 2015/16 and 2016/17
(See attached Excel Document - "Stockport County FC - Business Case - 2 of 2")
NOT INCLUDED HERE