The largest supporter-owned club in England

A settlement was reached on Wednesday, allowing the Portsmouth Supporters Trust to buy Fratton Park, clearing the way for them to take control of the stricken League 1 outfit.

But how will the Pompey model work, and what are the benefits of fans owning their club? Here, The Daily Echo looks at some of the questions...

How is the deal being financed?

About £2m has already been pledged by supporters, via the purchase of ‘community shares’ in the trust.

These cost £1,000 each, with fans able to make a maximum contribution of £20,000. Initially, supporters were asked to deposit £100 to display their intent to buy a full share, with around 2,000 people doing this. Approximately 60 per cent of the pledges are said to have been fulfilled already. More money has come in since Wednesday’s court hearing. This is backed up by investment from wealthy individuals, who have put in about £1.5m through contributions of £50,000 or more. These fans will be known as “presidents”. In addition, property investor Stuart Robinson, who has been working with the trust, has bought the land surrounding Fratton Park. A loan from Robinson and also a short-term bridging loan from Portsmouth City Council, totalling around £2.65m, will be used by the trust to buy the stadium. Football creditors will be paid in full using about £9m of parachute payments, while unsecured creditors are likely to receive a few pence in the pound.

When will the club come out of administration?

Work has already begun on the necessary paperwork that will allow the trust to complete their purchase. Contracts were exchanged last month and it is hoped the deal will go through by the end of next week. Once Pompey exit administration, the Football League will transfer their ‘golden share’ (which is effectively their right to compete in the league) back to them. However, a ten-point deduction awaits them, meaning they are facing relegation to League 2 at the end of the season.

How will the club be structured?

The aim is for the trust to become the majority shareholder in the club. To achieve that, they must control more shares than the collective holding of the presidents. It is estimated this will cost about £1.8m. On a day-to-day basis, the club will be run in a similar way to most others. There will be a board, with initial members appointed by a combination of the trust and the presidents. Three trust members will sit on it, while long-time Pompey fan Iain McInnes, who has contributed a six-figure sum, will become chairman. The presidents also have power to make two more appointments, while anyone who invested more than £200,000 is entitled to sit on the board if they wish. An executive team will also be employed.

Will supporters get a return on their shareholding?

No. The ‘community shares’ purchased by fans will not pay any dividends. Neither will the shares held by the presidents. Any money the club generates will be re-invested back into Pompey.

Will the club make a profit?

The trust are confident they can run Pompey as a profitable business. They stress their financial model is based on spending what they earn, and not accruing debt. They plan to “turn the goodwill of supporter ownership into increased income”. The trust hopes to see an increase in season ticket sales, bigger attendances, more sponsorship and a large volunteer support base, as well as increased investment and fundraising. In practical terms, relegation to League 2 should have little impact in terms of revenue from television, while the trust are confident a successful side in the fourth tier will attract bigger crowds than a struggling team in League 1. They also believe the model of community-ownership will be a beneficial one as an era of financial fair play dawns in football.

Are there any other examples of fan-owned clubs?

Yes. Exeter City, Wycombe Wanderers and AFC Wimbledon all fall into that category in the English leagues, although it is a rare occurrence on these shores, where a benefactor model, or one of corporate ownership, is common. On the continent, a co-operative model is far more familiar, with Spanish giants Barcelona one such example. No one person or business owns the club, with it instead belonging to its some 180,000 ‘members’, who have the power to elect their own president.

Fan ownership is also rife in the thriving German Bundesliga, which provides incredible value for the paying supporter. In the Premier League, 20 per cent of Swansea City is owned by the club’s fans.

What are the advantages of fan ownership?

It means the club cannot spend beyond its means. So, while money may not always be in rich supply, fan-owned clubs are often far more stable and transparent financially. Research conducted by Supporters Direct also suggests it creates a far stronger connection between the club and its community, creating better relationships with local authorities, businesses and potential sponsors. It is also suggested that it makes the supporters feel a far more valued part of the club, encouraging greater attendances and involvement.

What are the disadvantages of fan ownership?

Firstly, it relies on the continued support of the fans over a sustained period of time. If this can be achieved, and there are plenty of examples to suggest it can, then perhaps the biggest challenge is competing on an uneven playing field with other clubs. While the benefactor model in England can prove potentially ruinous for clubs, it has also allowed some to spend far beyond their means and essentially buy success. There is no way for a supporter-owned club like Pompey to be able to compete with such spending. But the trust hope the introduction of new financial regulations in football will place more emphasis on prudent management and, therefore, strengthen their position.