Frequently asked questions
- What are ‘community shares’?
- What’s the purpose of community shares?
- What are the benefits of purchasing Community Shares?
- Will the shares be offered immediately?
- Who can purchase community shares?
- How much are shares?
- How many shares I can buy?
- What if I have already paid the £100 deposit for shares?
- What if I didn’t pay the £100 deposit originally, can I still sign up for Community Shares?
- I want to buy a share but can’t afford £1,000 in one hit. What can I do?
- Will I get a return on my shareholding?
- Can I get my money back in the future?
- Can I buy shares for my children, grandchildren or a minor?
- What happens to my shares if I die?
- Are my community shares transferable?
- Is this the best way to raise this money?
- Have Community Shares worked elsewhere?
- Is my money safeguarded?
- Can I get tax relief on my investment?
- How long have I got to buy my share?
- What liabilities am I taking on as a shareholder?
- Do I need to join the Pompey Supporters’ Trust?
- What voting rights do I have?
- Are there risks?
- When will I receive acknowledgement that my forms have been received and processed?
- Can I purchase a share for my child or as a gift?
- Can I have a different name on the share certificate?
How the deal fits together
- Who are the Presidents?
- So how does PST’s investment in the club work in relation to the Presidents?
- What is the arrangement with Fratton Park?
- Will we stay at Fratton Park, or are there plans for a new stadium?
- Can I remain a member of PST if I don’t have £1,000?
The biggest Community Club in Britain
- How will we still put out a competitive team?
- What will our budget look like?
- What do you know about running a club?
- Do other supporters own their Club?
What are ‘community shares’?
Community shares are offered in PST, a Community Benefit Society registered with the Financial Services Authority as Portsmouth Supporters Society Limited on 23rd December 2009 (registration number 30872 R). The shares are non-transferable, so cannot be traded or sold to a third party but unlike shares in Private Companies they are withdrawable, albeit only at the discretion of the Board of PST.
What’s the purpose of community shares?
As many supporters know we launched a Pre-Share offer in March asking people to deposit £100 in a solicitors escrow account to show their appetite to invest in a scheme which gave supporters involvement in the Club. Around 2,000 people deposited money. Since then we have been patiently waiting for our opportunity to launch a full share offer, but now with exclusivity from the administrator it is the right time.
Community Shares are essentially the way we can raise money to secure the biggest shareholding collectively for supporters. The more money that we raise from community shares in PST the more shares we can collectively purchase in Portsmouth Community Football Club Limited the Company which is intended to hold the Football League share, enabling Pompey to continue to play in the Football League. We believe a majority shareholding can be achieved based on the number of deposits from supporters in the pre share offer.
What are the benefits of purchasing Community Shares?
The overriding reason is that it is a social investment that enables a route for the Club to be under supporter control, giving all Pompey fans the chance to look after the Club we all love.
This will ensure that local businesses can deal with us without the fear that they will not be paid.
After a number of years second-guessing what will happen to our Club, we have the opportunity to influence how it is run, show the football world and the City of Portsmouth what a difference we can make, and protect and grow the history of the Club for future generations of Pompey supporters.
On top of that collective benefit for the Club we are keen to reward people that do financially back the takeover through the purchase of shares in PST, which is why we are working on some exclusive benefits which we intend to offer (depending in some cases on the success of the bid and financial state of the Club) These include:
- Discounted season ticket options for the 2013-14 season and beyond
- Discounted half-season ticket option for season 2012-13
- Discount on function room hire at the club
- Exclusive shareholder pin badge
- Your name inscribed in an exclusive ‘wall of fame’ to be erected at Fratton Park
- Frameable individually numbered share certificate
- Special priority draws - including for every home match four tickets to be drawn to be a ‘VIP for a Day’
- Exclusive Pre-season ‘open day’ at Fratton Park for all shareholders, including meet the players, PST team and Club Management Team
- Free membership of PST
Will the shares be offered immediately?
Yes. Now that we have signed heads of terms with the administrator PKF, we are confident that PST alongside the Presidents (a group of wealthy Pompey fans more below) will own the Club. The extent of PST’s ownership will depend on how much money we raise through the share offer.
Who can purchase community shares?
Anyone! As long as you are over the age of 16.
However, if you wish to buy a share for a young person see the answer to the question: Can I buy shares for my children, grandchildren or a minor? below
As well as individuals incorporated bodies and firms may apply. Some supporters have set up syndicates. Contact email@example.com and we can advise you.
How much are shares?
The minimum purchase is £1,000.
We appreciate this is a significant amount for the majority of supporters but by stretching ourselves now it will mean we can turn round the fortunes of the Club quicker, and build the Club from a firmer financial footing.
If PST can convert these pledges from the off it gives supporters the foothold and the level of control Pompey fans want over the Club.
How many shares I can buy?
An individual can purchase a maximum of £20,000 of community shares.
What if I have already paid the £100 deposit for shares?
We had a fantastic response from supporters, with around 2,000 paying a £100 deposit to show their appetite of purchasing a minimum of £1,000 of shares when our opportunity comes.
Now that it has arrived you will notice in the share offer document that there is a separate application form for the remaining £900 to be paid as well as an opportunity to increase your commitment to purchase more than the £1,000 minimum should you wish to.
What if I didn’t pay the £100 deposit originally, can I still sign up for Community Shares?
Yes there is a separate application form for you to fill out in the offer document, and we’d love for new participants to the scheme to step forward. We have had a number of people say to us that they didn’t pledge originally because they wanted to wait until we had a deal in place to buy the Club. Thankfully that time has arrived and these shares will be issued on the same terms as those that pledged from the start.
To purchase shares you can find the offer document on the Community Pompey website (ww.communitypompey.co.uk) or a hard copy of the offer document can be obtained at all match days from the ‘Trust Bus’.
If you’d like a copy sent to you directly please email firstname.lastname@example.org.
If you have already pledged then the offer document will automatically be mailed to you - please be aware because of the demand it may take a week or so for these to arrive, so if you are eager to invest downloading the offer document from ww.communitypompey.co.uk is the quickest way.
I want to buy a share but can’t afford £1,000 in one hit. What can I do?
To make the scheme affordable we have set up a finance partnership with DotComUnity; a local Credit Union. More information can be found at: http://www.dotcomunitycreditunion.org.uk/members-support/pompey-supporters-trust/.
Failing that don’t forget that buying a match ticket whenever you can really makes a difference. Every additional 1,000 people who attend games over a season will generate £400,000.
Will I get a return on my shareholding?
No. The shares PST will collectively hold in the company Portsmouth Community Football Club Limited will not pay any dividends - any profit will be kept as reserves or reinvested into the Club. Likewise the shares that the Presidents hold in Portsmouth Community Football Club Limited will also not pay any dividends.
We want the money that the Club generates to be reinvested back into the Club and not paid to shareholders, be they individuals or PST.
Can I get my money back in the future?
Potentially yes, although there is no guarantee. PST community shares are withdrawable with the consent of the PST Board. The Board will not be able to consent to withdrawals before 2016 and there is no certainty, given the challenges the club faces, that withdrawals will be possible thereafter. Withdrawals will be made possible through the continual investment of new participants and by building up the reserves of PST. Withdrawals will be limited to no more than 5% of the total ‘Community Share’ capital in PST in any one year. Requests to withdraw shares will be considered by the Board in the order of receipt by the PST Secretary of written requests. The Board will decide on requests having regard to the long term interests of PST, the need to maintain prudent reserves and PST’s primary commitment to community benefit.
Can I buy shares for my children, grandchildren or a minor?
At present almost all Community Benefit Societies (like PST) have chosen to have a minimum age requirement to be a full voting member of 16 years old.
Community Shares can only be held by full members so if an adult wanted to buy shares for say their Grandchild or son or daughter they would need to be held on their behalf by the adult until they reached the age of 16, with those shares being transferred to the minor when they reached the age of 16.
As the shares would legally be being held by the person over 16, the £20,000 limit would still have to be observed, so for example someone couldn't hold £20,000 of community shares themself and then another £1,000 on behalf of a minor. There would be no additional voting right for the individual holding shares for a minor, and the individual holding shares would need to remain a member of PST (which is fine as long as they retain £1,000 or more of Community Shares as individuals investing this amount have lifetime membership of PST).
The transfer to the new holder when that person reached the age of 16 would normally be agreed but still be subject to that person being admitted as a member of PST, as shares may only be held by members.
PST will record this in its register of community shareholders that certain shares were being held on behalf of someone else.
If you are interested in purchasing shares for someone aged under 16, please get in contact with us. We shall need you to fill out a specific form to recognise this gesture. Please email email@example.com.
What happens to my shares if I die?
The PST rules allow for community Shares to be transferable on death so can be bequeathed (left to another person in their will).
Are my community shares transferable?
We should have been made it clear in the prospectus that Community Shares in PST can be transferred with the consent of the Board of PST.
Is this the best way to raise this money?
We believe so, yes. It raises money:
- In a collective way so that supporters have more control through PST
- In an environment where we can determine when we repay it, so not to put the liability on the PST
- In a cost effective way utilising the knowledge of Supporters Direct and their advisors
Have Community Shares worked elsewhere?
Yes. Community Shares have proven very successful as a means to raise capital finance across a range of industries. Since 2009 over £20 million of capital investment has been raised in areas such as renewable energy, community owned shops and even pubs. This success is starting to spread to football with two significant (but very different) schemes well underway.
- FC United of Manchester have raised £1.7 million in ‘community shares’ towards their new stadium in Moston from a membership of just over 3,000.
- Wrexham Supporters Trust recently launched a community share offer at the end of last season after taking ownership of their Club and have already raised £120k to provide working capital for the Club.
Is my money safeguarded?
Our share offer is exempt from the Financial Services and Markets Act 2000 or subsidiary regulations; this means you have no right of complaint to an ombudsman. A community benefit society is registered with but not authorised by the Financial Services Authority and therefore the money you pay for your shares is not safeguarded by any depositor protection scheme or dispute resolution scheme. As the whole of your purchase of shares could carry a risk, please consider it carefully in the context of the complete share offer document, and if needed seek independent advice.
Can I get tax relief on my investment?
In the ‘Community Share Pre Issue Information’ leaflet (see ww.communitypompey.co.uk) we mentioned that the offer might qualify for tax relief from Her Majesty’s Revenue and Customs, under the Enterprise Investment Scheme (EIS), although there was no guarantee. After further discussion with our tax advisors unfortunately EIS is not possible.
How long have I got to buy my share?
The offer will remain open until such time as the PST Board decide to close it, but the sooner you contribute the better. The shareholders agreement gives us the opportunity to buy an unlimited number of shares through PST for 1 year. The quicker we can raise this money, the sooner we can buy and invest for infrastructure and new players in the Club.
What liabilities am I taking on as a shareholder?
As the shares are issued by a corporate body, you have no liability beyond the value of the shares you buy. On the solvent dissolution or winding up of PST, holders of shares will have no financial entitlement beyond repayment of paid-up share capital. In an insolvent dissolution or winding up some or all of the paid-up share capital will not be repaid. You have no further liability.
Do I need to join the Pompey Supporters’ Trust?
To participate in the scheme you need to become a member of Pompey Supporters Trust (PST). Given that lifetime membership of PST is provided to all individuals that invest and maintain a minimum investment of £1,000 in community shares, if you are not already a member you will automatically become one if your application for shares is successful.
There is an expectation that investors will remain members of PST whilst holding community shares. Membership of PST remains open to individuals who don’t purchase Community Shares but there are additional benefits and voting rights that Community Shareholders will have to recognise their financial commitment.
What voting rights do I have?
Where a vote is held at a meeting of members of PST on any question relating to:
- Issuing more share capital in Portsmouth Community Football Club Limited
- Transfer of shares in Portsmouth Community Football Club Limited
The Board of PST will not act on any vote unless it has been passed by the requisite majority of all members and the requisite majority of community shareholders.
The ‘one member, one vote’ ethos of PST will remain for all PST decisions, including those related to the scrutiny of and accountability for the running of PFC. The full rights and responsibilities of members is laid out in the rules of PST which can be viewed at ww.pompeytrust.com.
Are there risks?
The offer document contains forward-looking statements that are subject to risks and uncertainties, in particular statements regarding our plans, goals and prospects. PST’s and the club’s actual results and operations could differ materially from those anticipated in such forward looking statements as a result of many factors including the risks which are described in the offer document. These statements and the assumptions that underlie them are based on the current expectations of the PST Board and are subject to a number of factors, many of which are beyond their control. As a result, there can be no assurance that actual results will not differ materially from those described in the offer document.
When will I receive acknowledgement that my forms have been received and processed?
Due to the fantastic response from fans we are currently processing a large number of pledge conversion and new share purchases forms. For this reason it is proving difficult to acknowledge each application. We will however send acknowledgements on a fortnightly basis by email. Thank you for your patience.
Can I purchase a share for my child or as a gift?
Yes you can. It is important that all forms are completed in the name of the individual paying for the share, this is to ensure we conform with financial legislation. If however the share is for a child or a gift for an adult please ensure there is an accompanying note that makes this clear and includes the name the proposed shareholder.
Can I have a different name on the share certificate?
Yes this will be possible. Please attach a note to your pledge conversion or share purchase form highlighting the name or names to appear on the certificate. Please be aware that at the time of printing this may be limited to a certain number of characters and it may be necessary to contact you if this is the case.
How the deal fits together
Who are the Presidents?
To enable a route to ownership being in the hands of the supporters we are very grateful to have the financial support of some wealthy Pompey supporters willing to individually invest in excess of £50,000, known as Presidents. As there are statutory provisions which affect the value of shares that can be held by one individual in Community Shares in PST, the Presidents have invested directly into Portsmouth Community Football Club Limited – the private limited company that holds the membership with the Football Association and The Football League.
The Presidents have signed a shareholders agreement which gives them the right to appoint up to three Directors to the Board of Portsmouth Community Football Club Limited. In addition, those of the first Presidents who invest £200,000 or more in shares in the club are entitled to sit on the Board. All Presidents will have access to a special lounge on match day.
The intended number of Presidents is limited, but there are still a opportunities if you are interested please contact firstname.lastname@example.org.
So how does PST’s investment in the club work in relation to the Presidents?
Under the shareholders agreement to which PST and the Presidents are party, PST has the right to buy an unlimited number of shares in the Club (Portsmouth Community Football Limited) for a period of one year. PST also has the right to appoint up to three directors of the club. Initially they will be Ashley Brown (PST Chair), Mick Williams and Mark Trapani.
The shareholders agreement provides for special rights for shareholders in the club which depend on the percentage they own of the total share capital. There are thresholds under the agreement and under company law at 10%, 25%, 50% and 75%. These rights benefit both PST and the Presidents.
A useful guide to the typical rights of shareholders can be seen at the website below
The shares in Portsmouth Community Football Club Limited carry no right to dividend which means all the money stays within the Club.
For PST to become the majority shareholder we will need to hold more shares than the collective shareholding of the Presidents. As things stand at present a majority shareholding would cost £1.826 million. Based on the number of deposits from supporters in the pre share offer we can meet this target and there has been a great deal of interest from others who didn’t pledge originally who we would also love to financially back this landmark moment for the Supporters at the Club.
The Presidents, and anyone wanting to become a President, have the right to apply to buy additional shares in the club and this would mean that the sum to be raised by PST would have to increase to match their investment.
An application by them to buy additional shares would have to be agreed by the board of the Club by reference to the best interests of the Club. The directors appointed by PST would have a vote but, in the event of a disagreement, would not be able, acting on their own, to prevent additional shares being allocated to these investors.
The reality is that this opportunity would not have been possible without the financial support from the Presidents to reach this stage, and we have a great working relationship.
They like us would like nothing more than to see Pompey supporters take up this landmark moment to collectively own our Club.
What is the arrangement with Fratton Park?
To make this deal work, PST has selected a Hampshire property developer as its strategic partner. In the short term they will buy back Fratton Park and lease it back to PFC at an affordable rent, with a secure buy-back option and if there is future development at Fratton Park the Club will benefit financially. Our lawyers Verisona have worked hard to secure Fratton and we believe we are well protected.
In an ideal world some would argue it would be better if we still owned the stadium. There may be some truth in that but previous mismanagement has left us with no alternative, and we believe this is a good one for the long term future of the Club. Were the amount raised by PST to exceed expectations, this would be our first priority.
The last professional football club to be taken over by supporters in the English Pyramid was Wrexham in December last year. As part of their takeover the ground was sold to a third party – in this case Glyndwr University. They are thriving with a deal that is good for both parties and that’s what we believe we have with our partner, Stuart Robinson.
Will we stay at Fratton Park, or are there plans for a new stadium?
In the longer term we shall look at ways to buy back Fratton Park, as well as work with the property developer to improve the club’s infrastructure. PST recognises a significantly improved stadium is vital to the club’s future prosperity and its ambitious aspirations for the Club.
Furthermore we believe that any development of Fratton Park for the benefit of the Club and supporters, is more likely to take place if the Club is owned by supporters as our model of ownership appeals more to stakeholders that we need support from for developments to happen.
Can I remain a member of PST if I don’t have £1,000?
Yes. Membership of PST remains open to individuals who don’t purchase Community Shares but there are additional benefits and voting rights that Community Shareholders will have to recognise their financial commitment.
The biggest Community Club in Britain
How will we still put out a competitive team?
Our model is based on spending what we earn, but that doesn’t mean we won’t be competitive. We will remain competitive on the pitch by being more efficient with the money we have and turning the goodwill of supporter ownership into increased income levels. This can lead to a variety of increased revenues such as bigger match day attendances, more sponsorship, a bigger volunteer supporter base, more buy in from strategic partners and increased investment and fundraising.
In recent seasons we have seen the likes of Swansea City, Blackpool and West Brom get promoted to the Premier League spending what they can, beating rivals who were close to bankruptcy and losing tens of millions. The rules of the Football League are changing in our favour too, to further support Clubs that don’t overstretch financially with penalties for Clubs in the Championship overspending to reach the PL, including taxes to be distributed to Clubs that do it right. With salary caps in League 1 and 2 loans can no longer buy you players and pay wages your income doesn’t support
You can read more about these Financial Fair Play measures here:
What will our budget look like?
Portsmouth Football Club can’t continue to lose money, nor do we believe it has to
A summary of the finances appears in the offer document, and a more detailed set of financial projections with commentary will be added shortly.
What do you know about running a club?
There are a number of ways to look at this question.
Firstly it is easy to confuse what ‘running a club’ really means. We will still employ an executive team to run the Club, and we will be able to draw on the experience and time of our members and the community to support these paid roles. The executive positions will be employed by and be given direction by the Club Board.
The initial Club Board members have been appointed by a combination of PST and the Presidents.
Initially PST will be represented on the Club Board by Ashley Brown, Mark Trapani and Mick Williams, with the Presidents represented by Iain McInnes and another representative from the presidents to be confirmed All of these individuals have been Pompey supporters for life, understand the identity of Portsmouth and have run their own businesses and/or have held important positions in large companies which turnover far more than the football club.
Do other supporters own their Club?
Yes, although should we achieve a position of PST owning the majority of shares in the Club we would be the highest placed Club in England owned or controlled by supporters.
Currently AFC Wimbledon, Wycombe Wanderers and Exeter City in League 2 are majority owned by their supporters, along with Wrexham and AFC Telford United in the Football Conference. Dundee in the Scottish Premier League are the UK’s first top flight Club majority owned by supporters.
Just like a lot of things when it comes to football we are playing catch up with Germany, where all bar 3 of their Clubs are owned by their supporters. Barcelona and Real Madrid are owned by their members. Perhaps most impressive of all the Green Bay Packers, World Champions an NFL record 13 times are the only non-profit, community owned professional sports team in the whole of the United States. They thrive on being supporter owned, and too have relied on share issues that don’t change the ‘community ownership’ of the Club.
As better regulation arrives with the introduction of Financial Fair Play in the Premier League (currently for teams who want to compete in Europe but recent reports suggest PL teams are close to agreeing a similar system) and Championship, and the Salary Protocol Management System in League 1 and 2, the emphasis on how well a Club is run, and in particular its engagement with supporters will give us a competitive business advantages over our rivals. That’s not to say we haven’t got challenge ahead but we can get ahead of the curve and are in a better position to realise the benefits of supporter engagement.
Supporters Direct who we are members of have produced a briefing paper which further highlights some of the business advantages we can target to sustain the success using examples from other Clubs
Who have PST been working with on the takeover of the Club?
We are pleased to have been able to work on our bid with a range of partners;
Taylorcocks is an Accountancy Age ‘Top 100’ form of chartered accountants and chartered tax advisors who specialise in the provision of high quality accountancy and tax solutions
Verisona is a law firm offering both broad and niche legal services to business and individual clients from offices at 1000 Lakeside, Portsmouth, Havant and Waterlooville
Begbies TraynorBegbies Traynor is the UK’s leading business rescue, recovery and restructuring specialist, providing a partner-led service to stakeholders in troubled businesses
Cobbetts are recognised as experts in law relating to supporters trusts (like PST) and co-operatives. They developed the original model rules for Supporters Direct and have advised the PST Board on the community share offer.
Supporters Direct was formed in 2000 as an initiative of the UK government. Their goal is to promote sustainable spectator sports clubs’ based on supporters’ involvement and community ownership. They specialise in community share offers for sports clubs and have advised and supported PST during its inception and since then and on the production of the offer document.
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Page 4 of the share prospectus claims that PST ownership will deliver "a new level of appeal to sponsors, increasing attendances and match day spend". What % increase in each of these core revenue streams has been built into the budget?
This season’s average attendance is calculated at 11,500, Year Two plus 6.5% and Year Three plus 8%. Each of the key revenue streams have been assessed separately. The Year One starting point for each has actually been reduced from the previous year and the majority kept flat in Year Two. We have allowed for marginal (single figure) increases in most areas across years 3 and 4, however in general we have taken a very conservative approach on revenue increase. Our expectation is that we can significantly improve on our budgeted figures.
Page 6 of the share prospectus says that "The majority of the PST Board are elected by the membership". Why not fully elected? Is this to be the case going forward?
The PST Board has the power to co-opt additional members if it feels they have a skillset which will enhance the work of the Board. See the rules of the Trust for more details.
Page 6 of the share prospectus says "We want to recognise the individuals who purchase shares by giving them benefits at the club." What "benefits" do you envisage? If these are discounts, have they been built into the financial model? E.g. if 20% discount on season tickets, then has 20% been taken off 2,000 season tickets?
These benefits have been worked into the financial model. The list of benefits is on Page 12 of the brochure and also in the FAQ on www.communitypompey.co.uk.
Page 6 of the share prospectus indicates that it is possible that the club will be majority owned by "the Presidents". How could such a scenario be described as a "community club"? Isn't this just a consortium of local businessmen purchasing the majority shareholding with the PST simply helping them to get the keys to the boardroom?
It is intended the Trust owns the majority shareholding in PCFC Ltd but it is important to point out the Presidents are part of the ‘community club’ concept, which is a tag-line reaching beyond a simple majority Trust shareholding definition. All bar one of the Presidents are Pompey fans and have elected to be part of this project with no expectation of recouping their investment, let alone making any return on it. For the Trust to have a majority stake, that relies on fans converting their pledges or buying shares. It is true that theoretically the Presidents could end up with the majority shareholding, but this scenario would only occur after the time period the Trust has been given to raise its money. However, should the Trust not raise sufficient capital, the more likely outcome is that the club would be liquidated.
Page 7 of the share prospectus says that the sale & leaseback arrangement contains a "secure option allowing the club to buy-back the stadium in the next five years." What does the contract say if the 5 years elapse?
It is conceivable that funding won't be available within 5 years to purchase outright, as lenders may be reluctant to lend against a football ground (ultimately it isn't a very liquid asset). The original concept would have allowed the Trust to purchase Fratton Park outright. However, the re-working of our financial forecasts to cover amounts owed to football creditors meant it quickly became obvious we were unlikely to be able to raise sufficient capital from fans to do this from Day One. Two main alternative options were considered to finance the purchase of the stadium. A loan to the Trust was approved in principle by Portsmouth City Council in August, but the strings attached made this ultimately an impractical solution. The decision to instead work with Hampshire property developer Stuart Robinson is a strategic one. In the first instance he is leasing the stadium at a very affordable rent, rising to a commercial rate only in Year 5. Secondly, Stuart also intends to purchase the land surrounding Fratton Park and work with the club to redevelop that land – subject to planning consent - and provide the land needed to the club and a contribution towards developing a stadium fit for the 21st Century, which the club desperately needs. We have a ten-year lease on Fratton Park (this length was on the advice of our lawyers to allow for renegotiation in our favour) but the intention is that PST will have re-acquired the stadium for the club long before then, as part of the deal outlined above.
Page 7 of the share prospectus says that "The ethos of 'one member, one vote' will remain at the core of PST's activities." How can this be the case when the business model is that c.50% of the equity & a minimum of 50% of the seats on the board are being given away to wealthy people?
PST’s ‘activities’ are not directly PCFC Ltd’s activities. PST is an Industrial and Provident Society which works on the basis that all members have an individual vote on relevant matters. For instance, all PST members are able to vote for PST Board members, who are accountable for their actions at the AGM. PCFC Ltd will operate as a limited company in which the Trust has a majority shareholding. Nothing is being ‘given away’ to wealthy people. The people are predominantly Pompey fans, who are putting collectively more than £1.5m in equity into the club to ensure it survives. Without their contribution Pompey would have almost certainly been liquidated by now.
Page 7 of the share prospectus says that the Presidents will have 3 seats on the board of the acquisition company (Portsmouth Community Football Club Ltd), plus a seat for anyone putting in more than £200k. Page 10 says that PST (i.e. the £1,000 shareholders) get to elect 3 seats on the board. So the best the £1,000 brigade can hope for is 50% of the seats on the board, but more likely, less than 50%. If the Presidents are as altruistic as we are lead to believe then why do they need a seat on the board?
Those investing more than £200k are ‘entitled’ to sit on the board. Both of the investors in that category have declined to take up their option at present, but may do so in the future. The Presidents are, in the main, Pompey fans who are investing significant sums of money in the club and none of them are banking on seeing their money come back, let alone a return on it. However, it is only right and proper they have some ability to influence how the club is run through seats on the Board, in fact we welcome their involvement as their skills are invaluable. Without the investment of these individuals, the PST-led bid would not have been viable and the club would almost certainly have been liquidated by now without their support. The make-up of the Board has been designed to ensure a range of skills are represented to make the running of the club as cost-effective as possible. The core protection of the Trust’s interests in PFC is through the articles of the company and the shareholders’ agreement.
Based on the answer to Q7, page 10 says that the board can allow for more shares to be sold to the Presidents. If the board is more than 50% controlled by the Presidents, then would the PST not agree that it has very limited power to actually regulate this process, and the Presidents could quickly, and relatively cheaply dilute the PST?
The PST would not have funds to do anything about this as it would need to match the money going in to retain % shareholding. According the Trust’s lawyers, the articles of the company and the shareholder agreement protect the Trust against the scenario outlined occurring. We must assure you that we have had multiple sets of lawyers spend many hours ensuring the interests of all shareholders are protected.
"Shares cannot be transferred or sold". Presumably this is shares in PST, not in PCFC Ltd?
The revenue raised by fans buying shares in PST enable the Trust to acquire, it is to be hoped, a majority shareholding in the club. Individuals are investing directly in to PCFC Ltd. PST shares can be transferred with the approval of the PST Board. This was an omission from the Share Prospectus but is covered in the FAQs on the communitypompey.co.uk website. The Presidents are also restricted regarding any share transfers, albeit certain transfers within families are allowed. Other transfers will require board & possibly majority shareholder approval.
Page 8 of the share prospectus shows a 19% growth in revenues between the 2013/14 & 2014/15 seasons. What is driving this growth? Considering that it is likely that we will be playing in League Two, with no guarantees of promotion back to League One, how is it considered prudent to show such growth?
Initial ‘due diligence’ undertaken has indicated that there are a number of areas, including hospitality and merchandising, which are currently providing a poor return for the club. In consequence, it is felt that there is the potential to drive significant revenue growth in those areas. A more detailed review of the club’s operational activity is currently underway to help the new club Board better understand how this increased revenue can be achieved. In addition the model anticipates increased attendances / season ticket sales as the club re-connects with its fan base. The business model assumes League 1 football for the next five years. In practical terms relegation does not have a huge impact on external revenues (eg TV money) and a successful side in League 2 would, more than likely attract larger gates than a struggling League 1 club.
What happened to the difference between having the pay the former players the £9m and the fact that the PST had only put aside c.£3m? Has this renegotiation been scrapped? If yes, how has the gap been bridged?
The ‘gap’ has been bridged by the re-worked financial forecasts we have produced. The initial forecasts, based on the £3m figure budgeted for, have been significantly remodelled (in reality this means cuts in expenditure). For example, original forecasts included £2.75mto purchase Fratton Park. The current forecasts work on the assumption of paying football creditors in the order of £8.8m over four years.
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