MOTHERWELL have given fans six months to prove they can make their community-ownership scheme work – or else they will seek external investment to avert a financial crisis.
The club set the Well Society a target of raising a £1.5 million cash reserve when they launched the fan ownership vehicle two years ago, but the group has raised less than £450,000 in membership fees with fewer than a fifth of season-ticket holders joining up.
In the meantime, the club posted losses totalling about £780,000 for the seasons 2011-12 and 2012-13 and expect a loss “moderately in excess of six figures” for the most recent campaign, when Stuart McCall’s side were second in the Premiership for the second season in a row.
The Well Society was promised the 70 per cent shareholding donated by former chairman John Boyle if it raised £1.5m to protect the club during a period of sustained losses, but the Fir Park board are now exploring ways of raising money elsewhere, which could include selling those shares to a private individual. And they will push ahead with raising external capital if the Well Society does not hit the £800,000 mark by the end of November. The ultimate aim still remains £1.5m.
A Motherwell statement read: “In all circumstances we will do everything we can to ensure that the future fan ownership of the club can become a reality. But we will have to consider all proposals put to us.
“We urge all fans of the club to recognise the reality of the financial situation we face and to do anything they can to assist the club urgently.
“We recognise that our on-the-field success and the generally positive culture and atmosphere at the club has meant that there is no perception of ‘crisis’ and therefore no imperative or urgency for many otherwise deeply loyal supporters to join.
“While we are not yet at a ‘crisis’ position, we are flagging that we require to take action now to ensure the continued financial stability of the club. This action will either mean a substantial increase in resources towards our reserve or a very substantial reduction in our expenditure. This latter would have the inevitable impact of diminishing our competitive capabilities on the field and creating a negative financial spiral. The consequences of this latter route are only too familiar to all supporters of the game in Scotland.”
The statement added: “If the target figure of £800k is achieved by the end of November 2014, the plan of fan ownership can be a reality. This can only happen if those who support this aim act now by joining or contributing further to the Society.”
The board point to a number of factors for the annual losses, including declining attendances, falling league revenues, lower commercial income, redistribution of money to the lower leagues and the mid-season reduction in prize money for second place last season, which meant Motherwell paid out more in bonuses than they made in extra prize money.
The Well Society bought £150,000 worth of shares last year to help the club through a cashflow problem and gave them a short-term loan of £230,000 this year. But the club, who have retained McCall’s playing budget for next season, also had to take out a £125,000 loan from a private company.
The club’s current chief executive Leeann Dempster is due to leave at the end of the month to begin the same role with Hibernian.