Its Good To Talk

Last week during discussions with the KFCSA committee, we suggested that it would be a good idea to invite Paul Goodwin (Head of Supporters’ Direct Scotland) along to their open meeting on our behalf due to his experience in dealing with clubs with problems like ours and his expertise in governance and community ownership; along with our own board member Andy Millar who obviously has a better handle on things from our perspective. Mr Goodwin graciously agreed to give his time, despite the fact it wasn’t primarily a Trust meeting, as part of his remit with SDS is to help out wherever possible when clubs are deemed to be in trouble.

Mr Goodwin has subsequently received a request from Michael Johnston, Chairman of Kilmarnock FC, to meet with himself and new director William Bowie on the proviso that the talks would take place prior to the KFCSA open meeting on Thursday. The invitation was extended to a couple of representatives from both the Trust and the KFCSA, but unfortunately it has been arranged at too short notice for that to happen in the time frame requested. We have offered to meet with the club directors at the earliest possible convenience for all parties and hope that a reply to our legal representatives and the verification of our recent share acquisition is on the agenda.

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Why is community ownership better

The Killie Trust initiated the Community Ownership Group (COG) in May 2012. The purpose of this initiative is to make Kilmarnock Football Club community owned as soon as possible. 

The Vision for Kilmarnock Football Club

The Killie Trust’s vision for Kilmarnock Football Club is for it to be a well-run club which puts the fans and community at the heart of everything it does.  Fans will own at least 50%+1 of the club with the remaining shareholders understanding and supporting the principles of community ownership.

How do supporters have more control when it is a community owned club?

The members also elect the board of the Killie Trust. If the members disagree with how the Trust is being run then members get an opportunity every year to elect new people onto the board. These elections are carried out on the democratic principles of one person one vote regardless of how much time or money they put into the Trust. This ensures that no individual can hold undue influence over the Trust.

The members of the Trust also decide who should represent them on the club board. This will be decided using the same principles as the Trust Board elections. Those standing for election to the club board would need to meet certain criteria before being eligible to stand. Therefore one of the main strengths of community ownership is that everyone eligible gets one vote.

Community ownership is not about the day to day running of the Club, it is about democratically deciding who should make the strategic decisions about how our club is run. This process ensures that those who take on this role are held accountable for their actions and provide acceptable explanations for those decisions. This is good governance.

Community ownership is not about picking the team on a Saturday, it is not about deciding which player to buy or what is on the menu at hospitality. These are all decisions for employed staff to take. Community ownership is about deciding who should represent your views about how Kilmarnock Football Club engages with its supporters  and the wider community. It is also about deciding the future direction of the Club and ensuring that decisions taken are right for the club as a whole and not individuals within it.

Only genuine community ownership will give the supporters the opportunity to put an asset lock on Rugby Park. This means that our ground cannot be sold without the knowledge or permission of the fans. It also ensures that a reasonable market value is obtained if the fans agree that moving to new ground is in the best interests of the club and it’s supporters.

So how does the current form of ownership at Killie compare to community ownership.

Here are the key differences.

 Category Community Ownership of Kilmarnock FC Current ownership of Kilmarnock FC
Legal Status Co-operative Community Benefit Society

Limited by Shares

Legal Objectives To provide community benefit written into constitution – The trust is committed to supporting local sport in the area.The trust is a not for profit organisation, all profits are reinvested into the club and the community.

Legally constituted to provide value for shareholders.

(Given the current size of the debt this an unlikely occurrence so the model is inappropriate)

Financial Sustainability Financial prudence is written into their constitution, with transparency and  accountability assured by democratic model. There is no such provision in this model of ownership.
Financial Risk Management Unlikely to build up debts from private lenders as these cannot be converted into shares. Sustainable growth The Club has built up debt, including soft loans and floating charges over assets. This is common in this type of ownership model as it can be difficult to access other types of finance.Risky strategy
Voluntary Support Club would be owned by the fans and community therefore evidence from similar clubs is they have a large pool of willing volunteers. Privately owned businesses may reduce the pool of volunteers as the ethos and benefits of volunteering may not be understood.
Network of support Member of Supporters Direct alongside 34 other supporters’ trusts who provide from mutual support/benefits.The Co-operative sector offer extended advice and support.Competition on the pitch – co-operation off the pitch. All other clubs are viewed as competitors.
Grants Non profit distributing Co-operative. Eligible for larger range of grants   including from the co-operative sector. As a privately owned Company KFC will find it very hard to meet eligibility criteria.
Board structure Democratic model with large pool of candidates, all positions will be either elected   from trust membership (open to all) or co-opted for particular skills. For a long time there was only one Board member. In August 2013 Billy Bowie joined the Board.There is the risk of private motivation outweighing community needs and a short-term   perspective.

The Good, the Bad and the Chairman

COGlogo

Michael Johnston has stated that he cares about the 200 people employed at the Club and the Kilmarnock supporters that have chosen not to attend Rugby Park do not. He blames the reduction in attendances at Killie home games on factories that shut over 30 years ago.

Yet the population of Kilmarnock has grown in recent years, while crowds at Rugby Park have continued to decline. The greatest risk to all the hard working staff at Kilmarnock Football Club is the loss of customers and the resultant loss of income. There seems to be no plan or strategy to reverse this decline. The chairman’s attitude to fans for many years has been “give me your money and shut up”. Now some supporters have had the temerity to question the quality of his leadership and his ability to attract new customers.

The Chairman has recently brought a new director on to the board; stating that this has been his long term plan, a long term plan that no one had heard of until attendances reached their currently catastrophic levels.

It is curious that the Chairman can now bring new people on to the board when the club is in such a financially perilous state. For many years he said the company’s finances meant it would be too risky for others to join the board because of the strong possibility of an insolvency event.

He has also stated that he intends to get another 3 or 4 investors on to the board in the near future. If each of these investors match Mr Bowie’s contribution this will still leave the club with a debt of £7.75 million. If this is Mr Johnston’s plan to turn the club around, then he will need to find another 31 investors to put in similar amounts. This is assuming that the debt has not risen in the last year as it did in the previous year’s accounts.

We, the supporters of Kilmarnock Football Club, have to hope that these very generous individuals are not expecting a return on their investment in the short to medium term, if ever. We must also hope that this money is being used to reduce the debt and is not being used to maintain cash flow as happened at Heart’s in the dying days of the Romanov regime.  The Board of Hearts FC undertook a share issue that emotionally blackmailed supporters into investing, knowing it would only pay the bills in the short term.

The “angry fans and their ringleaders” have been told that they do not care about the 200 jobs at Kilmarnock Football Club. The Trust sees a far bigger picture where the prosperity of the Club is vital to the town and the prosperity of the town is vital to the Club, a virtuous circle that supports both. Rather than be positive about the club’s home town Mr Johnston perpetuates a view of Kilmarnock as seen in “The Scheme”, a ghost town of high unemployment.

The Chairman blames everyone but himself for the problems faced by our Football Club. Yes he took on a very difficult situation and he has managed to reduce the debt which he is happy to take the credit for.  This was only achieved by selling the clubs assets. Without strong gevernance can we be sure that every opportunity was taken to realise the maximum value of these assets? Some of the young players sold could have generated a far larger transfer fees if they had been given longer to develop in the Kilmarnock first team.

Sadly he has also presided over a massive decline in the number of people coming through the turnstiles. Unfortunately in this world you have to take the good with the bad, so he has to take credit for this as well.

If Mr Johnston had engaged with the supporters in an open and positive manner earlier in his reign, he would have been able to draw upon the skills of fans to develop long term strategies that would have helped build the business.

Being a football fan is about a sense of belonging, a sense of family. This is the most powerful marketing tool any football club can have, but it has to be nurtured.

Kilmarnock’s Chairman appears to know the price of everything but the value of nothing.

Kilmarnock FC – do YOU care ?

With attendances dwindling and Killie lurching from one off field crisis to another (the latest being the Celtic ticket fiasco) fans have not even had the chance to celebrate one victory under the new management team which Club Chairman Michael Johnston appointed to replace Kenny Shiels and Jimmy Nichol.

Kilmarnock Football Club Supporters Association (KFCSA) now invite ALL those  with ANY interest in Kilmarnock Football Club to attend an Open Meeting at 19.15 on Thursday 10th October in the Grand Hall, Kilmarnock.

Are you one or more of the following :

  • The Club Chairman
  • Recent investor or possible new investor
  • Employee
  • Shareholder
  • Season ticket holder
  • A member of the Killie Trust
  • A member of KFCSA
  • Someone who pays at the gate
  • Part of the Not a Penny More (NAPM) idea
  • Someone wearing blue and yellow at matches seeking regime change
  • Someone who cares about the survival and future of the oldest professional football club in Scotland ?

If so then PLEASE come along on 10th October and let your views and opinions be heard in the hope that there is some better way forwards and onwards for Kilmarnock FC.