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Spirit of Shankly - The Next Steps

Spirit of Shankly were pleased to meet with NESV representatives following their invitation to do so as a result of their successful takeover of Liverpool Football Club.

The engagement with the Union by the new owners effectively sees the start of a new era for the Club and the Union. As such, this is a good time for us to consider and review the Union’s role, remit and strategy development. With this in mind the Union Management Committee have undertaken some preliminary work in looking at the current Union position and how this can be developed going forward.

However, as always, we need to consult with our members and ask what role members see the Union playing in the future. We also need to address those issues considered important by members in the short, medium and long term that they wish to see the Union Management Committee working towards.

We would like members to consider the review proposals detailed below and to engage with us over the issues as we see them and to confirm their approval, seek amendments or make alternative suggestions. We would aim to consider all responses in a timeframe that allows us to probably call an EGM on the 18th December where we would hope to have a representative of NESV present following which we will further develop our strategy for members’ approval.

The starting point for this review is the Union aims and objectives (detailed at http://www.spiritofshankly.com/) – the Management Committee view is that these remain relevant and appropriate and subject to agreeing the priority for the current challenges the Club and Union face, they should remain unchanged.

The Management Committee consider the three issues most important to members relating to the Club at the present time (and a fourth issue solely relevant to the Union) are as follows:

 

 

OWNERSHIP

 

STADIUM SOLUTION

 

SUPPORTER INVESTMENT

 

(MEMBERSHIP)

 

 

 

The Management Committee’s current view in relation to each of these issues is as follows:

 

OWNERSHIP

During Summer 2010 there was significant work done behind the scenes in relation to what might happen if a sale of Liverpool Football Club could not be completed or if RBS called in the debt on the Club. This work accelerated after the negotiated working agreement with Share Liverpool FC to the extent that SOS-SL were able to obtain an invitation to meet with Barclays Capital (under a strict media embargo) with a view to being invited into the sale process. The result of this meeting with Barclays Capital was that SOS-SL were given the criteria upon which any potential purchaser would be judged.

The five criteria (plus “Stadium Solution” that we are dealing with separately) listed below provide a good starting point for us to request from the new owners, details on how they intend to approach the ownership of Liverpool Football Club and it would be our intention to put the following points to them for clarification:

Price

We feel that it is important that the detail of the amount that was actually paid to purchase the share capital of the Club is placed before the supporters. This transparency allows supporters to see the sums being invested and to monitor the promises being made by any new owners.

Certainty

While this criterion relates to the provenance and deliverability of funds, it equally applies to the supporters wanting to know how the purchase funds will be applied and from where they are coming. This was a crucial area that the original 2007 Board tried, but failed, to address.

It should be recognised, and used as a positive by the new Board, that they are now dealing with a large and financially savvy supporter base who consider that one of their rights as supporters of Liverpool Football Club is to be treated with respect and as PART of the Club, not as consumers of its product. There is a strong desire to ensure that the last three years are not repeated and as much transparency as possible would go a long way towards this.

The reports we have received have mentioned no debt burden (other than current stadium debt) being placed primarily upon the Club. It has been assumed that the share purchase funds come either from cash reserves, borrowed funds or a combination of the two from within NESV with LFC becoming part of the group of NESV as a wholly owned subsidiary.

If the funds are borrowed, in all or part, at group level then supporters would ask what assurances there are about any borrowing not being moved to the Club level and secured specifically against the Club’s assets rather than against the totality of the group assets.

Further questions arise from this including the effect of the overall health of the group and how essential this is for LFC in terms of ongoing investment. How will this operate? If LFC trades profitably can its profits be applied elsewhere within the group or are they ring-fenced for LFC? What if LFC suffers a downturn? How will the group support LFC in those circumstances?

 

Capital Structure

As mentioned above it is assumed that LFC will be a wholly owned subsidiary of NESV. The area of interest for supporters is the delegation of powers to the local Board in terms of what powers are held at group and local level.

In addition, as can be seen later, this also has a relevance to the powers of the Board, its voting rights among its Directors and the implication for any supporter investment.

 

Players’ Trading Account

The Spirit of Shankly takes a very traditional “LFC” view of playing matters. We demand success on the pitch. It is the reason the Club exists - “to win trophies”. No other reason.

As such we know the part supporters have to play in supporting the Club. We have traditionally asked our Club to give our managers the best chance of competing and this request stands.

We do not publicly seek the removal of managers or players. We expect the Club to have appropriately qualified and experienced football decision makers in place to act on our behalf.

We also accept that investment in players should come from a sustainable and sensible business plan, not unfettered, unwise or unlimited spending. However, we do expect the profits made by the Club to be primarily and significantly invested on the pitch with the aim of achieving on the field success. Money leaving the Club by way of interest payments, “expenses” or unreasonable dividends will be a repeat of the experience of the last three years under the ownership of Hicks and Gillett.

 

Fit and Proper

The Directors and Owners test from the English Premier League (EPL) that you have passed has its limitations and having met with the EPL we are aware of the limits of the tests they apply. The previous owners also passed these tests. For Liverpool supporters the “fit and proper” test is deeper rooted.

We want owners who recognise the culture of Liverpool Football Club, who understand its history and what has made us the Club what it is. We want them to recognise the fact that an effective change in management policy and approach is the key to success. Applying traditions with respect to the past while moving forward in a progressive and positive way. It is recognised, appreciated and respected that NESV have sought to engage with us and other supporters to gain their views and learn about these traditions.

Modest and quiet management in the Boardroom should contrast with the passion and will to win on the terraces and pitch. If we have the right owners and trust is rebuilt then this will allow supporters to continue supporting, leaving the Board to manage the Club.

 

These questions will be put to the owners at the next opportunity we have to meet with them subject to the approval of our members.

 

STADIUM SOLUTION

The Management Committee consider the following issues to be the most pressing as far as members are concerned:

Groundshare - the Union’s current agreed position is a policy of total opposition to a groundshare. Subject to members’ views this needs to be restated as the current agreed Union policy. A fresh mandate would be sought by a vote of all members following the EGM.

New v Refurbished Stadium - the current agreed Union position is that a proper and balanced feasibility study putting forward the two options available needs to be completed and any decision should involve consultation with supporters and the local community and should result in a detailed explanation of the decision and how this was reached.

Ticketing – the owners should be prepared to answer in detail (once the size of any new/ refurbished stadium is known) what they plan to do regarding allocation of tickets (STH/Aways/General Sale/Corporate/”Others”). Additionally any detailed pricing plans being considered in the short term (2011/12 season) need to be disclosed with the reason behind them. The Management Committee have already expressed an opinion regarding the lack of window and cash sales at Anfield (plus the pricing policy) which is having an impact on the ability of local supporters, particularly young people, to attend matches.

Regeneration – clearly the local community groups will have the major say on this issue but the Management Committee are also carrying out a consultation exercise with local community groups, residents and L4 and L5 members to hear what the Union can do to support their aims and objectives.

 

SUPPORTER INVESTMENT

At our meeting with John Henry and Tom Werner we left them with proposals of the investment strategy that was being adopted up to the time that they became owners of the Club. This focused on majority ownership and is now in need of revision.

SOS-SL are developing a revised strategy that proposes a minority stake in the Club and the Union will be promoting the Credit Union and encouraging the Club to support such a scheme once agreed with supporter groups. The aim would be to have Board representation in return for supporters investing a significant stake in the Club.

Members are asked to support the ongoing work being done by the Union and SOS-SL on this issue.

 

MEMBERSHIP

Our current membership stands at around 9000 members. To retain and enhance our credibility we need to grow our membership quickly and aggressively. Suggestions have been:

a. Reduced membership fees? This would have a significant impact as the Union does require funds to operate.

b. Free membership (relying upon events, donations, merchandise for income)?

c. Two tiered membership (Full and Associate?)

d. Youth membership opening from February 2011

 

Members are asked for their views about increasing membership and any ideas they might have.

 

 

This consultation is open now – members are asked to respond by email to secretary@spiritofshankly.com please complete the subject box of your email with “EGM” to make certain it is properly routed.

We look forward to hearing from you.

 



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