BY RICHARD CAWLEY
The Dons Trust board recently announced an £11million funding gap for the first phase of building their new stadium in Plough Lane.
A special general meeting was held on Monday by the trust with one of the biggest talking points being proposals to sell off some of the fan-owned club to external investors.
Charlie Talbot – a contributor on The Wimbledon Way blog, which describes itself as wanting to deliver a sustainable new stadium at Plough Lane – gave his verdict on the discussions earlier this week.
It sounds like there wasn’t an appetite for external investment at the SGM?
CT: “All of us are quite conscious we don’t want to be speaking for a fanbase who are quite capable of speaking for themselves. But from that meeting definitely this form of investment and proposal did not have even majority support of the people in the meeting – never mind getting over the 75 per cent barrier you’d need to pass a vote.
“From the people who spoke, there are different levels of appetite from the fans for some form of outside investment. There are some who would say ‘absolutely no never’, some who would say ‘bring it on right now’ and most who are in the middle of the spectrum of those views.
“The key point about this specific offer is that while they would only be wanting a 30 per cent stake, these apparent buyers are insistent they’d have full control over any further share issues. So they’d de facto be ending up with majority control – because they would be able to offer more shares and dilute the share offering at any point.
“This wouldn’t be moving towards the German continental model where a fans’ body have 50 per cent plus one [share] and outside investors come in to 49. This would be selling over all control. It feels like it is one of the major sticking points for a lot of fans who might otherwise be keen on some outside investment.
“Beyond that there was a feeling at the meeting and the fans – of whom I’m one – that to spring this out as the only option after essentially four years of saying it’s all fine – and not necessarily pushing the crowdfunding as hard – means there is a real appetite to see what other routes there are that would avoid this, or avoid external investment at this price in terms of control.
“There was a show of hands indicatively towards a new kind of bond issue – raising more money from fans or private investors, on a debt-basis rather than a selling-shares basis.
“One of the club’s key problems is that even if there was a magic commercial lender who said ‘here’s £10million’ then commercial lending terms would mean paying back about £1m a year, which is putting a strain on everything else.
“You’d be borrowing it at six per cent – even if you could get the loan. If we did a bond through fans at two or three per cent, or perhaps in some cases lower because fans could take a lower interest payment – if we could raise £3m through that then suddenly what you need to borrow is lower and other schemes become possible.
“There’s this idea of a sale-and- leaseback of the ground, which again they’ve started to pursue. There is a possibility of borrowing money against municipal authorities through the public works loans board. Apparently Merton are not a council who does this in general.
“There is probably a patchwork way to approach the total debt shortfall without the repayment schedule and interest payments being as prohibitive.
“The fans at the meeting said ‘we want you to look more at this’.
“As a fan I’m a bit annoyed this wasn’t being done already.
“We’ve jumped from it’s all fine to now we’re going to sell off all control of the club.
“But it’s better that this is happening now [debating the options] than never.
“The hopeful outcome is that if something can be done like that in the short term that it would enable the funding to be in place for the groundwork to continue on schedule, then perhaps there would be time to have a wider debate about changing the structure and bringing in outside investors without having a gun to our head and a ticking clock.
“It’s not particularly my view but it’s pretty clear some of the initial reaction from a fair amount of our fans – particularly younger ones – are all for the idea of selling off to some form of outside investment. That’s probably a debate which needs to be had, but not when we don’t have many cards to play in those negotiations because we are pretty screwed without it, I’d suggest.”
I really hope we can make things work but i believe that all roads with the new stadium lead to investment either now or in next few years.
I hope that the investors soften their deal if we need them as when they come forward i feel many will be very tempted. #afcw
— Stephen Adams (@StephenJAdams) December 10, 2019
Around 300 Dons Bond survey respondents so far pledging an average of £3,200 each (nearly £1m in total already) towards funding Plough Lane. Get involved here… https://t.co/vKRrmSJiT9
— Ray Armfield (@KentWomble) December 11, 2019
When would you get more detail on the current external investors?
CT: “At the meeting it was said – slightly oddly – that they were people you wouldn’t be perturbed by, which is an intriguing choice of words.
“All we’ve been told is it’s three individuals, and each would put in £2.5m. They have got some connection to Wimbledon but aren’t currently fans. At least one or two are supposed to have run local businesses.
“It’s unclear why they haven’t participated in other stuff until now if they really are that interested.
“It was kind of left that the board weren’t going to drag these people out into the open unless there was an appetite to do it.
“But that becomes a bit circular, because some fans’ opinions on whether they’d sell to them depends on who they are. I don’t entirely get that as an argument – because once a club is owned by someone it doesn’t matter who they are, it’s who the next person is they sell it to.
“I assume if the Dons’ Trust felt it was any kind of a goer they’d have to queue up some kind of meeting in January.
“But the mood of the meeting this week was more a case of can we find a way around this? Can we not refinance the debt? Can we not sit down with our own fanbase and get going in such a way that we don’t need these guys right now?
“This initial red line they put on the table – that they’d only put the money in if they had defacto control of it – that struck me as being one of the biggest sticking points for a lot of people.
“Maybe in the background the trust will go back and say ‘that’s not going to fly. You’d have to be happy with only having up to 49 per cent. If that’s a red line, it’s a red line’.”
Imagine walking out the concourse at plough lane and seeing no stands. I’ll be crying for all the wrong reasons if we go ahead with this shitty barebone stadium
— Alex Moss (@alexmoss__) December 9, 2019
Who do you blame that it got to this stage with no warning?
CT: “I’m not sure blame is helpful. We’re up against a significant amount of time pressure. The best thing we could do – and we’ve done it in other times of crisis, going back to 1997 and the first idea of the Dublin movement – is pull together and solve it.
“When we got planning permission then a lot of people were saying: ‘What are we going to do now? Is there going to be a share issue or a crowdfund?’ The message from the club, and therefore the trust, from four years ago was that it was all fine – there will probably be a small one, we’ll borrow the rest – it will all be fine. Don’t worry about it.
“Even a year ago when we knew costs had gone up and Boris [Johnson] had cost us more money, in particular, with all the various delays – there was talk of plans and that it would all be fine.
“The crowdfund last year – partly because it was aimed at a wider audience – many of the fans don’t feel it was communicated clearly how big the jeopardy was. It was sort of presented as ‘this will be nice, put some money into this if you feel like it – wouldn’t that be a lovely, fuzzy thing to do?’ Not ‘if we don’t get £7m out of this rather than £2.5m – which is what we got – we’re really struggling to talk to banks and this could be a big issue’.
“There was a miscommunication and a disconnect, certainly from the start of this year. Through 2019 the board and the club could – without scaring off institutions – have better communciated to fans that we need more help and more ideas here. Whether that was bringing people with better debt and financial experience in on that side or a more direct appeal to members and the current owners -the fans – to put more money in.
“That’s what we’re trying to rectify now. I don’t think it’s particularly controversial to say that could have been better handled.
“We went from saying ‘it’s all fine’ to ‘it might not all entirely be fine’ to ‘oh my god – it’s absolutely terrible’.
“There isn’t an £11m shortfall because they’ve actually got £5-6m of that secured if the other bit was in place.
“The deal in place isn’t actually very good – it’s only £7.5m, which doesn’t solve all the problems in one go.
“If the proposal was that these people are going to pay £11m – all of that gap – and here’s £2m on the team it would mean even if they wanted total control then even those of us who are being quite reticent of our history might struggle to win that argument.
“What is there now doesn’t solve that, it still creates problems.
“There’s probably a bit of time to try and chart a course through it.
“It’s part of the wider debate in League One about clubs improving their grounds. Andy Holt at Accrington talks about this – most owners are almost discouraged from doing it because they don’t get money back from that. Whereas if you throw all your money at going up the leagues then you’re going to kind of see a quicker return.
“Even if we get the stadium done we’re still likely to have one of the lower wagebills. Of course we are, because we don’t have someone propping us up.
“The 50 per cent plus one model is definitely worth looking into- but you’re not going to put that in place by the start of January.”
NEW EPISODE: More stadium finance chat, as the club and Trust respond to some pressing questions. #AFCW
iTunes >> https://t.co/04b4Mwm251
YouTube >> https://t.co/3CCVf3jO2j
Spotify >> https://t.co/D4VfXPCq2s
Online >> https://t.co/iLfbiJgWt1 pic.twitter.com/p16aAdl9VI
— 9yrspodcast (@9yrspodcast) December 6, 2019
AND THE VERDICT ON THE MEETING FROM NICK DRAPER (9YRSPODCAST)
“If there was anything to take away from the meeting, it was that the idea of selling any voting percentage that prevents the trust from having the largest vote share is very unlikely to be accepted.
“The most vocal supporters on Monday were clearly against the idea, although there was some support for speakers who professed their support – most notably, Ian McNay, chairman of AFCW PLC.
“It does appear that the contention has become binary – sell or not sell.
“There is yet to be another option that will yield the cash needed. Fans are looking into ways, but are still unclear as to timescales and what amount would make a smaller loan viable.
“In truth, close to three weeks after the announcement regarding the lack of funds, we are no further forward.
“Whilst the meeting gave platform to differing views, it did nothing to help solve the funding shortfall. As it stands, we are very much in the dark about what the next step is.
“Clarity and decisiveness are needed here: we seem very much a victim of uncertainty and inertia.”