[Archived] The Blackburn Football Charitable Fund

[Daniel Louis Grabko (Dan)]

What is the basis for the assumption that wages will not rise at the same level as TV money? Correct me if I'm wrong, but haven't wages historically risen in line with TV money? Isn't that the very reason that so many clubs are going deeper and deeper into debt, instead of turning a profit? There may be something I'm missing, once more, but whereas you've taken the most conservative estimates in every other area, here your calculations seem optimistic to me.

However, the generous £15 million annual transfer market budget you allow, could be used to plug this gap. I remember that John Williams had to do something very similar, when he was in charge: making us a trading club with a high wage budget, rather than a buying one with a low wage budget. After all, there was a much higher correlation between wage bill and league position than there was between transfer expenditure and league position.

On the subject of John Williams, I notice that he is listed in the 'prepared for' section of your proposal. Has there been any contact? Securing his support would do a great deal for the credibility of the venture.

First of all, thank you for taking the time to properly sit down with the propsal, you are making very good points and raising very valid concerns for debate.

Wages when seen inside a single season have this relationship, and I remember reading one of John Williams' explanations about the stratedgy he used when setting his budget policy regarding this issue, and was a very astute way of doing things. My assumptions are based on the increase in base TV money, and exclude considerations for league position merit pay, which was one of the key ingredients of JW's wage/transfer strategy. So that's my explanation for that.

As far as having John's name on the document - I have been informed that he was being made aware of this proposal and could be very interested in it, as well as the possibility of the opportunity to come back to Rovers should the circumstances be right. But, I have had no direct contact with him, so cannot confirm this. Also, most of the names on the document were just those I thought would be the most relevant and interested parties thay may have the ability to provide support and guidance as well as endorsement and assistance with the wole initiative, so in a lot of cases, I just put names on there, and have only had direct contact with Wayne and Gary of all the people there.

[OscarRaven]

Ten Grand for a 1 / 20,000th say in how the club is run. I know your looking for a 'mix' of investors but its not very attractive to the 'average' supporter.

Given the prices involved you might as well link Season Tickets to the first share purchase, and subsequently offer it as part of the dividend. Those who don't want them can tick a box (donation to local organisations as free tickets perhaps).

How much of the shares do you envisage being purchased by 'one share only supporters'.

[Daniel Louis Grabko (Dan)]

Ten Grand for a 1 / 20,000th say in how the club is run. I know your looking for a 'mix' of investors but its not very attractive to the 'average' supporter.

Given the prices involved you might as well link Season Tickets to the first share purchase, and subsequently offer it as part of the dividend. Those who don't want them can tick a box (donation to local organisations as free tickets perhaps).

How much of the shares do you envisage being purchased by 'one share only supporters'.

Hey Oscar,

The plan was actually as a next phase to go into a lot more detail about "what's in it for the shareholder" and I had in mind a bunch of perks, like a percentage off of the ST price, for example, and Club merchandise, like shirts. Then maybe even things outside of Ewood, like the club partnering up with local businesses, giving shareholders special "owner discounts" at restaurants and shops or something. Also buying a share could allow you be exempt from any membership fee into the supporters' organization that actually owns the shares of the Club and exercizes authority over the Board of the Club. Thes are all things open for discussion.

As I said before the share prices and number of shares are infinitely scalable, and that is why it is very important to go out there and let us know what you think when Wayne publishes the market data collection site. What we want to do is find a level that will appeal to the most people to get the most wide-spread investment from the supporters. Getting to five digits on a global scale with supporters would have to be the goal really.

[Daniel Louis Grabko (Dan)]

Wayne has now published the market data information gathering website in relation to the Fund.

Please go there and have your say, it is vital to gaining an understanding of what may or may not be viable in all categories of the Fund.

http://blackburnfootball.blogspot.com

[rovers11]

It's difficult to see the average fan would be able to afford £10,000 to buy a share. However, there is nothing to say each fan has to buy a £10,000 share. Our wealthier fans could perhaps put half a million, a million or whatever. Others could pay, perhaps, a few thousand or even a few hundred. By wealthier fans, I am talking about Battersby, Hemingway etc, maybe even wayne wild (although, i dont know him personally so not sure what his wealth is).

This would generate enough money to buy the club. However, a football club needs huge funds to be successful. My idea would be then to sell 50% of the club to a wealthy investor for a small fee. That way the charitable trust could vet any new investor to make sure they are right for the club.

Of course, that is easier said than done but not impossible...

[Daniel Louis Grabko (Dan)]

It's difficult to see the average fan would be able to afford £10,000 to buy a share. However, there is nothing to say each fan has to buy a £10,000 share. Our wealthier fans could perhaps put half a million, a million or whatever. Others could pay, perhaps, a few thousand or even a few hundred. By wealthier fans, I am talking about Battersby, Hemingway etc, maybe even wayne wild (although, i dont know him personally so not sure what his wealth is).

This would generate enough money to buy the club. However, a football club needs huge funds to be successful. My idea would be then to sell 50% of the club to a wealthy investor for a small fee. That way the charitable trust could vet any new investor to make sure they are right for the club.

Of course, that is easier said than done but not impossible...

Or sell that large investor of yours a crap load of shares in the investment fund and not the club. There are very good reasons for doing this instead of owning the club outright, which I have outlined in the other thread (wish a staffer could merge the two threads - pretty please???)

Anyway, your suggestion is not a new one and could very well work just as well - as long as the basic investment fund model is intact it is win/win if you go into it knowing what the goals and activities of the fund are going to be.

[rovers11]

Or sell that large investor of yours a crap load of shares in the investment fund and not the club. There are very good reasons for doing this instead of owning the club outright, which I have outlined in the other thread (wish a staffer could merge the two threads - pretty please???)

Anyway, your suggestion is not a new one and could very well work just as well - as long as the basic investment fund model is intact it is win/win if you go into it knowing what the goals and activities of the fund are going to be.

Yes, true. This also seems like a good idea. There are various different ways it could be achieved. I'm all for it.

[StubbsUK]

I've been doing a little research into this from the point of view looking at how Bundesliga clubs are run, they operate on a 50+1 model where fans own at least 51% of the club.

There are several clubs in the Bundesliga with populations similar or smaller than Blackburn & they manage quite well.

Hoffenheim, Wolfsberg & Kaiserslautern all have similar populations in their respective towns.

10k might be a lot for an individual, but club together with family, or form a syndicate in the pub, get the Sunday league team you play for to chip in ... there are a 1001 ways to get a share.

1/20,000 might seem a small proportion, but it's infinitly better that 100% of NOTHING!

THINK BIG Rovers fans THINK BIG!

[Exiled in Toronto]

I am surprised how many people felt the urge to comment on this without actually having read it properly.

A good, left-field idea. Keep developing and pushing it as the club needs as many options as it can get, and all of them sound unlikely at this stage given the retreat to the Pune bunker.

[Captain Dunsel]

Dan,

You are projecting spending 15M in net transfers every year through 2035. That sounds like a lot of money right now, but in 23 years? That might not even buy you half an overrated Geordie striker. Won't inflation alone require additional investor contributions in order to avoid draining down our fund balance? Otherwise it smacks of Venky planning i.e. "We'll just chip in 3-5M every year and everything will work itself out."

[bestierover]

Dan,

You are projecting spending 15M in net transfers every year through 2035. That sounds like a lot of money right now, but in 23 years? That might not even buy you half an overrated Geordie striker. Won't inflation alone require additional investor contributions in order to avoid draining down our fund balance? Otherwise it smacks of Venky planning i.e. "We'll just chip in 3-5M every year and everything will work itself out."

With all due respect, whilst inflationary pressures will undoubtedly occur between now and 2035, they may well prove to be less drastic than you might expect. Inflation is a key economic priority to anyone with a touch of common sense.

Further, I would expect a slow down of the recent 'investment' in the premiership. In fact, it is very possible that many unsustainable business will force new regulation and / or deflationary pressure upon player prices / wages.

[Captain Dunsel]

With all due respect, whilst inflationary pressures will undoubtedly occur between now and 2035, they may well prove to be less drastic than you might expect. Inflation is a key economic priority to anyone with a touch of common sense.

I don't have the numbers in front of me, but I'd be willing to bet "football inflation" has far outstripped economic inflation over the past couple of decades.

Further, I would expect a slow down of the recent 'investment' in the premiership. In fact, it is very possible that many unsustainable business will force new regulation and / or deflationary pressure upon player prices / wages.

In all of the history of professional sport, how many examples of long term wage deflation can you identify? I'm asking because I'm actually curious about this.

[bestierover]

I don't have the numbers in front of me, but I'd be willing to bet "football inflation" has far outstripped economic inflation over the past couple of decades.

In all of the history of professional sport, how many examples of long term wage deflation can you identify? I'm asking because I'm actually curious about this.

Indeed, inflationary pressures in recent decades have likely been greater within football than any other sector. Will they continue?

Deflationary aspects within any sport? Fair point. I struggle for examples without a period of very time consuming research. The bubble looks to be at bursting point, however.

Did the general pricing and wage structure in Italy not take a hit back in the day when Serie A was "the greatest league in the World"? Was that example not that which prompted The Bundesliga to enforce a structured policy in that regard?

[Daniel Louis Grabko (Dan)]

I don't have the numbers in front of me, but I'd be willing to bet "football inflation" has far outstripped economic inflation over the past couple of decades.

In all of the history of professional sport, how many examples of long term wage deflation can you identify? I'm asking because I'm actually curious about this.

The Fund as presented in the proposal easily outperforms real inflation rates in the UK on an annual basis for any value over the past 20 years.

As to the second argument. You are absolutely correct in that the inflation in football especially has outstripped everything else in the world, including all other professional sport with the possible exception of Formula One.

I am not, nor have I ever claimed that my investment fund solution will see us winning the PL again, being in the Champions' League, etc. but it will provide for a competitive Premier League financing level, that should easily see us never have to worry about relegation. It would hopefully give us a realistic expectation of comfortable mid-table or top ten finishes, with an outside chance of qualifying for Europe via league position if we get on a good run.

The rate of explosive "inflation" cannot continue under the current league format, as it will exclude all but 3-4 clubs from really participating, and even those only on the merit of ultra rich oil/business tycoons or mid-eastern royalty. This is already starting to happen. In order for the cost of entry to keep increasing as it has during the last 10-20 years, there will have to be a real European Super League that break-away clubs form. I have my doubts that we would ever be asked to join such a league.

[dave birch]

Dan, if I'm not mistaken, in this country (Australia) to offer something in the form you have, the details have to be set out in a prospectus, attached to which, should be an application form.

All prospectii (?) usually state, at some point, that you could end up losing your money, as there is no guarantee, and you invest at your own risk.

To do anything otherwise is iirc a breach of the law (certainly in Australia).

Notwithstanding that, it's a good initiative, and anything that helps the rovers in my mind is ok.

[Daniel Louis Grabko (Dan)]

Dan, if I'm not mistaken, in this country (Australia) to offer something in the form you have, the details have to be set out in a prospectus, attached to which, should be an application form.

All prospectii (?) usually state, at some point, that you could end up losing your money, as there is no guarantee, and you invest at your own risk.

To do anything otherwise is iirc a breach of the law (certainly in Australia).

Notwithstanding that, it's a good initiative, and anything that helps the rovers in my mind is ok.

You are absolutely correct, Dave - and this document is not meant to be the final document given to investors. It is as stated, a proof of concept business proposal, and does not conform to a legal form of any kind in its current iteration.

[Daniel Louis Grabko (Dan)]

I will be recording a podcast hosted by Stuart Grimshaw this evening. Mike Taylor, Rovers supporter and editor of the Northwest Business Insider will be joining us to talk about the concept of the Fund idea. I will come back with a link when I get one.

[EwoodDawn]

Done the questionnaire, Dan. I like the notion of being a shareholder. BUT - hate to be the harbinger of doom, however we do live in a fairly selfish society where we've almost been conditioned to look after ourselves and our loved ones before others. With the sorts of 'middle class-ish' fans who might be able to raise 10k for the fund, you'll be competing with their desire to put that amount aside in case their children want to go to uni and need a hand paying their fees/their desire to help out their children with a deposit for their first house (which is increasingly difficult for young people to raise given the lack of employment opportunities for their age group) and/or their desire to help pay for their children's future weddings.

One thing that might loosen people's purse strings would be if the 'ITK'ers would just come out with the facts if we really are in imminent financial peril. Otherwise doubts as to the need for this fund might put people off.

[Daniel Louis Grabko (Dan)]

While I fully understand your concerns, Dawn, woth respect, I've said many times that this is not the finished article, and it is obvious that 10k is not a working number. It is a proof of concept at the moment that shows the viability of using an investment fund to support Rovers into the foreseeable future. Obviously the mechanism used to generate the funds required needs looking at and adjusting. That's why the survey is out there. But the very best situation for the Club, the supporters, and the community is for a majority supporters/local ownership, and that is what the idea is trying to achieve.

[Sparky Marky]

It really is a non starter mate....I'd concentrate on something worthwhile if I was you. Good effort though...

[dave birch]

It really is a non starter mate....I'd concentrate on something worthwhile if I was you. Good effort though...

You say it's a non starter, but give no reason. Why?

Why is it a "Non starter"?

There maybe people out there that would want to part of it.

Run with it, I say. If it fails then come back and say it didn't get off the ground, but don't say it's failed before it's given a chance.

With an attitude like that, we'd still be living in caves.

[Sparky Marky]

We're struggling to get people to pay the entry price into the ground.....never mind investing thousands. It's obvious that we just do not have the fan base for this. It's a nice thought, kind of warm and safe, but it will never happen so why even waste time and effort .

[dave birch]

We're struggling to get people to pay the entry price into the ground.....never mind investing thousands. It's obvious that we just do not have the fan base for this. It's a nice thought, kind of warm and safe, but it will never happen so why even waste time and effort .

So, in the absence of any solution from you, we should just sit and watch the slow (but with increasing speed) destruction of BRFC?

You might not think that Dan's idea will work, so I'd suggest that you might want to work on one that might fit the bill, and present that to the faithful.

[Daniel Louis Grabko (Dan)]

So, in the absence of any solution from you, we should just sit and watch the slow (but with increasing speed) destruction of BRFC?

You might not think that Dan's idea will work, so I'd suggest that you might want to work on one that might fit the bill, and present that to the faithful.

Easy, Dave, he's just trying to provocate - according to Sparky Marky, neither you nor I have any place being supporters being that we don't live in the immediate vicinity of Ewood Park - and I quote him, "Local club, local people - don't see where you fit in." If the world had his attitude, we'd all still be living in caves.

There will be an updated version of the proposal early next week that will try to incorporate the best ideas I've gathered form all those who have left there input, whether positive or negative.

In the mean time, here is the Rovers Podcast I did last night with Stuart Grimshaw and Mike Taylor. Have a listen!

[Daniel Louis Grabko (Dan)]

New Post at the Investment Fund's website: Case Study: MyFootballClub

Talks about prior initiatives relatively similar to the Investment Fund proposal as well as discussing the proposed ownership structure which previews the new version of the Business Proposal that will be published over the weekend.