The Great Disconnect - why we love our team but need the club to rebuild our trust

[Woolly Blue]

Shall we put you down as a 'maybe' then?

There seems to be a problem with my phone at the moment. I was expecting a call this morning but, so far, zilch.

 

[Kev50]

I would swap the words 'club' and 'team' in the title

 

[orly]

I would swap the words 'club' and 'team' in the title

Actually that's how I'd see it too, good point

 

[hibbo'sclass]

There seems to be a problem with my phone at the moment. I was expecting a call this morning but, so far, zilch.

Excessive use of the night-vision camera on Ainsdale beach will drain your power.


*told by a friend

 

[Gladystweet]

Excessive use of the night-vision camera on Ainsdale beach will drain your power.


*told by a friend

Turtle watching?

 

[Groucho]

I would swap the words 'club' and 'team' in the title

Excellent point

 

[hibbo'sclass]

Turtle watching?

That's the one.

 

[hibbo'sclass]

Hi Steve. For the avoidance of doubt there are two motivations in what I wrote. One was as you say to promote discussion, but the second was to put on record the poor communications and governance of the club and possible remedies to this situation. I agree with your point about discussing the issues rather than the individuals.

There is a huge disconnect between what is good for the football club and what is good for shareholders. The fact that for the last two decades the board has consisted largely of the largest shareholders amplifies this point. The strategy of Premier League survival on the back of no investment has paid rich rewards for shareholders in terms of the value of their holdings - it has not however maintained our position at the top of the game, but only increased the gap between ourselves and other leading clubs.

In addition is the failure to recognise the club as a community asset (this could be thrown at all clubs to be fair) and as such the role the fans play in making the club what it is. The disdain for which fan (and smaller shareholder) views are held, and the levels of information are shocking. It is my assertion that the club would be in a better position for addressing these issues. I use the EiTC as an example of positive engagement and the benefits of all parties.

Would you please identify the current specifics of this huge disconnect between company and shareholder interests?

Surely if the company (because in the cold light of day that is what is being discussed here) improves its financial position and underlying asset value by way of higher league finishes, European football and better commercial deals, then the company and shareholder objectives are aligned and achieved. Or am I being too simplistic.

 

[The Esk]

Would you please identify the current specifics of this huge disconnect between company and shareholder interests?

Surely if the company (because in the cold light of day that is what is being discussed here) improves its financial position and underlying asset value by way of higher league finishes, European football and better commercial deals, then the company and shareholder objectives are aligned and achieved. Or am I being too simplistic.

I specified the interests of the club vis-a-vis shareholders rather than the interests of the company. Clearly company and shareholder interests are aligned.

My point is that a board made entirely of major shareholders, representatives of major shareholders and senior executives will only ever act in the interests of shareholders not the football club. As has been proven it is possible to create excellent returns for shareholders whilst maintaining the football club in just above survival mode for nearly 2 decades.

I made reference to the now defunct rule 34 and the custodian role expected of football club directors. Now I understand there is no legal or regulatory requirement to do so but especially given how major shareholders have positioned themselves in the past I believe they have failed totally to live up to that once fine duty.

Thus my conclusion that the interests of the football club can only be served when they are totally aligned with shareholder views of creating a successful and winning football club. That clearly has not been evident under the previous regime.

Moshiri appears to see things differently (by virtue of his recent public comments). I would argue strongly a board made of business people and football related experts will meet both the ambitions of the club and act in shareholder interests.

 

[Kev50]

I specified the interests of the club vis-a-vis shareholders rather than the interests of the company. Clearly company and shareholder interests are aligned.

My point is that a board made entirely of major shareholders, representatives of major shareholders and senior executives will only ever act in the interests of shareholders not the football club. As has been proven it is possible to create excellent returns for shareholders whilst maintaining the football club in just above survival mode for nearly 2 decades.

I made reference to the now defunct rule 34 and the custodian role expected of football club directors. Now I understand there is no legal or regulatory requirement to do so but especially given how major shareholders have positioned themselves in the past I believe they have failed totally to live up to that once fine duty.

Thus my conclusion that the interests of the football club can only be served when they are totally aligned with shareholder views of creating a successful and winning football club. That clearly has not been evident under the previous regime.

Moshiri appears to see things differently (by virtue of his recent public comments). I would argue strongly a board made of business people and football related experts will meet both the ambitions of the club and act in shareholder interests.

I find your last line a difficult one to get my head around. It doesn't mean anything. You want the board to be made up of business people and football experts. Sorry but I really don't Think that means much of anything, and I don't see how you can 'argue strongly ' for it. It boils down to this surely
The guy who owns Everton appoints well and backs him, or he doesn't.All this talk of football experts is just pie in the sky

And That's just s cheap shot saying Bill provides a model for how to run a club whilst providing excellent returns. He's not taken any money out throughout, And only made money when he sold. And he sold when he was over 70 and the premiership is booming (but who could have predicted That would happen when he took over)?

 

[hibbo'sclass]

I specified the interests of the club vis-a-vis shareholders rather than the interests of the company. Clearly company and shareholder interests are aligned.

My point is that a board made entirely of major shareholders, representatives of major shareholders and senior executives will only ever act in the interests of shareholders not the football club. As has been proven it is possible to create excellent returns for shareholders whilst maintaining the football club in just above survival mode for nearly 2 decades.

I made reference to the now defunct rule 34 and the custodian role expected of football club directors. Now I understand there is no legal or regulatory requirement to do so but especially given how major shareholders have positioned themselves in the past I believe they have failed totally to live up to that once fine duty.

Thus my conclusion that the interests of the football club can only be served when they are totally aligned with shareholder views of creating a successful and winning football club. That clearly has not been evident under the previous regime.

Moshiri appears to see things differently (by virtue of his recent public comments). I would argue strongly a board made of business people and football related experts will meet both the ambitions of the club and act in shareholder interests.

Private limited company, hopefully soon to have a single majority shareholder, in the past controlled by a board consisting of a triumvirate (four if you include Sir PC) of significant shareholders. Not an unusual state of affairs in any kind of business, more the norm I would say. Company and shareholders aligned.

The "football club" doesn't exist other than as the limited company, can't be treated as a distinct entity and by virtue of that, the objectives are aligned. On that basis, your 3rd paragraph and my 2nd paragraph are the same. (bet you get more likes though)

Rule 34 - seem to you remember that you said it was introduced in 1899, a more Corinthian age, and whilst applauding the sentiment and reasoning, I would defy anyone trying to run a business to adhere to it's values.

External directors brought in - yes if they add value.

Moshiri I must admit has been disappointing with regard to the board appointments -Ryazantsev I get, Elstone I get (due to being CEO) Barrett- Baxendale has no exposure to running businesses other than being Elstone's deputy, so must be more an image thing, and Keith Harris just plain bizzare. In the fullness of time I hope to see him bringing people on to the board of a higher calibre/ better pedigree.

 

[The Esk]

And That's just s cheap shot saying Bill provides a model for how to run a club whilst providing excellent returns. He's not taken any money out throughout, And only made money when he sold. And he sold when he was over 70 and the premiership is booming (but who could have predicted That would happen when he took over)?

It's not a cheap shot at all to say that the board made entirely of large shareholders and an executive of the club devised a strategy that focused on survival with no new investment or dilution to produce a shareholder return whilst all our rivals invested hugely in the development of their clubs.

Your argument articulates perfectly the point I am making about the poor governance of having shareholders on the board from the perspective of the football club.

I've never personalised any of the arguments I've presented in terms of individuals but I do point out the collective errors in strategy and the reasons for it.

 

[The Esk]

Private limited company, hopefully soon to have a single majority shareholder, in the past controlled by a board consisting of a triumvirate (four if you include Sir PC) of significant shareholders. Not an unusual state of affairs in any kind of business, more the norm I would say. Company and shareholders aligned.

The "football club" doesn't exist other than as the limited company, can't be treated as a distinct entity and by virtue of that, the objectives are aligned. On that basis, your 3rd paragraph and my 2nd paragraph are the same. (bet you get more likes though)

Rule 34 - seem to you remember that you said it was introduced in 1899, a more Corinthian age, and whilst applauding the sentiment and reasoning, I would defy anyone trying to run a business to adhere to it's values.

External directors brought in - yes if they add value.

Moshiri I must admit has been disappointing with regard to the board appointments -Ryazantsev I get, Elstone I get (due to being CEO) Barrett- Baxendale has no exposure to running businesses other than being Elstone's deputy, so must be more an image thing, and Keith Harris just plain bizzare. In the fullness of time I hope to see him bringing people on to the board of a higher calibre/ better pedigree.

If it was a business selling widgets I am totally with you.

But it's not and I think fans and smaller shareholders are entitled to expect major shareholders to recognise that difference and act, delegate, and have different shareholder expectations accordingly.

 

[hibbo'sclass]

If it was a business selling widgets I am totally with you.

But it's not and I think fans and smaller shareholders are entitled to expect major shareholders to recognise that difference and act, delegate, and have different shareholder expectations accordingly.

In the most simplistic of terms, the point is that the company sells a product/service to the customer though.

The ordinary fans are more and more a marginal form of income (would hazard a guess at about 12% gross of revenue in the forthcoming accounts, less if you factor in the hospitality side), the big bucks are TV rights and hopefully commercial sponsorship and hospitality deals (if brought back in house), and in any other business would the consumer be given an executive presence at board level? Probably not.

If the minority shareholders are unhappy with the way things are run, then there are remedies if they feel prejudiced by Board actions.

Sorry if appear to be a bit obtuse, but this is my take on it.

Suppose the rule 34 thing could be re-introduced across all teams if they qualify as Community Interest Companies (don't know if they would) and were forced to register as such by the governing body. Just a thought

As I said many posts back, think it's a case of agree to disagree on certain points.

 

[The Esk]

As I said many posts back, think it's a case of agree to disagree on certain points.

I respect that. I am quite deliberately pushing the boundaries in terms of what happens in the future, however I believe my comments about past governance to be entirely accurate.