Quote: Nothus "Is anyone else a little concerned by this, or am I just worrying over nothing?
Part of our problems under the old regime was the ridiculous structure of shareholders we ended up with, what's to say it won't go that way again if Omar decides to dilute his control this way?
Hopefully it's just me still being paranoid because of what happened last season.'"
A lot would depend on factors like:
- what class of shares would be issued (i.e. same class as OK's shares, or a different class)?
- if the same class, what % of the total equity OK is prepared to surrender?
- if a different class, what rights (especially voting rights), if any, would attach to those shares?
- whether the shares had to be held by individual holders, or whether a Supporters' Trust could acquire shares on behalf of its members?
The answers to the above would give a better indication of whether this would be primarily a fund-raising scheme, or primarily a means of securing more active engagement of the fanbase with the club, or some combination. It surely has to be primarily the former?
The previous company's board (before they were ousted) told us they were looking at doing something similar, but were hamstrung by the other major shareholders having to agree to dilution of their holdings.
On one hand, I guess I'd be a bit disappointed if the shares were something like ""B" ordinary shares with less/no voting rights, or preference shares - which are to all intents and purposes a permanent loan conferring no real rights at all (unlike debentures). In that situation, you'd effectively be making a donation to the club, but you would hope that in exchange you would receive some preferential benefits as a "shareholder". In particular, though, you would look to some form of formalised representation on the board, and ideally through a democratic supporters' trust as happens elsewhere and certainly not through someone appointed by the club.
By the same token, I'd be horrified if the plan was to have a majority of the voting share capital in the hands of a wide range of small shareholders. Unless these had to be represented through a supporters' trust, and unless other safeguards to allow an executive board to function were in place you'd almost certainly get total anarchy. That is the risk you rightly allude to, and it would concern me greatly.
I'd be totally gobsmacked and horrified if the latter was envisaged, to be honest. I'd be not in the least bit surprised if it was more like the former, as that is how I would look to do it in their shoes. In exchange, you would hope for fans' representation on the board or at some other level where fan shareholders felt they had formal representation. What would be key then would be just who would represent the fans, and how democratic their appointment would be?
Presumably the company would remain a private company, as it would presumably seek to restrict the right to transfer your shares? Or those shares would anyway not confer voting rights. That would (I think) avoid the need for having to produce and issue a formal prospectus - which costs a bloody fortune and IMO would not help at all.
