Jump to content

Fan Ownership SMISA Proposal


bazil85
 Share

Recommended Posts

Majority fan ownership is right around the corner. SMISA have emailed members today with a proposal on what future monthly funding could look like, sounds good to me

Full proposal: 

It’s not long now until we complete the purchase of the majority shareholding in St Mirren meaning by the time next season kicks off, our club will be fan-owned.

Over the past five years, the bulk of SMISA’s income has been saved for that share purchase. So one of the key issues we’ve had to look at in recent months is how future income will be used once the shares are bought.

Our extensive member survey last summer asked whether members would be happy if your future member fees were to be invested in the club. 89% of you said you would, and only 2% were not (the rest were maybes).

So on that basis we have spent considerable time creating a proposed future finance model, outlined below, on which we are asking you to vote on whether to adopt.

Future finance model

The model we are proposing would see all income after SMISA operating costs split according to the following percentages:

50% would be saved in the bank. We believe the early years of fan ownership is a chance for us to be sensible and build up a cash reserve. We will have around £150,000 in the bank as of next month and plan to maintain this at or above £400,000 by 2024. This would give the club financial security but would also give SMISA the ability to make large-scale investments (either as donations or loans) in the club in future. Any spending from the cash reserve would be subject to a member vote.

30% would be reserved for the club’s youth academy. Every time we’ve asked members for your top priority for investment, the academy has topped the list by a distance. St Mirren fans are right to be proud of our academy – it is the lifeblood of the club. The proposed investment would be additional to the current academy budget and would help it grow its operations. Each year we would ask the academy to submit suggested uses for the money to the SMISA board for our approval.

10% would be for a ‘club pot’ to be spent as members decide. This would be the successor to the £2 pot, which has supported a wide range of projects over the past five years. We will invite suggestions from the club and our members for projects which help the club or improve the fan experience, and members will vote on whether to adopt them. We are proposing this be done as and when suitable projects are on the table, rather than via a fixed quarterly schedule.

10% would go direct to the SMFC Charitable Foundation. As a registered society under the Community Benefits Act, SMISA needs to demonstrate clear community benefit. As the club’s charitable foundation already do great work in this area, supporting them to build on that would be the best way to deliver on this. This 10% would be a direct donation, to be spent as the Foundation chooses, but they would like to hear suggestions from SMISA’s members over projects or local good causes they could support.

All of the above would be subject to an annual financial review, where the SMISA board will consider if each investment is delivering on our objectives, and if the percentages should be adjusted. Any change to the percentages would be subject to a member vote.

Why we are proposing this

We believe the model gives the club financial security, while investing in its long-term future and helping deliver success on and off the park. It also strikes a balance between giving members a say on where their money goes, while giving the club and its associated arms a degree of certainty over their financial planning.

We also believe it meets member feedback. Our member survey of summer 2020 also asked you to rank your preferences for where any investment in the club would go, and the results of that shaped our approach – the youth academy was your top priority and on the whole you wanted sustainable long-term investment.

Other fan groups – such as Foundation of Hearts and the Well Society – put money into their club’s operating budgets each year, but their members don’t decide where it goes. We think your money should be spent in line with your wishes and that this model not only delivers that, but will keep members engaged in the years ahead.

Clearly our income will go up or down depending on member numbers, so we’ve had to forecast the sums involved. To give a rough guide, should we maintain current income levels, we could have roughly £160,000 after costs, which would mean £80,000 for the cash reserve, £48,000 for the youth academy, and £16,000 for each of the club pot and charity foundation.

If the model was adopted, a strong SMISA will mean a strong St Mirren – the more members we have, the more we will be doing for the club. This underlines not just why we need existing members to stay with us, but why we want to attract new members too. We will be revealing a new membership fees and benefits structure in the coming weeks which we hope will make continued and new memberships even more attractive.

SMISA costs

Like all voluntary organisations, SMISA has operating costs, and while we are careful to ensure every penny of spend is necessary, ours currently run into five figures. We are proposing the SMISA board start with an initial annual budget of £24,000 with which to meet these costs.

£10k of this will be used to provide an improved member benefit offer (this will be mainly be spent on club hospitality and events, so will be going to the club). The rest would cover our other costs, which include professional fees, website and software costs and bank charges. A detailed breakdown of these is in our annual accounts and we are happy to take any questions from members on this.

Each year the SMISA board will have a formal budget planning meeting to review the previous year’s spend and set the upcoming year’s budget, and would vary this accordingly. Any unspent money would be kept in the bank for future expenses and we would only exceed the budget if necessary.

What happens next

We are asking members to vote on whether to accept the proposed future finance model. This would mean:

  • the SMISA board would have authority to set and amend an annual budget to cover the organisation’s costs as described;
  • all income after operating costs would be split according to the percentages outlined and spent as described above;
  • any significant changes to the model in future would require a member vote;

Members can cast their vote via our membership platform VeryConnect now. Voting will run until Monday 12th July.

As always, the SMISA board are happy to take any questions via [email protected]

Regards,

The SMISA board

Edited by bazil85
Link to comment
Share on other sites


21 minutes ago, Smithers Jones said:

Personally I would be more comfortable with 70 - 80% to be saved over the first 5 years or so to establish a stronger balance.  Other than that I am happy enough with the model proposed.

Think that’s fair enough, will be more interested to see what they do eventually spend it on as well.
 

Imagine the club will continue to save as well, wouldn’t like to think this is the only safety net. 

Link to comment
Share on other sites

9 minutes ago, bazil85 said:

Think that’s fair enough, will be more interested to see what they do eventually spend it on as well.
 

Imagine the club will continue to save as well, wouldn’t like to think this is the only safety net. 

I’d like to see a portion of it invested into a Vanguard all world tracker fund. Even a small amount each month invested stands to gain far more long term than residing in cash. I agree with Smithers with a higher % saved in the first five years.

At the end of the day we as members will be able to adjust these percentages depending on what our needs are.

We are in good shape moving forward. The accounts covering the Covid season will be out later this year. Hopefully reaching both semis has given us some breathing space. Hopefully Villa are offered big money for McGinn in next few years. 🤞 

Link to comment
Share on other sites

43 minutes ago, Yflab said:

I’d like to see a portion of it invested into a Vanguard all world tracker fund. Even a small amount each month invested stands to gain far more long term than residing in cash. I agree with Smithers with a higher % saved in the first five years.

At the end of the day we as members will be able to adjust these percentages depending on what our needs are.

We are in good shape moving forward. The accounts covering the Covid season will be out later this year. Hopefully reaching both semis has given us some breathing space. Hopefully Villa are offered big money for McGinn in next few years. 🤞 

For the money we’re talking, I’m sure they’ll have some sound financial advice on it, that fund is still pretty high risk though (like most trackers) is it not? 

I get the more saving argument but tbh I’m more a speculate to accumulate kind of person. This is money we’ve never had before & that most clubs don’t have (yet survive). I agree in saving a good portion for a number of years but 50% seems plenty. I would hope after we get to a good level of savings, we are investing in the football, youth, commercial, facilities & community sides to grow the product more than being over cautious. After all, a youth structure developing high quality players is likely to have a far higher return than any savings account. 

Link to comment
Share on other sites

  • 2 weeks later...

I think it would it be reasonable to ask that other shareholders to make a pro-rata payment to match SMISA's investment

It won't happen, but it's a wee bit off if other holders of a sizeable amount of shares will see their investment protected or made to grow by dint of the well-intended actions of others, especially if the £400K fund is ever used in anger.

Good idea though, in principle.  SMISA should take steps to ensure it isn't abused

Edited by beyond our ken
Link to comment
Share on other sites

35 minutes ago, beyond our ken said:

I think it would it be reasonable to ask that other shareholders to make a pro-rata payment to match SMISA's investment

It won't happen, but it's a wee bit off if other holders of a sizeable amount of shares will see their investment protected or made to grow by dint of the well-intended actions of others, especially if the £400K fund is ever used in anger.

Good idea though, in principle.  SMISA should take steps to ensure it isn't abused

Those other share holders that kept the Club going for years before SMISA was ever thought about?

Link to comment
Share on other sites

Those other share holders that kept the Club going for years before SMISA was ever thought about?
Some of which will also be members of SMISA.

And as my learned friend alluded to, some would have invested when it was new shares that were issued to raise money for the club.
Link to comment
Share on other sites

12 minutes ago, beyond our ken said:

Correct

Funny how people just assumed the worst and reacted accordingly.  Some people need to get over themselves

You could, easily, have made it clear rather than you're vague reference. 

Some people need to get over themselve indeed. 

 

 

 

 

 

 

 

Edited by faraway saint
Link to comment
Share on other sites

2 hours ago, Cookie Monster said:

So who along with the Kibble were you referring to, as you wrote shareholders not shareholder? emoji848.png

As far as i know, there may be others.  I'm not that familiar with the current distribution of shares.  And there is nothing to stop a new person or group from attempting to develop a shareholding from some of the smaller shareholders.

Edited by beyond our ken
Link to comment
Share on other sites

Posted (edited)
10 hours ago, beyond our ken said:

Correct

Funny how people just assumed the worst and reacted accordingly.  Some people need to get over themselves

It’s been pretty well documented the areas Kibble will contribute to regarding their involvement in St Mirren including a large sum of money to actually buy the shares. 
 

Is it really in good taste to ask a charity that supports at risk children for more of a financial commitment to the football club?

Think about how ownership normally works at a football club as well, we’re in a great position compared to clubs that have owners/ part owners taking profits or running at losses. For me St Mirren is a labour of love, I pay into SMISA for that reason. 
 

Others can choose to pay more or not through SMISA, it isn’t fair to expect other share groups to pay more just because we as club fans have decided this is the model (I assume) to move forward with. Especially a charity organisation IMO. 

Edited by bazil85
Link to comment
Share on other sites

A lot depends on the reason for the money being spent.

In the past the biggest shortfall was often cash flow in winter months after a few postponements. In that case individual directors (major shareholders) often gave the club short term loans that were then paid back. 

I think that could be way ahead for one aspect of the SMISA investment. 

Like others, I cannot see how Kibble could make such loans. 

Link to comment
Share on other sites

6 hours ago, bonzoboys said:

A lot depends on the reason for the money being spent.

In the past the biggest shortfall was often cash flow in winter months after a few postponements. In that case individual directors (major shareholders) often gave the club short term loans that were then paid back. 

I think that could be way ahead for one aspect of the SMISA investment. 

Like others, I cannot see how Kibble could make such loans. 

The other times short term loans were required was at season end as the league prize money is not paid immediately. I’m sure SMiSA will have that covered.

We are 9 days away from being a majority fan owned football club. Brilliant news.

Link to comment
Share on other sites

11 hours ago, bonzoboys said:

A lot depends on the reason for the money being spent.

In the past the biggest shortfall was often cash flow in winter months after a few postponements. In that case individual directors (major shareholders) often gave the club short term loans that were then paid back. 

I think that could be way ahead for one aspect of the SMISA investment. 

Like others, I cannot see how Kibble could make such loans. 

 

5 hours ago, Yflab said:

The other times short term loans were required was at season end as the league prize money is not paid immediately. I’m sure SMiSA will have that covered.

We are 9 days away from being a majority fan owned football club. Brilliant news.

I think both scenarios are pretty historic & not on the horizon for our football club. 

- running at profit 

- cash in bank 

- very well budgeted 

- no concerning debts 

There is a danger of planning for the challenges we’ve faced in the past instead of future planning. Doubt the club will be in a position not to cover short term running costs anytime soon when you look at how we are run & business models. 

Link to comment
Share on other sites

  • 2 weeks later...

Who knew?

Quote

50% would be saved in the bank. We believe the early years of fan ownership is a chance for us to be sensible and build up a cash reserve. 

 

Quote

50% would be saved in the bank. This would give the club financial security but would also give SMISA the ability to make large-scale investments (either as donations or loans)

 

Quote

50% would be saved in the bank.. Any spending from the cash reserve would be subject to a member vote.

🙂

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
 Share

×
×
  • Create New...