Salford fan shares and financial issues.

[LeytherRob]

Interesting move for Salford going fully down the fan ownership route, which I'm assuming means the touted takeover by Gerrard is off the cards now. 

I am curious to see how this works, I'm assuming the share purchases are one off payments which does seem like this is more of a short term fix, however I know this has been successful at some lower league football clubs so maybe there is something I'm missing.

 

One concerning detail i saw picked up on loverugbyleague was Paul Kings article here in the tribune about the share issues, with the below quote taken from it(link for full context).

https://tribunemag.co.uk/2023/04/saving-salford-red-devils/

But despite all of these successes, the club still has no money. In recent years, we have lurched from cash-flow crisis to cash-flow crisis, planning from one payday to the next, even at times unsure of our continued tenure at our present home, the AJ Bell Stadium.

As I write this article, my house is sunk as security on a loan that is keeping the club afloat. The truth is, behind the scenes, a team of fans and staff alike have been holding the club together, keeping things above water at inordinate personal cost—and the truth is we’ve nearly run out of road.

It doesn't paint a very good picture and this/the council loan seem to be really at odds with the long term deals being signed by the higher profile players at the club.

[Zilla Budgie]

Mmmm, so why hand out an 8 year deal to your star player?

[Ragingbull]

Interesting move. I know other clubs in other sports around the world have similar models. I must admit i dont really understand completely how it works.  

Can anyone provide any more detail. 

If i want to by a single share i pay my x amount. What do i get out of it as a share holder? 

What extra benefit does someone get who buys 100 shares as opposed to 1 or 2.

Do share holders have to buy shares every year or put their own cash in to fund the club. 

Im not having a dig at Salford its more im not totally sure how it works.  Any extra info is appreciated 

[LeytherRob]

15 minutes ago, Ragingbull said:

Interesting move. I know other clubs in other sports around the world have similar models. I must admit i dont really understand completely how it works.  

Can anyone provide any more detail. 

If i want to by a single share i pay my x amount. What do i get out of it as a share holder? 

What extra benefit does someone get who buys 100 shares as opposed to 1 or 2.

Do share holders have to buy shares every year or put their own cash in to fund the club. 

Im not having a dig at Salford its more im not totally sure how it works.  Any extra info is appreciated 

Reading up on the Salford site, it's a one share, one vote scheme so on vote regardless of the value invested. Different tiers just seem to have the benefits you'd associate with corporate sponsorship. I found some more info here

https://www.crowdfunder.co.uk/p/salford-red-devils

 

 

 

Looking at FCUM that also operate as a CBS however shares are a subscription payment rather than one off like Salfords.

https://fc-utd.co.uk/membership

 

[Jughead]

It doesn’t sound good but they always seem to find a way to keep above water. 

[dealwithit]

1 hour ago, Zilla Budgie said:

Mmmm, so why hand out an 8 year deal to your star player?

Transfer fee for when he is poached

[RigbyLuger]

2 hours ago, Zilla Budgie said:

Mmmm, so why hand out an 8 year deal to your star player?

Hubris?

[OnStrike]

The model does seem to work at a couple of other places, AFC Wimbledon being the most obvious example.

I'd imagine it would limit things a bit, but at least they're trying something to try and a) make the club sustainable b) make sure it is rooted in the community and the community feels it belongs to them.

I'd rather that than some ego maniac 'buisness man' who could pull the plug any minute, sell your ground to property developers, load your club with unsustainable debt, use it to launder money, or the 101 other similar things that have happened to football and rugby league clubs in the past.

Good luck to them, I hope it works.

[Angelic Cynic]

A slight concern that it comes one month after a loan of 350k from the council.

https://www.placenorthwest.co.uk/salford-moves-forward-with-plans-to-buy-peel-out-of-aj-bell-stadium/

As it is,it may be timed perfectly. 

Best wishes to the people running the club - supporters.

[Henson Park Old Firm]

1 hour ago, OnStrike said:

 

I'd rather that than some ego maniac 'buisness man' who could pull the plug any minute, sell your ground to property developers, load your club with unsustainable debt, use it to launder money, or the 101 other similar things that have happened to football and rugby league clubs in the past.

 

sounds like my mates ex-wife

[Saint Toppy]

9 hours ago, Zilla Budgie said:

Mmmm, so why hand out an 8 year deal to your star player?

Because the club knows its deep in the doggy doo and their only option to bring in large cash amounts when the cash completely runs out is to sell off star players, hence why they've tied down several of them to long term deals. The likes of Croft, Dupree & Ackers will all be able to get decent transfer fees to keep the club afloat at least for another year.

[Toby Chopra]

1 hour ago, Saint Toppy said:

Because the club knows its deep in the doggy doo and their only option to bring in large cash amounts when the cash completely runs out is to sell off star players, hence why they've tied down several of them to long term deals. The likes of Croft, Dupree & Ackers will all be able to get decent transfer fees to keep the club afloat at least for another year.

Unless they refuse to move and the club defaults on their contracts, and then they move for free. It's a risky game to play.

Fan ownership is definitely an option for sports clubs, but in Salford's case I can't quite see how it brings the club to sustainability. It will bring in a one-off cash infusion that will keep the bills paid for another couple of years, but unless that period also sees a substantial increase in matchday revenues it won't fix the fundamental problems. 

It feels like both the council and the directors are saying they're no longer willing to subsidize the club indefinitely, so now it's over to the fans to make it work.

Indeed, the if club did eventually get relegated, perhaps being fan owned at that point would mean a less drastic decline than seen at other clubs.

[AB90]

11 hours ago, Zilla Budgie said:

Mmmm, so why hand out an 8 year deal to your star player?

Let’s be honest, what are the odds Croft plays for Salford for the next 8 years! I would be shocked if he’s still playing for them by 2026.

[AB90]

1 hour ago, Saint Toppy said:

Because the club knows its deep in the doggy doo and their only option to bring in large cash amounts when the cash completely runs out is to sell off star players, hence why they've tied down several of them to long term deals. The likes of Croft, Dupree & Ackers will all be able to get decent transfer fees to keep the club afloat at least for another year.

Yeah it’s blindingly obvious their plan is to sell Croft at some stage of that 8 year deal. That’s the business plan to keep them afloat.

Daft to even think that Croft will be playing for Salford in 2030.

[Saint Toppy]

4 minutes ago, AB90 said:

Let’s be honest, what are the odds Croft plays for Salford for the next 8 years! I would be shocked if he’s still playing for them by 2026.

I'd be surprise if he's still there in 2024 let alone 2026. If he doesn't get a good NRL offer he'll end up at either Leeds, Hull, Wire or Catalans who would all probably be willing to stump up a big transfer to fee to get him.

[To Be Confirmed]

Croft deal has break clauses at the end of every season which is is well documented. 
 

It is also well documented that once the sale of the stadium goes through and Salford council are sole owners the club will generate much more income from matchdays providing a larger income stream. 
 

This share option is not a new thing and has been doing the rounds for a number of years, the MD of the club is not a mega rich businessman he is just a fan who is having a go! Wanting the community and fans to all buy into the same journey. 
 

hopefully this is the start of a long and sustained future for the club which will allow us to grow. 

[OriginalMrC]

Actual ownership shares or crowdfunding? I'm not clear on the difference any more 

[LeytherRob]

I've been doing a bit more digging on this through the community share document they've put together and it looks like unless the initial £250k target is reached by 5th June any investments will be returned. The first £250k is also set to go on wages for playing staff/commercial staff.

12 minutes ago, OriginalMrC said:

Actual ownership shares or crowdfunding? I'm not clear on the difference any more 

 

 

 

 

[Jughead]

Salford think they’re an A grade?! 

[BladeHearts]

Foundation of Hearts – New Website

Heart of Midlothian the biggest fan owned club in the UK... £15m raised so far!!!!

[Oxford]

So, where do you draw the line between good natured banter, essential and understandable fan rivalry and wishing fellow fans and clubs nothing but harm?

It seems to me some fans would only be happy if RL was left with their own and 6-7 others so there'd be someone to play!

Except it's already been invented, it's called Subbuteo!

so has this

"wishing nothing but harm"

It's called social media.

 

[LeytherRob]

34 minutes ago, Jughead said:

Salford think they’re an A grade?! 

I think they're hoping this £250k will help them be, but it'll take a lot more than that. £250k disappears very quickly in RL and with this not being a subscription model i think it would take some incredibly smart investment and a great deal of luck to turn what's likely to be a one time cash injection into sustainable long term funding.

[LeytherRob]

2 minutes ago, Oxford said:

So, where do you draw the line between good natured banter, essential and understandable fan rivalry and wishing fellow fans and clubs nothing but harm?

It seems to me some fans would only be happy if RL was left with their own and 6-7 others so there'd be someone to play!

Except it's already been invented, it's called Subbuteo!

so has this

"wishing nothing but harm"

It's called social media.

 

There is a difference between wishing Salford harm and discussing whether they are in danger and the extent, and i can only see the latter on here.

[gingerjon]

25 minutes ago, LeytherRob said:

I think they're hoping this £250k will help them be, but it'll take a lot more than that. £250k disappears very quickly in RL and with this not being a subscription model i think it would take some incredibly smart investment and a great deal of luck to turn what's likely to be a one time cash injection into sustainable long term funding.

This is my only issue with it - it surely needs to be a recurring/subscription model or else they will need to do the same again very soon.

[Ragingbull]

1 hour ago, LeytherRob said:

I've been doing a bit more digging on this through the community share document they've put together and it looks like unless the initial £250k target is reached by 5th June any investments will be returned. The first £250k is also set to go on wages for playing staff/commercial staff.

 

 

 

 

Hang on, they are trying to raise £250k from fan investment to be able to pay players and staff? Sounds like they are in big trouble. 

I have not so fond memories of clubs asking fans for bail outs. Its the start of a downward spiral. 

I really hope they find another way out of it.

Edited April 25, 2023 by Ragingbull