Eleven years ago an unassuming revolution took place in Devon. There were no triumphant shouts of proclamations of the new regime. Instead a dedicated group of volunteers grimly rolled up their sleeves, surveyed the damage in front of them and got to work. Now, over a decade since the Supporters’ Trust was invited to take control of the battered and near-critically wounded Exeter City, another potential revolution is in the offing. It’s even more bloodless and yet could end up killing the very thing that many City supporters treasure – fan ownership. It’s no exaggeration to say that the future of the Trust is at stake over the coming weeks. Currently under a transfer embargo, things could get a lot worse for the Grecians over the coming weeks.
The challenges of fan ownership mean that a club of Exeter’s size will always be at a financial disadvantage to some of the division’s big spenders but the last few seasons have been particularly unkind to Exeter. Relegation from League One followed by missing out on the playoffs the season after and a battle against relegation this season has led to plenty of glum faces at St. James’ Park. Off the field, postponements, failure to progress in cup competitions and no recent player sales has stretched finances. But this is a fan owned club. Should it not be living within its means?
The answer that has unravlled over the past week is that the Trust is most emphatically not in control at Exeter City. And if recent events are anything to go by, it could be ousted and killed off, dumped by the side of the road like a mafioso hit. Twohundredpercent has previously highlighted worrying questions that the club and Trust had to answer. Now those answers have emerged, there are even more worrying questions that need answers urgently.
It’s worth taking a moment just to explain the governance structure of Exeter City. It may not be exciting but it lies at the root of this crisis. The majority shareholder is the fan-run Supporters’ Trust. They have a board of society (BOS) which is made up of elected members, most of whom are volunteers. Two members of the BOS also sit on the Exeter City club board, which is made up of individuals employed by and appointed by the club as paid employees and experts in their field. The idea is that the Club Board takes the day-to-day commercial decisions with the approval of the Trust members on the board. Should the Trust object to a club’s decision, as owner they can theoretically veto it. In theory this should work harmoneously.
The reality is rather different and starkly illustrated by two key parts of the current crisis at City. Firstly, the Club Board took out a PFA loan of £100,000 to cover player wages for the summer. The conditions of this loan place the Grecians under a transfer embargo until it is paid back. This in itself is alarming, although also not entirely uncommon for financially stretched clubs and is a marginally better alternative to spending cash the club doesn’t have. What is less common is the Trust claim to know nothing of the loan being approved and were under the assumption the club would ask for an advance from the Football League, although this is an equally worrying development as it can eat into cash flow for the subsequent season and is a favourite trick of desperate chairmen.
Taking aside the rights and wrongs of advancing or loaning money, the most alarming part of this saga is the breakdown in communication between Trust and Club. When the decision to apply for the loan was taken, the Trust representative on the board was out of the country, yet the club pressed ahead without informing the Trust, who only discovered the loan has been taken nearly a week later. No effort was made to communicate to the Trust.
Less dramatic but potentially more concerning was an attempt by the club board to remove the Trust’s ability to appoint independent directors on the Exeter City club board. In the minutes of the May meeting it was noted that the club had proposed to remove the Trust’s majority vote from the Club Board Appointment Committee (CBAC), meaning the owners would essentially have no say in appointing directors, veering majorly away from the principles of a supporter-owned club. This change was presented to the BOS as something to be noted and passed. The BOS were less happy and in a rare display of rebellion against the club, voted down the proposal.
The rhetoric from the club board in recent weeks has sought to blame the ownership model for the financial crisis, while there have been subtle digs at the overall fanbase from some of the management team. Certainly, reading between the lines, the message from the club is that the Trust ownership model is not fit for purpose. It seems that the relationship between the Club and Trust has broken down and it is now the Club who are in charge, paying lip service to the notion of fan ownership when it suits then, while the actual owners, the Trust seem unable or unwilling to confront those in charge over mistakes that have led the spiral into another financial disaster at St James Park.
It is a situation that reflects well on nobody. The Club has blamed the postponement of the Wycombe and Morecambe games this winter along with poor season ticket sales for the shortfall, yet if this was the case it should have been apparent from February onwards that there were financial difficulties ahead over the summer months and still nothing was done to tackle this. Meanwhile, the Trust seem paralysed at challenging the club and almost unaware of the severity of the financial situation. That they were unable to send a representative to a crucial financial meeting and were powerless and uninformed about the PFA loan does not reflect well on the BoS, far less the BoS individuals who were willing to sacrifice the Trust’s ability to veto CBAC appointments.
This may sound jargon heavy but this is how those passionate about fan ownership have been replaced by technocrats. In truth, the seeds were inadvertently sown during Exeter’s 3 season stay in League One. Many of the original BOS members were forced to stand down due to Trust rules limiting them to six years in office (or a maximum of two terms on the board). As a new, more inexperienced BOS was shaped, the decision was made to split the chairmanship of Club and Trust in order to bring in more outside, salaried staff who could move the club into a more professional footing and, in one specific example, work with the local authorities on stadium redevelopment or relocation. It seemed like a sensible move to grow the club at the time and entirely in keeping with the ambitions to reach the Championship; in hindsight it was more akin to Jar Jar Binks giving Emperor Palpatine supreme power, although no one could have known this at the time. It’s inevitable that a Trust with no real blueprint or example to follow will make mistakes. It’s how they react to the mistakes that’s the key.
So the Trust stands at a crossroads. Many original active members have drifted away, disillusioned or apathetic. Many once loyal fans are cancelling their Trust subscriptions in protest or renouncing their season tickets, even in the knowledge that this will further injure both Club and Trust. If the Trust wants to survive it has to take decisive action and even that may be too late. The Trust has been pumping increasing amounts of cash into Exeter City to keep it afloat and recently put in £60k of short term loans. Cash reserves, which were intended to go no lower than £30k currently stand at £15k.
If the will is there the Trust needs to decide, as the owners of Exeter City, if the current Club board are the right people to be running the club. If they are, then both sides need to mend fences urgently and work together to solve the current crisis. If not then the Trust should exercise their power and remove them even if it leads to short term difficulties. And if the Trust do nothing, then there’s every possibility that one of the original leading lights of the fan ownership movement will slowly wither and die, killed by backroom meetings.
This is an insightful and balanced view which one hopes will help galvanise the rank and file Trustees to seek the help they have so desperately needed for a very long time. Thank you.
I see one Trust Board member is already attempting to undermine this excellent analysis, which has a couple of minor errors but is otherwise spot on.
If the Trust had been honest with the membership, had kept them informed, and had not rolled over and let the Club Board tickle their collective tummy in the last few years we wouldn’t need articles like this.
The future of Exeter City as a Trust-owned club is under threat because of the efforts of the Club Board to run it as if they were the owners. They MUST be resisted.
From this article this sadly looks to be an issue of a weak governance structure compounded by the perennial problem of Supporters Trusts – their voluntary nature. Questions have to be asked about the quality of the business experience of those on the Trust Board.
If Trusts are to take over a club, they need to up their game and become more professional in their approach to managing a club board – which means looking to their own structure and maybe taking the time to get the right advice for their own governance before appointing people who can effectively sideline them. Funds would maybe well spent on appointing a business advisor who works solely for the Trust itself, for instance. A proper governance structure maintaining the right relationship between Trust and club board can then be put in place. Why, for instance, was there not an agreement that there would be no quorum for club board meetings without a majority-vote-wielding representation of the Trust?
The football business itself is struggling with the notion of fan ownership in general. Appointing ‘football people’ to run your club can be a back door entry for sharp or short-sighted, short-term practice to re-emerge in the name of expediency, such as the practice the loading of debt into the future. This has been the destructive financial model for many football clubs – a practice that the Supporters Trust movement rigorously opposes.
The Trust Board’s role must surely be that of vigilant, informed, critical friend to the club board. They need to be the guardians of sustainability. A role that needs to be enshrined in both the Trust’s and the club’s governance structure.
FYI, in the interests of transparency I’ve made a few corrections as I realised there were a couple of errors in the post. Trustees can only stand for 6 years, not 8 (that was a typo on my part). I’ve clarified that to say six years or two terms, which is what is strictly is.
I also initially named CEO Guy Wolfenden on the club board – he’s actually not part of the board, so I’ve removed this (that’s an error on my part, I’d always thought he was). I’ve actually removed that section as I think on reflection it’s probably unfair to name one or two people as solely responsible, especially Wolfenden who hasn’t been in the job long.
So apologies for the small amends – mea cupla. I’ve tried to do as much background on this as possible, bit irritated I made a couple of silly errors.
If you’re interested in reading further, the minutes on the Trust website are quite interesting.
For what it’s worth, I would rather the Trust and Club would work closer together. However, whether the relationship is too fractured, I’m unsure. And I don’t think it’s an exaggeration to say that is the status quo is maintained then Exeter City is in serious trouble. Either make a move for private ownership, which would be a crying shame but one way out (doesn’t appeal to me but may well save the club) or the Trust make a decision to replace the club board and endure a lot of short term turbulence.
Well written article, shame Mr Conway, felt the need to slate it on GNet. He is also part of the problems of ECFC.
The whole problem stems from the amateur hour committee men that set up the original structure of the Trust and who have infested the Board of Trustees ever since. There was no foresight, in the real world we assume sharks are swimming just under the surface, the mob that have allowed ECFC to be set up for the Suit takeover still refuse to accept that any of the current debacle was their fault.
Every member of the Board of the Trust that has ever sat around interminably talking drivel and drinking tea should hang their heads in shame, I am talking particularly about, Terry Pavey, Al Yates, Paul Morrish, Roger Conway, Andy Cole, Adrian Hitchcock, Pete Martin and a whole host of other faceless drones who all talk a good game but never did anything to stop this happening. They all had chances to bust the Suit’s balloon but they all kept quiet claiming collective responsibility or commercial sensitivity to justify the secrecy, well that was all bollocks as some of us have always said, the Trust should have been open and honest, all the information should have been available to all the members all of the time, now we are up Poo Creek again without the necessary again but this time we have ‘football debts’ including a £300k buy out charge on the manager who got us where we are through his own pig ignorant stubborn attitude, backed up by Tagg and Perryman drawing their huge wages for doing gawd only knows what. These blood sucking leeches should have been brought to book years ago yet we have to put up with this useless shower consistently blaming the fans for them being unable to do their own jobs to any kind of acceptable standard.
We are in huge trouble due entirely to the selfish mismanagement of the club by everyone concerned, inept on field, inept off field, inept governance and the abject apathy of the fan base.
Bottom line is that we the fans really have no one else to blame, we allowed the purveyors of torpor to burrow in deeper than Louisiana ticks, some of us moaned but actually did nothing, we have got exactly what we deserved, I 4-1 will never watch the team again if Tagg, Tisdale, Perryman and the rest of the leeches steal my club.
Apologies if this seems a bit haphazard in commenting – am in the process of moving house and picking up comments when I can.
Somebody’s forwarded on a response from the club secretary, which I think it’s important to put on here regarding the CBAC:
“This discussion arose as part of the work to modernise the Club’s Articles of Association, a project that has already taken over 2 years and is now pretty close to achiving it’s objectives. The EXISTING structure of the CBAC is to be incorporated into a separate agreement between the club and the shareholders. This EXISTING structure comprises of 2 Club Board members and 2 Trust Board members with the Company Secretary as a non-voting recorder. At the quoted meeting one Trustee said that he felt that the majority shareholder should have a majority on this committee and that was the incorporated into a note that has been refered back to the drafting group. No withdrawl of any existing rights, no attempt to disenfranchise the Trust as implied by Gary’s paragraph, just another stage in a democratic process.”
It’s certainly not quite how I read the minutes or how others I’ve checked with view it either and it’s clear the BOS have concerns otherwise they wouldn’t have rejected it but I appreciate there is a lot of technical heavy governance stuff that goes into this. Really happy for other members of the board to comment below as well.
On a separate note, I’d rather not descend into name calling if possible. Some will have pretty strident views on who is responsible and who shouldn’t be anywhere near the club, but I’d rather not go down that route if possible. Thanks.
The comments made by Poultice in my name are inaccurate and wrong. I was Chair of the Trust in 2001 and actually stepped down from the position in 2002, as I was very unhappy with the direction the organisation was taking. I lodged complaints with David Boyle with Supporters Direct at the time and have recently lodged more this week.
I have been activist for change since that time. I will not be held liable for this mess. At times urban myth seems to become the truth. As it stands I do not believe in the values of this Trust, after the changed the core principles of loans to donations. I have also tried to become re-elected to office, but found my papers were rejected on a technicality. Despite offering more than the required members numbers and being out of the country when they opened the small window for papers.
As it stands we need a commercial orientated investment group to take the lead that holds the core values of fans ownership at its core. Until the club will continue to struggle. To conclude, my name should not be associated with a mess that since 2002 I have not been linked to, i have maintained my membership at the minimum rate for some years only to get priority tickets for games.
Up the City
Alistair Yates
Founding Chair of Trust 2001-2002
Is the fan-ownership model sustainable? Maybe we’re just seeing the inevitable death-throes of something that doesn’t work long-term.
We saved the club and it was was all lovely for a while as we moved forward but perhaps there’s a limited number of enthusiastic and suitably experienced volunteers, maybe it works in a progressive situation but not in a downturn, which of course in an inevitable part of football. I don’t know the answers to this but I know that I’m guilty of much wishful starry-eyed thinking at the start of the Trust.
It would be a model to change football into a lovely friendly accountable, local, democratic, warm and cuddly system to banish the sort of businessmen who take over a club and change their name or shirt colour. But perhaps the old rich chairman model is the one that works best in the long term in British football.
What is clear though is that we don’t have that option at the moment. The ‘club’ are in fact a load of local people just like the fans. They are not bringing any money into the equation. They just happen to have jobs at the club.
I have heard that Tisdale is in fact wealthy enough to run the club himself, and has privately discussed the possibility of doing so at his fabulous home in one of the priciest villages in Wiltshire. Good or bad idea? Probably bad in my mind.
Until there is the option of some private individual financing the club then the Trust is all we have. We are back in the days when the club’s owners had been carted off to court and we faced extinction unless we tried something radical. We tried it and it has sort of worked. This excellent article suggests it’s time for Trust Mk II. I hope there are the right people to guide it into place.
Of course the fan ownership model is sustainable.
What isn’t sustainable is the continuing overspending by clubs, mainly on players to get promoted or sometimes merely to survive in the league they are in.
If “everyone” lived within their means then the players at the top would get less money and the effect would trickle down.
If the top clubs stopped hoarding the decent young players then they would simply play for their local clubs.
As a Wimbledon fan we are in the same position. We have one of the lowest budgets in League 2 and barely survive. The day we spend more than we have to go up or stay in this division and lose fan ownership I am off, with many others too.
The whole game is diseased from top to bottom so there is no easy solution but fan ownership is not the problem, the rest of the game is where the problems lie.
Jertzeedon on June 8, 2014 at 10:20 am
This post above is absolutely spot on.
There is too much money in the game at the top level (you can thank Sky TV for that), and it is only getting worse.
Surely at some point the bubble has to burst? I hope and pray for the day that it does – it won’t be nice for those teams at the top end of the leagues who will have MAJOR financial problems if it does.
But at least the gulf in finance, and therefore ability to compete, would be all but eliminated.
Of course, my fear is that it would just be a cycle, as happens in the “City”, where nothing would be learnt and eventually wages, TV payments, etc. would spiral out of control again…….there would just be a gap of a few years between the last bubble and the start of the next one…………….
H