#Fansmakeclubs – Supporting FAQs
What’s the point of a fighting fund?
We’d love to be in a position where we knew exactly how much money we need to save and rebuild the club. Unfortunately right now we are in the dark. Having a fighting fund allows us to raise money to be better prepared for every eventuality, should the right opportunity present itself.
HUST would only look to spend this money on a solution that meant the long-term survival of the club.
Realistically that means that HUST, either on its own, or with likeminded partners, needs to find a suitable resolution. That means navigating a way through the current debts and contractual liabilities that are leading to the losses, and being confident that the money raised provides the club with enough breathing space not just to see out a month but to turn around the business.
What might happen to the club?
There are really 3 main possibilities of what might happen, including one we don’t want to think about…
- A new buyer is found who purchases the majority shareholding from Sage, and all the liabilities that come with it. The buyer could be HUST, it could be a consortium that includes HUST or it could be a deal that HUST is not part of.
2 .The club is placed into administration (normally by a creditor like HMRC or one of the Directors), which means an insolvency practitioner takes charge of the club’s affairs to rescue the Company and get a better deal for the creditors than if the Company was liquidated. This can buy time, but can be an expensive process both in paying the fees of the practitioner and for the sanctions from the National League for an insolvency event. A new buyer can come to an agreement to repay creditors and with the National League and take ownership.
Again the buyer could be HUST, a consortium that includes HUST or something HUST isn’t involved in.
3. The club is liquidated, thrown out of the league and a new club must reapply to the FA/league and reform at no higher than step 5 of the non-league pyramid for next season.
How will we know when to part with the money?
We hope that HUST will be able to enter into a Non-Disclosure Agreement (NDA), so that HUFC will release key financial information to the Trust and its advisers, Supporters Direct (SD). This information will include detailed accounts and budgets for the club as well as details of its liabilities and contractual commitments to players and other parties.
It is hoped that this information will be made available in the very near future allowing SD to prepare a report to the HUST board. This report will address a range of issues including the following.
- Advice on how the club can operate sustainably, based on a review of the club’s budgets and identification of the cost savings which may be required in order to achieve this.
- Assessment of the net indebtedness of club and advice on options to manage or discharge such debt.
- Estimate of the scale of investment likely to be needed to acquire control of the club and provide essential working capital.
There have been unconfirmed reports that the club is currently incurring losses of the magnitude of £150,000 per month. Clearly such losses are unsustainable without the support of an extremely wealthy benefactor and, if proven correct, urgent remedial action is required.
Moreover, and bearing in mind that the club is enjoying a £490,000 distribution from the EFL in its first season following relegation, the scale of expenditure giving rise to these losses has not been translated into performances on the pitch with the club presently struggling in the bottom half of the league following early exits from both cup competitions.
As a Supporters Trust, HUST (if needed) has an opportunity to pitch for extra funding from the Premier League Fans Fund to help with professional fees to conclude a deal which might for example include due diligence or other legal fees.
As soon as SD has reported to the HUST Board, it is proposed that a summary of the key findings of the report will be made available to trust members and the wider supporter base. We hope that we will have been granted the opportunity to purchase the club and this information will then support the community share offer to raise the necessary funds to save the club. We would expect a short window hence the more we have already on deposit the easier it will be to progress a bid.
What if a new owner does come in to take over the club?
No doubt all supporters welcome new investment at this very troubling time. Should a new owner come forward then the Trust board would seek to meet with the new owner as soon as possible to discuss all opportunities for supporter representation in the running of the club. The Trust commit to only ever use this Fund to deliver the Trust’s aims and all money raised will be ring fenced to achieve this purpose either immediately or at some point in the future.
Can we really be successful with a supporter led club?
Although the Vanarama National League is an intensely competitive league, many of the member clubs operate on a financially sustainable basis and the league has been proactive in introducing rules which encourage financial restraint. SD’s report will include a section benchmarking HUFC’s financial performance against other National League clubs. Publicly available financial data for clubs at this level is limited and tends to be slightly out of date and so the report is likely to rely on National League club accounts for the 2015/16 season. A similar exercise undertaken for the 2014/15 season disclosed the following summary information for the 23 clubs publishing information for that period.
|Profit/ (loss)||Net assets/ (liabilities)||Loan balance|
|Highest loss making club||(2,964)||(2,891)||(5,058)|
|5 next highest loss making clubs||(2,344)||(12,818)||(13,327)|
|17 other clubs||268||(753)||(4,270)|
|Total (all clubs)||(5,040)||(16,462)||(22,655)|
The highest loss-making club (Forest Green Rovers) did not achieve promotion that season and of the two clubs promoted (Bristol Rovers and Barnet), the latter club fell within the 17 other clubs and reported a small profit for the year. The results for those 17 clubs were within the range of £255k profit to £95k loss. Two clubs (Grimsby Town and Macclesfield Town) made up £3.99m of the aggregate £4.27m debt for those 17 clubs.
The message is clear, namely that operating sustainably does not prevent clubs from performing competitively at this level. The task is unquestionably challenging, especially for a club such as HUFC adjusting following relegation. However the benefits of community ownership should create opportunities for the club that aren’t the same for a club owned privately: engaging with supporters and the local business community should have a positive effect on both match day and commercial income while access to support from volunteers might unlock cost savings. Alongside these opportunities a new club board would however need to introduce greater financial discipline in order to operate sustainably.
Examples of supporter owned clubs who are performing creditably at this level and above include Wrexham, Newport County, Exeter City, Wycombe Wanderers and AFC Wimbledon.
How did the club get in this mess?
The club was founded in 1908 and has never been in a more unstable position, both on and off the pitch. On the 11th January 2018 those currently managing the club released a statement asking potential new owners to come forward, and finally admitted that Administration is now a real possibility.
Two individuals were jailed last year for fraud in connection with their attempted purchase of the club in 2014. Of the three owners during the past four years, one allegedly ran up a million pounds of debt while leading the club out of the Football League for the first time in our history. The director of that owner, who was a former bankrupt, immediately declared himself bankrupt again after the club was passed on the club to the current owners. They have now said they cannot provide further funding and need to find a way out.
None of this is the fault of the fans, and their hard work has already seen a huge rise in awareness of the club’s plight. Through cash donations and the expected increased attendance at our next home game by football supporters locally and up and down the country, we hope that the club has been given a lifeline for the next few weeks.
This will only be a short-term fix but might make the difference whilst the bigger issues of sustainability are identified and resolved. The club still requires new investment or could fold in the coming months.
What so special about HUFC?
This is a real community football club with a long history and a passionate fan base. Despite this being our first season outside the Football League, we continue to attract home gates of over 3,000 and recently took 2,185 fans to an away game even though we sit in the bottom half of the Conference.
This is football club with a dedicated following; in 2002 the town angered local politicians by electing the football club mascot, a 7 foot monkey named H’Angus, as their new mayor. True we might not have a successful history or a glamourous reputation, but we’re a much loved and well-supported community club, and to our supporters Hartlepool United is everything – and without Hartlepool United Football Club, Soccer Saturday will never be the same again.
Who are Supporters Direct?
Supporters Direct (SD) have helped save over 100 clubs since their formation in 2000. They have facilitated more than 50 clubs (predominately English football) to become supporter owned, as well as helping another 20 to have supporter directors.
In recent years they have become experts in raising money through a type of crowd funding called community shares helping raise £7 million across 14 different clubs. By way of example in the summer of 2015 working with the Newport County Supporters Trust they helped raise £237k in a month through a community share offer which led to the Trust taking majority control.