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davidg

10000 Hours Q&A Thread

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Folks,

While it is not terribly practical to answer questions on a piecemeal basis just now we will start to go through some of the previously posted questions on this and the offical forum that can be answered in a more straight forward manner, in order to clear up some easily resolved queries.

We will have some online Q&A sessions shortly and the public meetings which will be a better forum to deal with some of the more complex questions and concerns.

We all appreciate your patience and the fact that many are really giving the issue considerable thought and articulating some worthy questions.

10000 hours

Mods, is there any chance that this thread could be altered/merged with another thread so that it was exclusively conversation about/with 10000 Hours?

I feel a bit embarrassed when I see the 10000 Hours Representative having to read through some right nonsense. I know I’ve posted some silly stuff before but if I was the aforementioned representative, I’d be cringing at the language and personal nonsense going on in here and wondering why I was involved in helping out a Football Club supported by some silly boys and girls.

Following this suggestion I have merged the 2 threads running on the Club buy out and the CIC 10000 Hours.

Please keep the all club buy out and 10000 hours discussion to The original thread here.

Feel free to ask direct questions only on this thread, if you want to discuss the Q&A's copy and paste them to the original thread.

It may seem like a pain but it keeps things tidy and allows people to quickly read through questions and find answers without having 60 odd pages to go through.

Thanks to 10000 hours coming on and answering some questions, there's no guarantee that he will be able to answer the question you might have but you are far more likely to get an answer if you post it in here were he doesn't need to search through 100's of posts looking for questions.......

Edit- I have been cutting and pasting the questions into here along with the answers from 10000 hours.

Edited by davidg

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Question

somner9, on 15 April 2011 - 09:44, said:

the one board member that 10000 hours gaurantees the other 48% shareholders will have is on the 10000 hours members board

Incorrect.

Is 10000hours controls the 52% then as noted in the document (within the rules noted) a simple majorty of the 48% can elect 1 director.

This will be to the board of St Mirren FC.

Only CIC members (individual, corporate and community) will be able to be elected to the CIC elected members board

10000hours CIC

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Question

somner9, on 15 April 2011 - 09:44, said:

i think what's confusing the issue is the 10000 hours document doesn't make it clear that there are TWO boards being discussed

invest 10k in 10000 hours

and hey presto are back on the board!.............. but probably only a real cynic would think that, and also a cynic would probably flag up that any profit made by 10000 hours can be paid to community members

Answer

This could happen.

Anyone that choses to become a member in any of the categories can stand for election, but they have to be elected in the process there is no "hey presto" about it, no automatic right of sitting on either the 10000hours board or the club board.

10000housr CIC

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Question

steve_the_saint, on 15 April 2011 - 10:53, said:

Although Atkinson said he hasn't been taking a wage and wouldn't take a wage from being on the board - did he mean the members board or the club board?

I'm unaware if the current board are taking a wage from the club or are doing it for free?

10000 Hours Answer

No wages will be paid to Atkinson from either the members board or the club board, and none have been paid historically

The current board take no wages from the club

Edited by davidg

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Question

Bud the Baker, on 16 April 2011 - 19:18, said:

£860k was the figure listed as owed by the club to various organizations in the last set of accounts (May 31, 2010).

In your information document you say

So has this debt been repayed or do you mean something different?

CIC answer

Accounts of any organisation take a snap shot at a set point in the year.

At any point in time the club is owned money by some and owns money to others, and it is this along with some other accounting rules when applied to a set of statutory accounts that can give the impression that any debt is bank debt. It is not.

Without getting into too much detail perhaps it would be better to clarify the document description as meaning there is no "traditional bank debt"

The club has no borrowings from any bank.

It is this fact we are referring to. In that unlike is some other football businesses where every time the club earns some additional money there may be a bank asking for their slice this is not the case at St Mirren.

When you exclude depreciation. The club is now on a level footing meaning that any extra money the club can earn through being controlled by the CIC can be used by the club for whatever its board (voted on by the majority sharholsing controlled by the CIC) deemappropriate, one would suggest that increased player budgets would be something appropriate.

10000hours CIC

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animal, on 17 April 2011 - 18:17, said:

I wish someone would explain to me how this bar is going to contribute hard cash profits to the CIC and/or the Club.

Then allow us to try and help.

animal, on 17 April 2011 - 18:17, said:

As I understand it, it will be open before and after home games. That would be about 25- to 30 'events' a year. Plus maybe the odd funeral !

It will be open before and after game for the CIC members. But will become an important part of the business plan for both the CIC and the club, and an important part of the plan for a number of the community members of 10000hours. It will be used a number of times a week not just on match days

animal, on 17 April 2011 - 18:17, said:

It's a long time (about 15 years) since I worked in the hospitality industry but I can't see how this can make any real profit.

Please be assured that a significant number of the 10000hours team have both historic and current experience in the industry and that they are all very happy about the potential for the sort of flexible space that will be created within the void to make some very real profit.

animal, on 17 April 2011 - 18:17, said:

Given that its fit out costs (a five figure sum, I suspect) will have to be paid back over a period of time and its trading / opening times will be so limited.

It will indeed require a significant amount of money to fit out this space. However firstly 10000hours CIC already has the development of this in hand should the deal conclude and secondly that while the opening times as a match day bar will be limited, the usage of a high quality flexible space is expected to be high.

animal, on 17 April 2011 - 18:17, said:

If I have understood the terms of the CIC, It will limit the number of potential customers to those paying in their £10 a month and maybe their guests.

Even trying to provide draft beers on this very time limited basis will be very hard to make add up. Staff costs and other overheads will add to the problems.

We do not agree with your analysis. If the facility is run correctly and efficiently then it will more than add up. It adds up at similar sporting venues and indeed at locations such as theatres and the SECC where only very small time windows are avaliable for sales.

animal, on 17 April 2011 - 18:17, said:

The existing bar in the corporate area is not a good comparison since of course the cost is folded into the £100 ish that we pay for the corporate package.

We don't recall publically comparing what goes on in the corporate with the proposed in the current "void" area. However there is good data on what the notional spend is in corporate (when inclusive) and there are occasions when the hospitality suite is run with a pay bar and certainly in the background all of this infomation has been used and we belive it is relevant.

animal, on 17 April 2011 - 18:17, said:

Take a walk round the Town Centre (or any other Town centre) and see the number of boarded up pubs and restaurants who have failed to make money from a FULL time business with unlimited potential clients.

We agree, but do not think this is a fair comparision, as the venue is not trying to make it as a full time licensed premises.

It is worth noting that the facility is large enough to hold 600 people standing 400 in theatre mode and 300 table seated. It will not only provide a great facility on match days, but a great hard working community facility and a fantastic extention to the existing club hospitality space enabling the club to cater over two large rooms (Banquet room and Party room) for weddings and christmas parties etc

animal, on 17 April 2011 - 18:17, said:

This seems like just another part of the financial fantasy which is the CIC.

It will be no surpirse that we storngly disagee with you on this point.

At the end of the day this is about a system of corporate funding and governance that allows the whole community to take control of the majority shareholding of St Mirren FC, and we think this can bring great benefits for the community, business and importantly for the individual fan the club.

We do not think we have a monopoly on good ideas but we have come up with what we believe is one and so decided to roll our sleves up and have a go at making this happen, if the deal does not complete then yes a lot of people will have wasted a lot of time and energy that they have invested in this project but we will at least have tried......we hope we will be able, at some point to have you try with us.

10000hours CIC

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Stu, on 15 April 2011 - 14:40, said:

My question would be what happens if/when the CIC doesn't get the grants/loans it is after.

If 10000hours does not get awarded either the total funding needed or the level of support required from individual, corporate and community members to fullfil the business plan then 10000hours will not complete the deal.

Community interest Companies only work if the community is interested.

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Stuart Dickson, on 15 April 2011 - 14:48, said:

The idea of a proper community club is something that interests me greatly. It's no secret that I've been heavily involved in a couple of community sports clubs in my neck of the woods and I've got my own ideas as to how a senior professional football club could work in partnership with those to the mutual financial benefit of both parties.

We would be delighted to hear from you regarding your own ideas.

No one at 10000hours has claimed that their is only one way of doing this and if there are people wo can contribute ideas that can make a difference then we would be delighted to hear them.

Please either post your ideas on here or mail to [email protected]

We would also like to hear of your experience at other Community Sports Clubs incase we can learn anything, which ones have you been involved with?

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Drew, on 15 April 2011 - 17:23, said:

Would it be enough to know that my individual membership will grant me some influence as to how the club is organised and run? Well....only if I was furnished with sufficient information to confirm that this would genuinely transpire, and how.

We believe that it will grant you significant influence and we look forward to furnishing you with infomation at the public meetings.

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Drew, on 14 April 2011 - 13:35, said:

We still do not know exactly how many corporate and community members have already signed up.

I mentioned this yesterday and would maintain that it is an significant omission in terms of the information provided thus far. In order for individuals and organisations who are considering signing up to have a good idea of how viable the initiaitive is, I think it would be helpful were we have a better idea of exaclty who has already bought into this. We don't need the specific identity of those organisations, but give us numbers, so we can begin to feel confident as to whether this is a genuine runner.

I can't think of any obvious reasons not to give this figure.

Without as you say giving the identity. 10000hours are happy for it to be known that 75% of the Corporate and Community members required have made a commitment should the whole deal continue to fruition, and have the suitable individual support added to the 10000hours CIC, and that there are a number of other businesses and community organisations actively engaged in considering the proposition.

10000hours CIC

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davidg, on 14 April 2011 - 07:53, said:

Genuine questions.

How much of a financial problem is it to the CIC if we drop below 300 members after a couple of years or so.

How much of a financial problem is it to the CIC if we fail to replace corporate members who pull out leaving us below the required 12?

Cheers. :)

We are not going to kid anyone on and say it is not a problem, less members = less money.

Obvioulsy this is one of the first questions that the funders ask themselves also.

However with the business plan presented to them and the dozens of meetings, tours and discussions they have satisfied themsleves so far that the risk of a drop off is low and they are prepared to put money into 10000hours CIC on that basis.

We hope that the public meetings will allow you some comfort on the matter when we can go into some more detail

10000hours CIC

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We are not going to kid anyone on and say it is not a problem, less members = less money.

Obvioulsy this is one of the first questions that the funders ask themselves also.

However with the business plan presented to them and the dozens of meetings, tours and discussions they have satisfied themsleves so far that the risk of a drop off is low and they are prepared to put money into 10000hours CIC on that basis.

We hope that the public meetings will allow you some comfort on the matter when we can go into some more detail

10000hours CIC

As an extension to these questions....

What is the worst case scenario if, in a few years time, the membership drops below what can be used to sustain the running of the cic?

If any additional funding is required to subsidise the running of the cic, firstly COULD, and secondly WOULD this come from the clubs finances?

We've been told that any profit made by the cic could be put towards the playing budget, however, could the transfer of finances work the other way around; ie, if we made money by selling a player, could and would the cic take a cut?

...if this was to happen, could and would the cic give a return to its membership, ie, are the corporate and community members viewing this as a financial investment?

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I would appreciate some clarification on the queries I have with the CiC

1. Do the loans and grants have to be paid back? If so by whom, what level of repayment and over what time period.

2. It is noted that the loans are soft loans. These soft loans are being used to purchase shares in the Club. If the funding covenant is breached what happens to the loans and thus the shares.

3. Do members of the CiC carry any liability should the CiC fail

4. Do the Directors of the CiC have the same responsibilities as Company Directors.

5. Please clarify which of the CiC members if any will receive a salary or payment for their role in the deal.

6. Are the Consortium members paying any fees/rewards/commissions for the sale of their shares.

7. On a similar vain is the CiC paying any fees/rewards/commissions for the purchase of the shares.

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I would appreciate some clarification on the queries I have with the CiC

1. Do the loans and grants have to be paid back? If so by whom, what level of repayment and over what time period.

2. It is noted that the loans are soft loans. These soft loans are being used to purchase shares in the Club. If the funding covenant is breached what happens to the loans and thus the shares.

3. Do members of the CiC carry any liability should the CiC fail

4. Do the Directors of the CiC have the same responsibilities as Company Directors.

5. Please clarify which of the CiC members if any will receive a salary or payment for their role in the deal.

6. Are the Consortium members paying any fees/rewards/commissions for the sale of their shares.

7. On a similar vain is the CiC paying any fees/rewards/commissions for the purchase of the shares.

1. it is different in each circumstance but as a guide (and apologies we cannot be more specific at the moment) it varies from not being paid back at all to pay back between 3 and 10 years. There are nearly a dozen different funding routes in play at the moment

2,3,4. A CIC is basically a Ltd compnay but with a different set of aims and objectives but with the exception of the assets lock the rules that apply to governance etc of a Ltd company apply to a CIC

5. not sure this is the question you mean as the CIC members will be those who join who obvioulsy wont be paid back, if you mean the CIC founders no one will recieve payment for thier roles in the deal.

6. That is not for the CIC to comment on.

7. We assume by fees you are not meaning legal fees? of which there are but any sort of finders fee/reward/commision? if that is correct then the answer is No.

10000hours CIC

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Question:

Have the SPL administrators made any comment to St Mirren FC in relation to the club's future stance on league reconstruction should the CIC gain control of the 52% majority shareholding? In more general terms, have the SPL shown any particular interest in the possibility of a radical new ownership scheme coming into place at one of their member clubs?

Edited by pozbaird

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What sort of issues would be allowed to vote on, for instance SPL reconstruction ?

How will the voting structure work, will it be one member one vote (irrespective of corporate, community or individual membership) or would corporate members get 100 times the voting power of individual members (they are paying almost 100 times as much) and community members 5 x times ?

Edited by bud77

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I have David's excellent suggestion a step further with the creation of this new sub-forum dedicated to all things CIC related.

If you have a question by all means start a new topic and I will ask the 10000Hours team to review and respond as quickly as they can.

Please review the threads or the Q&A thread to see if your question has already been asked and answered.

All chat relating to the CIC and the sale of the majority holding will be moved into this section from here on, hopefully making it easier for both the question askers and those answering them !

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What sort of issues would be allowed to vote on, for instance SPL reconstruction ?

How will the voting structure work, will it be one member one vote (irrespective of corporate, community or individual membership) or would corporate members get 100 times the voting power of individual members (they are paying almost 100 times as much) and community members 5 x times ?

x2

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What sort of issues would be allowed to vote on, for instance SPL reconstruction ?

Remember each business 10000hours CIC and St Mirren FC still has its own board of directors and those Directors have legal responsbilities to discharge under the Companies Act.

The voting within the CIC is for the elected CIC board which then controls the voting rights of the 52% therefore controlling the election to the board of the Club of the clubs Directors

Without commiitting the board of the club to anything as that is for the Directors of the club to decide at the time with all of the evidence that they have before them and VERY IMPORTANTLY acting in the best interests of the CLUB, it would be fair comment that it would be a short lived board that did not listen to the will of its majority shareholder, under this proposal that would be the CIC controlled by its members.

How will the voting structure work, will it be one member one vote (irrespective of corporate, community or individual membership) or would corporate members get 100 times the voting power of individual members (they are paying almost 100 times as much) and community members 5 x times ?

It is as noted in the document. The individual members get to elect 5 elected members and the Community and corporate get to elect the other 5. It is the elcted board that controls the 52% voting right it is not a case of comparing voting powers etc, the structure is designed to build a team.

10000hours CIC

Edited by 10000hours

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1. it is different in each circumstance but as a guide (and apologies we cannot be more specific at the moment) it varies from not being paid back at all to pay back between 3 and 10 years. There are nearly a dozen different funding routes in play at the moment

2,3,4. A CIC is basically a Ltd compnay but with a different set of aims and objectives but with the exception of the assets lock the rules that apply to governance etc of a Ltd company apply to a CIC

5. not sure this is the question you mean as the CIC members will be those who join who obvioulsy wont be paid back, if you mean the CIC founders no one will recieve payment for thier roles in the deal.

6. That is not for the CIC to comment on.

7. We assume by fees you are not meaning legal fees? of which there are but any sort of finders fee/reward/commision? if that is correct then the answer is No.

10000hours CIC

What happens to the shares if the CiC collapses after the shares have been purchased from the Consortium.

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Concerning the proposed matchday bar:

1- will there be tables and seating?

2- Will there be Sky/ESPN TV? (this I believe is a necessity to attract custom, before and after the game)

3- Who will staff the bar?

4- What are the proposed hours?

Thanks.

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What happens to the shares if the CiC collapses after the shares have been purchased from the Consortium.

Related to this question to a degree, and apologies in advance if this is a bit daft.

Working on the basis that we will effectively have two clear and discreet/distinct businesses at the heart of the club. The CIC who will own 52% of the shares, and St Mirren FC (based on this confirmation from 10000Hours earlier in the thread - Remember each business 10000hours CIC and St Mirren FC still has its own board of directors and those Directors have legal responsbilities to discharge under the Companies Act.) :

a) The CIC will hold loans etc. and will therefore have creditors. Can a CIC go into administration or even be liquidated?

b ) If the answer to the above question is yes, would the club be subject to the current sanctions that are associated with administration? If, so, this clearly increases the risk to the future of the club should the CIC initially get up and running but subsequently fail.

Edited by Drew

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Related to this question to a degree, and apologies in advance if this is a bit daft.

Working on the basis that we will effectively have two clear and discreet/distinct businesses at the heart of the club. The CIC who will own 52% of the shares, and St Mirren FC (based on this confirmation from 10000Hours earlier in the thread - Remember each business 10000hours CIC and St Mirren FC still has its own board of directors and those Directors have legal responsbilities to discharge under the Companies Act.) :

a) The CIC will hold loans etc. and will therefore have creditors. Can a CIC go into administration or even be liquidated?

b ) If the answer to the above question is yes, would the club be subject to the current sanctions that are associated with administration? If, so, this clearly increases the risk to the future of the club should the CIC initially get up and running but subsequently fail.

Drew I kind of discovered the answer to my own question and yours

a. Yes the CiC could in theory go into administration. See attached link re CiC. Plenty of stuff on The buzzwords that are being mentioned. The worry I have is that should the CiC collapse then the shares could be used by the administrator/liquidator to fund the creditors.

http://www.cicregulator.gov.uk/guidanceindex.shtml

b. Not sure. However the club and the CiC are separate companies and if the CiC failed then this should not have a direct effect on the club. Provided of course, that the club does not heavily rely on being financed by the CiC.

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My internet connection has been fecked for the last few days and I believe my questions may have been unintentionally overlooked due to the forum reshuffle, so I'll repost them here:

If the application to the Scottish Investment Fund (or whatever the Daily Mail article claimed it was) is unsuccessful, the whole thing falls apart? If it is successful, how will the loan be repaid? The document claims the increased income from the club's assets will help pay for the loan and lead to an increased footballing budget - must be a fairly big increase!

What do the community organisations get for their £500 a year? I'm guessing they must be getting at least that much back or it wouldn't be worth their while, so where is that money coming from?

How many corporate people have signed up so far. Is the earlier post suggesting that these are merely the five selling board members, Tony's Taxis (or whatever it's called), JD Sports and other companies with whom people at the club already have some sort of personal involvement anywhere near the mark? Fairly easy to draw that conclusion from the document.

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