Fans forum

[Beano]

I'm very conflicted by the investor situation.

I can unashamedly say that I'd like to be competing in national competitions, whether that be the Conference and Trophy, or the Football League. However, I know this is an unrealistic expectation so soon.

The members of the board have done a sterling job, but we also need some full time staff to run the club (to a strict budget without continual overspending). It seems the only way we could realistically do this is via an investor. I also cannot see us fans raising anywhere near enough to improve the ground to Conference level. Perhaps we have found our level financially for the foreseeable future?

That said, I don't want a return to the boom and bust days of Reynolds, et al, and continuous ruin, even if that means staying out of the FL.


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[DarloDave40]

Think if we get the model right it's the natural way forward. However until we hear who the actual investors are let's just keep an open mind.

[lo36789]

Thing is there is an actual fundraising push going on now...

Hands up who is motivated to invest when there is the talk of an investor? You can already see that anyone who has had their head turned by that isn't going into their own pocket.

[Darlogramps]

We need stability, we need to be run at at profit (not just break even) and we need patience. Dreams were what Gray was taking about and if you think it's likely to workout well in the long term with an investor, despite all the evidence, you're in a dream world and need to return to reality!

I think it's fairly clear from tonight's FF that being fan-owned doesn't guarantee us financial stability either. We're repeatedly run at stonking losses and a slight delay or miscalculation can knock us out still further.

We've still got 4 years of the 500 club season tickets to run, so we're missing out on that too.

Yes it would be a risk to open up to investors, but given we've repeatedly run at a loss and at least twice nearly gone bankrupt since 2012, it's just as much a risk to stay on our current course.

I'm open to investors but there must be transparency before any takeover. The investors, their motives and their business plan for the club must be scrutinised thoroughly.

A high level of due diligence is needed with fan oversight.

[Mr_Tibbs]

I'm with Erdogan on this one - definite coup attempt.

[Darlo_Pete]

Couldn't attend tonight's forum, but there is barely no mention on this thread about the new fundraising ideas. What was said about this, how much do they hope to raise and by when?

[SwansQuaker83]

Thing is there is an actual fundraising push going on now...

Hands up who is motivated to invest when there is the talk of an investor? You can already see that anyone who has had their head turned by that isn't going into their own pocket.

Head turned by what? Tangible investment? Do you not trust what Gray has said tonight? Did you challenge him on this or question it?

[theoriginalfatcat]

Tonight was billed as a 5 year plan from the 'club' but there was only one 5 year plan and that appeared to be from MG. Like to know how much everyone knew of what MG was going to say beforehand?

After visiting the pub and having a think, this too is my overriding thought about the forum. Was M.G's speech a surprise to the board (what's left of them) and the supporters group?

Also Wayne was very impressive.

[lo36789]

Thing is there is an actual fundraising push going on now...

Hands up who is motivated to invest when there is the talk of an investor? You can already see that anyone who has had their head turned by that isn't going into their own pocket.

Head turned by what? Tangible investment? Do you not trust what Gray has said tonight? Did you challenge him on this or question it?

Eh? We are a fans owned / fan funded club or have been to this point or have you missed that? This is a change of direction it was announced as such. The 5 year plan of the club is entirely different to Martin Gray's 5 year plan.

I am basically saying a volume of people are now just thinking about that as a result I am not convinced the fundraising will achieve what it sets out.

I have no doubts that MG has had discussions with people. I wouldn't really call it tangible investment at this point though - unless you completely change the meaning of tangible.

[Yarblockos]

Thing is there is an actual fundraising push going on now...

Hands up who is motivated to invest when there is the talk of an investor? You can already see that anyone who has had their head turned by that isn't going into their own pocket.

The fundraising is going to put on the backseat now, no doubt. There can't have been any discussion between MG and the board beforehand. It must have been a surprise.

It looks like MG wants to do things another way, he's been very honest about his ambition and has set out his vision (we get investors or I'm gone). I guess recent events have persuaded him that he has to make this move now. I don't know if this is the correct way to go, but he is trusted by the fans way more than the board.

[theoriginalfatcat]

lo has a point SwansQuaker - M.G's speech really does throw the cat amongst the pigeons!

[Robbie Painter]

Martin Gray basically he said he has two investors lined up. They want 51%+ of club. If this doesn't happen & his budget is cut then himself & his management team (& no doubt a lot of the players) will be off at the end of season. 7 days time.

He wants us on the express train bankrolled to the football league. Get promotion next season & turn full time in the conference. He even mentioned how much of a budget he'd need in league 2.

Can't see how any of this can be tied up, one way or other, by the end of April.
How are we supposed to agree contracts for next season whilst uncertain negotiations ongoing? Then put to vote by supporters group.

Fundraising round won't be successful - who is going to give their money away when these new investors should fund it. Need to start on the pitch by June I'd imagine so that might not happen for another 12 months (if at all).

What a mess & a public circus.

That said these investors need to be given respect and serious scrutiny. We need to set a high bar for them to clear if they want to become majority owners. Another admin & mountainous debt hole really will kill club so we can't get this wrong.

[spen666]

Excellent work by mikyx and Simon on Twitter updating on what was being said.

Thanks for that

Which twitter feed Spen? I was on the Echo one.

Sorry, just seen this. I was using #dfcforum to follow forum on Twitter and those 2 were doing excellent work.

I did not realise Northern Echo were tweeting it

[DarloDave40]

I do feel for the current board they legally can't trade knowing they will make a huge loss, the only way was to cut Martins budget and in that respect that was the right thing to do.
However this is football and normal business rules never seem to apply. I hope John Tempest hangs around for him and Wayne to see us through this and get best deal for fans if investors do come in, as its those guys who have done the hard work along with all the volunteers.

[lo36789]

Let's be honest if they are going to get 51% I'd prefer they got 100% and just bought back rest of shares from the fans who have invested over the years. Getting 51% is getting full control for the cheapest possible price at the expense of the fans who kept the club alive.

I am not sure we are Darlington Footballs Club anymore. We are an extension of the Martin Gray football academy playing as Darlington Footballs Club.

I don't really understand why the team would make an £85k cut when we were told that budgets for next season hadn't been decided. ST sale would determine he budget. We were £30k under on revenues and £30k over on budget.

By my reckoning if MG stayed within budget the Operational loss for the year becomes £30k. If we can push attendances up by an average of 150-200 fans that is covered.

MG has the support of the room because what he announced is the easiest and most fruitful option. Given the level of comment on social media I am not surprised that there are short memories on what private investment results in. Our operational costs would sky rocket as I can't see the volunteers sticking around in current capacity.

Basically this whole affair has sort of reaffirmed a theory I've had. How many times has MG threatened to walk if his budget wasn't what he wanted. If we didn't just sign Liam Hardy for example...

I don't dislike Gray he's done a great job, but at this point I really can't decide if he's using the football club to fulfill his (and his mates - all the backroom staff who must remain as is) own ambitions.

[wizardofos]

An important part of Martin Gray's speech hasn't been analysed here.
His view is that our current model will not lead to us levelling out where we are, rather it will lead to a downward spiral of budget cuts, resultant lack of success on the field, falling crowds, further budget cuts etc.
The fans owned model has done well whilst we were the big fish - its getting harder now. Look at FCUM (with a larger fan base) - they have probably reached their level as well and the club and its fan base is riddled with politics, factions and even law suits against each other.
I felt sorry for the volunteer Directors last night. These people have top jobs in some successful, top companies, and yet they are having their lives spoilt by trying to run a business which, in financial terms, is no bigger than a corner shop. I'm afraid it will always be thus for anyone daft enough to follow them.

Reflecting on all of this, I am broadly in favour of a main shareholder (if one can be found). This will lead to clarity of leadership where the motivation for success for the main shareholder is protecting his or her investment.
What is different on this occasion, is that we as the owners are in a one-off position to dictate the terms by way of any change to the articles. Whilst we can't select the buyer (or their successors) we can dictate the legal constitution going forward.
I'm not a lawyer, but the type of things I would look to engineer into any new articles (where the supporters still owned 49%) would be:
- No loans permitted from shareholders.
- Appointment of Directors would require a 75% majority vote by shareholders.
- Any future changes to the articles would require a 75% majority vote by shareholders.

There will be complications such as future capital expenditure. In the 51/49 model, does that mean the money for development would need to be raised pro rata? Would a new owner be prepared to stump up all the funds for development but then only own 51% of them afterwards?

There is also the question of the cost of entry for the new investor. A logical answer would be for the investor to inject the same amount as the the supporters have to date for their half.

I applaud the gentleman who stood up at the end and asked if the current Board would consider staying on to oversee this process, should it happen. It will need some skillful handling.

Echoing those above, well done Wayne Raper. Very difficult evening handled with skill and diplomacy.

[don'tbuythesun]

Really appreciate the feedback from everyone. Well done to all who attended and hopefully when the dust has settled we'll find a positive way forward. I remember watching Runcorn's final match and would hate that to happen to us. Legally I suppose we're lucky to have Spen to advise us.

[SFG]

News that there may be investors interested in the Club is welcome. Doubly so if they have a Darlington background.

Previous problems with private owners have centered around their expectation that land at Neasham Road (and prior to that Feethams) could be developed to provide additional income streams. That didn't (couldn't?) happen hence the financial collapse.

Investors do expect some return on their expenditure. The Club has no capital assets and only a limited ability to raise non matchday income.

Any return for the investor must come from the development of existing revenue streams.

Any deal will. therefore, need to involve one of the rugby clubs.

[princes town]

lo has a point SwansQuaker - M.G's speech really does throw the cat amongst the pigeons!

. You can say that again.

[Vodka_Vic]

The irony of getting to the FL of course is that your budget in real terms can be a lot less that the Conference as you get a million pounds TV money every year which you don't on the Conference.

[Darlogramps]

I don't really understand why the team would make an £85k cut when we were told that budgets for next season hadn't been decided. ST sale would determine he budget. We were £30k under on revenues and £30k over on budget.

By my reckoning if MG stayed within budget the Operational loss for the year becomes £30k. If we can push attendances up by an average of 150-200 fans that is covered.

You've made good points elsewhere, but this kind of made-up rubbish really does my head in.

"By my reckoning" and "if we could" confirms this. It's guesswork, not rigorous financial management. This is ironic as you've said you're against this very thing.

"If MG stayed within budget the operational loss reduces by £50k" - where the hell are you getting that from? Again, it's made-up guesswork.

The point about next season's budget cut - it's 80k down because of the loss announced last night. 500 season tickets are out because of the 500 club.

And budgets aren't set solely on season ticket sales (which were brought forward to plug the financial gap). It's on predicted attendances, sponsorship, income from the league etc.

Attendances have been mediocre at BM. Where's your evidence we'd sell 200 extra tickets per game? How do we get that increase?

And how do you expect us to budget for that, if there isn't any evidence any increase will materialise? We have to make up £80k already so if your increase didn't happen.

MG has the support of the room because what he announced is the easiest and most fruitful option. Given the level of comment on social media I am not surprised that there are short memories on what private investment results in. Our operational costs would sky rocket as I can't see the volunteers sticking around in current capacity.

Unbelievably patronising. No one forgets what happened previously.

But Raj and Houghton were greedy charlatans aiming to make money out of the club. Barring players we have no assets worth getting involved for. MG says the proposed investors are completely different.

I agree we must be wary. Serious due-diligence is required and to me, we need some form of fan oversight. Two SG supporters on the board, with club budgets needing unanimous approval would be my initial suggestion.

But anyone against investment must say how they propose finances should be managed instead.

To say investment = inevitable implosion is patronising and wrong. Who's to say the investors won't be more like Graham Wood/the Bennetts at Gateshead, or Brad Groves at Spennymoor?

Basically this whole affair has sort of reaffirmed a theory I've had. How many times has MG threatened to walk if his budget wasn't what he wanted. If we didn't just sign Liam Hardy for example...

I don't know, how many times has he threatened to walk? Give details please if you're in the know.


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[al_quaker]

The irony of getting to the FL of course is that your budget in real terms can be a lot less that the Conference as you get a million pounds TV money every year which you don't on the Conference.

I was just about to post a similar thing! Great minds think alike...

The other thought that popped into my head this morning was that there are other part fan owned football clubs. Swansea being 1 example. Wonder how they make it work. Do their fans still feel like they have a voice?

I can't see this being sorted out quickly, yet it seems the fundraising needs to happen pretty quickly to keep hold of our better players. Yet the fundraising will be damaged by the investor option being on the table. Catch 22...

[princes town]

Make no mistake a 51-49 model will simply not work. Do the maths. It is one it the other. It will wipe out the volunteer base on matchday delivery because why would anybody volunteer in a club that is private ownership. The fans need to decide. Or atbleast 75% need to decide they want this change. People also need to be clear about the distinction between fan owned and fan run. Fans really need to grip with comments like "in MG we trust" as in the end he is an employee of the club. A very good manager at that but still an employee.

In saying that, my take on last night was strong support for MG plans. If that is what the fans want do be it but people to go with it with their eyes open as we are effectively moving the club to a private ownership model. It would be pointless taking 48% 49%, I'm very disheartened. The laughing stock comment also didn't go down well either although it is clear what this meant or even the evidence. My take is other clubs have been generally sympathetic. I also accept the fans model is a really tough gig.

[Vodka_Vic]

Surely we have to get round the table and see what's on offer. As MG says 'do this sensibly'. There's simply no point in not having a look to see. If anything is undesirable, then we can say no. It's not like before when GR/RS were our only hope of saving the club and they had absolute say.

[Darlogramps]

Surely we have to get round the table and see what's on offer. As MG says 'do this sensibly'. There's simply no point in not having a look to see. If anything is undesirable, then we can say no. It's not like before when GR/RS were our only hope of saving the club and they had absolute say.

Exactly, no one should be rushing to trash or promote this deal until we know the details of who is behind it and what their plans are.

This is the logical next step.

[real_darlo_85]

An important part of Martin Gray's speech hasn't been analysed here.
His view is that our current model will not lead to us levelling out where we are, rather it will lead to a downward spiral of budget cuts, resultant lack of success on the field, falling crowds, further budget cuts etc.
The fans owned model has done well whilst we were the big fish - its getting harder now. Look at FCUM (with a larger fan base) - they have probably reached their level as well and the club and its fan base is riddled with politics, factions and even law suits against each other.
I felt sorry for the volunteer Directors last night. These people have top jobs in some successful, top companies, and yet they are having their lives spoilt by trying to run a business which, in financial terms, is no bigger than a corner shop. I'm afraid it will always be thus for anyone daft enough to follow them.

Reflecting on all of this, I am broadly in favour of a main shareholder (if one can be found). This will lead to clarity of leadership where the motivation for success for the main shareholder is protecting his or her investment.
What is different on this occasion, is that we as the owners are in a one-off position to dictate the terms by way of any change to the articles. Whilst we can't select the buyer (or their successors) we can dictate the legal constitution going forward.
I'm not a lawyer, but the type of things I would look to engineer into any new articles (where the supporters still owned 49%) would be:
- No loans permitted from shareholders.
- Appointment of Directors would require a 75% majority vote by shareholders.
- Any future changes to the articles would require a 75% majority vote by shareholders.

There will be complications such as future capital expenditure. In the 51/49 model, does that mean the money for development would need to be raised pro rata? Would a new owner be prepared to stump up all the funds for development but then only own 51% of them afterwards?

There is also the question of the cost of entry for the new investor. A logical answer would be for the investor to inject the same amount as the the supporters have to date for their half.

I applaud the gentleman who stood up at the end and asked if the current Board would consider staying on to oversee this process, should it happen. It will need some skillful handling.

Echoing those above, well done Wayne Raper. Very difficult evening handled with skill and diplomacy.

Thing is a combination of Steve McClaren and David Hodgson (if rumours are true!) wouldn't be a bad thing. So long as the investment is from a sustainable source, both have been in positions where club's have been run poorly (McClaren at Newcastle and Derby and Hodgy with us) and I'm sure none would want the club to be run in a way previous regimes have allowed.

Even if it is someone else but has MG's trust, I have no problem with this happening (one or two major shareholders), the club is at a definite crossroad - to carry on the progress at the same rate as we have become use to then outside investment is the only real immediate way. The other is you carry on solely as a fan owned club with a finite support and limited resources which even now I feel we have been elevated artificially with significant loans. We have probably gone beyond what is sustainable as a fan owned club based on our size and support, in all honesty I feel we would hold our own at Evostick league but no more.

[lo36789]

"By my reckoning" and "if we could" confirms this. It's guesswork, not rigorous financial management. This is ironic as you've said you're against this very thing.

"If MG stayed within budget the operational loss reduces by £50k" - where the hell are you getting that from? Again, it's made-up guesswork.

The loss was made up of £30k lower revenues, £35k overspend on playing budget, £15k carried forward from previous season.

In the actual return home to Darlo year (not a full season) we lost £65k.

£35k of that was because of an overspend on budget. If we reduce that out we are instantly down to £30k in terms of where revenues were budgeted at and where they ended up.

It was stated that 500 fans would be £100k per year. 150 fans would be extra £30k.

I didn't just make it up. The fans have been asked for £80k to 'boost the budget' that is part of the fundraiser announced.

[al_quaker]

Having had time to think and reflect on last night, I think I've formulated my opinion on investors coming in. If there is to a be a change to our club constitution to remove the fan majority ownership part of it, I would need it to be replaced with other rules to try and ensure we don't end up in a mess again. These are of course without knowing who these people are, but I can't the fundamentals of my opinion changing too much.

I wouldn't be happy with significant lumps of money being loaned to the club, and certainly not in a sneaky way as has happened before. Any loans would need to be approved by the DFCSG, and I would like an upper limit on value. Significant sums would need to be a gift to the club.

There would need to be exit strategies for if an investor got sick of pumping money in. Otherwise we could end up saddled with contracts we couldn't afford. An idea could be that any shortfall to be covered by investors for a forthcoming season would be given to the DFSCG at the start of said season. That would mean the contracts for the forthcoming season were covered, and then if an investor pulled out mid season, we would have the money to get to the end of the season and then have the opportunity to reduce expenditure over the summer.

Any assets would need to be owned by the DFCSG.

Significant DFCSG presence on the board of directors.

If these conditions (or similar) were met, I'd probably be happy to relinquish control of the club and move to a minority fan ownership model. Investors could pump money in and control the direction of the club, but we as fans would still own a voice and there would be safeguards against sudden withdrawal of funding.

Whether any investor (or, let's be honest, benefactor) would be happy with this is a different prospect. This of course is just my opinion - some will be happy to back MG, some will never want investors again. The DFCSG needs to consult its members, draw up it's red lines for negotiations, and meet with the people MG has found.

[m62exile]

It's going to be hard for fans and shareholders to make an informed choice and it the minute its impossible because nobody has the slightest idea whats being proposed. Clearly the people involved and their motivations will be critical.

Lots of talk here about investors as thats the word being used to describe but I seriously can't imagine anyone is "investing" in the true sense of the word where they expect to make a profit out of it. I'm hoping that its football people who admire what we've been trying to do and have the resources, expertise and time available to help drive the club forward from here.

Its not like we're in a rosy position at the moment, another year of huge operating losses despite hugely increased attendance figures is really tough to stomach. The current board are clearly strong businesspeople but we just don't have the capacity to maximise the opportunities available. How much time and energy do we have available to exploit commercial opportunities? How many contacts do we have with big clubs to arrange a couple of big pre season friendlies?

Operationally I think we're just about managing week to week but I just don't see that currently we have the capacity, expertise, or contacts to take the opportunities available. Ironically, the type that could turn the operating loss in to a break even or even a profit. That's not a dig at the board, it's just what I see as a reality of the situation and what's needed in terms of manpower and network.

So we need to tread very carefully, listen to what is proposed and ensure there's a consitituion that is palatable before deciding on the direction of the club. The chance to do this diligently has been reduced a bit by the decimation of our existing board and the complete undermining of the fundraising launch it has to be said. Doing nothing isn't an option, that's for sure.

Finally, some people were offended by the use of the term laughing stock last night. I think its actually a fair label bearing in mind the publicity of the last few weeks, the aggressive official statements and general incompetence we've been displaying. As someone who has been proud to be part of this journey for the last few years that's something I feel let down by.

[Darlogramps]

The loss was made up of £30k lower revenues, £35k overspend on playing budget, £15k carried forward from previous season.

In the actual return home to Darlo year (not a full season) we lost £65k.

£35k of that was because of an overspend on budget.

This is incorrect. 30k was because of reduced income (BM gates being lower than anticipated), 35k was because of additional costs (in particular, having to have employed safety officers on matchdays), with a 15k carry over.

And you can't magic away the 15k, as you've tried to do. It still needs to be dealt with. It still counts, even if you reduce the other losses.

You stated the overspend was down to MG. This is again incorrect. There are several factors which made it up, the board stated as much.

If anything, it seems the overspend was down more to the board setting the playing budget too high. I haven't read anything which suggests MG spent more than was given to him this season.

We've seen the one in, one out policy with player recruitment as an example of this.

If we reduce that out we are instantly down to £30k in terms of where revenues were budgeted at and where they ended up.

It was stated that 500 fans would be £100k per year. 150 fans would be extra £30k.

This is too simplistic. Cut the budget, you cut the quality of the football. We're less competitive meaning attendances drop. Meaning less revenue and another budget loss.

And what about any additional costs? Every year something seems to have cropped up. You need to have contingency.

And another factor. We've got a high number of concessions, especially younger people. This is great but obviously doesn't pay as much as a full adult ticket.

That's why saying 150 extra fans = £30k is far too simplistic, and I hate it when anybody throws figures around like this.