The Department for Culture, Media and Sport recently established an Expert Working Group on Football Supporter Ownership and Engagement. It subsequently issued a call for evidence on the barriers to increasing supporter ownership and engagement in clubs.

More detail about the terms of reference for the review can be read here. The AST submission to the inquiry is set out below:

Submission by the Arsenal Supporters’ Trust to the Department for Culture, Media and Sport (DCMS) Supporter Ownership and Engagement Expert Working Group

In 2011 the AST made the following recommendation to the DCMS Select Committee Review into Football Governance:

“We recommend that the DCMS establishes a working group……. that has as its remit to review all the regulatory and fiscal structures that apply to fan investment schemes like Fanshare and recommend additional measures that can be taken to assist them to grow”.

We therefore very much welcome, finally, the establishment by DCMS of this group and are pleased to submit evidence relevant to the position we find ourselves in at the beginning of 2015 in the submission that follows.

1.    Introduction to the Arsenal Supporters’ Trust (AST)

The Arsenal Supporters’ Trust (AST) is an Industrial and Provident Society founded in 2003. Its main objectives are to:

·         Facilitate wider supporter involvement in Arsenal Football Club

·         Promote the interests of supporters who own shares in Arsenal Football Club

·         Facilitate and promote mutual supporter ownership of Arsenal, thereby giving supporters greater representation and influence in how the club is run

Many of our members are personal shareholders in Arsenal Holdings Plc (Arsenal’s holding company) and every member of the Trust shares in ownership of Arsenal Football Club through shares the Trust owns. The AST established the Arsenal Fanshare, a collective investment scheme which currently has almost 2,000 members holding 124 shares in the Club with a notional value of just under £2m.

The AST seeks to work with its members, Arsenal executives, the club’s Board, major shareholders and other Arsenal supporter groups to help maintain Arsenal as a world class sporting institution.

The AST’s primary role at present is to provide opportunities for supporters to scrutinise and question how Arsenal is run. This is achieved through activities such as: the production of independent financial analysis of the report and accounts of Arsenal FC; representing supporters views to the club’s Board and executives, including attendance at the club’s AGM where supporters have an opportunity to ask questions; an annual end of season review meeting with the Chief Executive; and undertaking a detailed survey of supporters’ views on issues such as the ownership structure of the club, the club’s corporate governance and its footballing and commercial strategies, which was presented to all Board members. More information about us and our work can be viewed at www.arsenaltrust.org

The AST recently surveyed its membership on their preferred ownership structure at Arsenal.

95% said they thought it was important that Arsenal continues to have individual supporter shareholders involved in the Club’s ownership and 81% said that they thought the current owner needed to improve his engagement with supporters, agreeing that he ought to make good the commitment made in the formal takeover document:

‘Mr Kroenke has made it a priority to meet with supporters and fan groups in formal and informal settings. He recognises that fans are at the heart of the Club. Their opinions and involvement are important to him. Mr Kroenke fully expects himself, the Arsenal Directors and Club executives to continue to engage with supporters for the long term good of the Club.’

Subsequent to this commitment there hasn’t been a single meeting held.

Historically, Arsenal has benefited greatly over many decades from maintaining stability in its ownership structure, and from having supporters who own shares and are actively involved in this structure.

Plurality of ownership has served Arsenal well and is the best way to ensure the necessary checks and balances are in place to protect the club’s long-term future.  Sadly this plurality is gradually eroding. Most significantly the highly applauded Fanshare scheme, which was endorsed by leading across the football community, and by the Secretary of State and Minister for Sport at DCMS, is having to be disbanded.

This is a result in a change in the ownership structure at Arsenal with there now being a majority owner who launched a takeover bid to take control of the Club. Sadly during that takeover, and subsequently, no priority was placed on continuing to provide support to the Fanshare Scheme which can no longer continue due to a lack of available shares for the scheme to purchase and the knock on effect this has on the shares liquidity.

Traditionally the AST had good access to the Club due to the plurality of ownership and equity structure. There still remains, due to the legal structure of the company being listed on the stock exchange, the opportunity to scrutinise company reports and attend an Annual AGM. It is a very important engagement function and one that we believe should be replicated even where the limited company model no longer functions.

We also note that most Premier League Clubs are owned privately and believe that future policy development has to give greater weight to the reality that fan led groups won’t be able to raise the capital needed to afford to buy their Clubs but instead will look to secure influence and representation through meaningful engagement opportunities with the Club’s owners and directors.

For these reasons the AST currently places great emphasis on the importance of Supporters Trusts having structured opportunities to engage with the owners and management of their Football Clubs. We set out some thoughts below on how this can be created across the football spectrum which addresses the following specific point set out within the Terms of Reference set by the Expert Group:

“Explore greater facilitation of supporter engagement and outline models by which fans and clubs can successfully be involved in the governance and running of football clubs”.

We also note the recent proposals put forward by the Labour Party to legislate for Supporters to be elected onto the Board of Football Clubs. This is a bold and welcome development that recognises the unique position of Football Clubs within society and the importance of supporters having a greater say and role in how they are run. We will engage in detailed debate on this proposal with the Labour Party when relevant.

We have not covered this issue any further in this submission but we do feel it should remain a policy option for the Expert Group to consider and recommend for introduction should it not be able to secure commitment to faster change through measures that don’t require legislation and can be achieved in the next few months, such as we set out below.

2.    Structured Supporter engagement in how a Club is run;access to core financial and operational material and opportunities to engage with clubs’ owners

Whatever the ownership structure of a club, we believe that its governance will be enhanced if supporters have a greater understanding of decisions being made and the opportunity to meet executives and have an input into the key day-to-day and strategic decision-making.

The simple objectives of improving information flows and introducing formal structures in which supporters can be represented does not require any new legislation or Government intervention, but can be introduced as self-regulatory measures within the rule books of the Football Authorities.

In 2011 the AST recommended that the Football Authorities introduced rules that place a duty on their member clubs to engage with official Supporters’ Trusts. The mode of engagement we recommended was specific to the remit of Trusts and covered:

1.    Providing a financial and reporting format similar to that required under the Companies Act -report and accounts for each six months (interim) and full year – supplemented with information already collected under UEFA licensing scheme and other tests that clubs are required to meet under Premier League rules.

2.    Twice yearly meetings between representatives of the supporters’ trusts and directors and/or executives of the club, at which discussion can take place on the performance of the club and the views of the wider membership can be directly reported.

The second proposal would of course require an agreement for identifying official supporters’ trusts and ensuring that they reach minimum standards in the representation of their membership.

The requirement to register as an Industrial and Provident Society should partly address this but we would also envisage a role for Supporters’ Direct to nominate the official trust at each club and act a quasi-regulator of their operations. This would include providing training and advice to trusts on the business issues faced by clubs and the high standards required in their own organisation and operation, such as minuted meetings, elected officials and audited accounts.

3.    Immediate improvements that can be made through policy changes to the Football Authorities Rulebooks in June 2015

In February 2012 the Football Authorities put forward their response to the DCMS on the Reports and discussions that both the Government and the DCMS Select Committee had undertaken into Football Governance[1].

This Report contained a section titled ‘Supporter Engagement, Consultation and Ownership’ (pages 11/12/13) which set out several positive suggestions for improving engagement with Supporters, some of which have been acted upon and others haven’t.

In this submission the Football Authorities made a commitment that ‘Clubs will be required under league regulation to set out in a structured format the ways in which they will consult and engage with different supporter and interest groups’.

We are not aware that this has yet happened and it certainly hasn’t happened with regard to engagement around issues that a Supporters’ Trust would be interested in such as Governance, Finances and Strategy.

The AST believes that as a priority the Premier League and Football League should establish specific rules that all member Clubs would have to comply with based upon them having in place arrangements for structured dialogue between the Club’s owners and directors with their Supporters’ Trust on matters of Governance, Finance and Strategy – as set out in section 2 above.

This engagement should in broad outline mirror the requirements that are provided to shareholders by the directors of public limited companies (as are currently maintained by Arsenal which demonstrates that it is both practical and feasible to do this). Supporters’ Direct have provided more content around what this could look like in their document Supporters’ Trusts: Structured Relationships with your Club[2].

We also note the commitments made by the Football Authorities to host an annual workshop for SLOs and for recognised supporter groups representatives has not yet been fully implemented and hope the Expert Group will remind the Football Authorities of the importance of doing this and inviting Supporter Trusts to this meeting.

There has also been no progress on the establishment of formal engagement to the NGB and PGB Board for Supporter Groups.

Finally in their 2012 paper the Football Authorities set out proposals for ‘League rules to require consultation on specific issues’. They promised to undertake a review of matters on which a Club should be obliged to seek league approval and the consultation that should have to take place with Supporters as part of this decision making process. The AST proposes that this should cover the following specific items:

·         The changing of all or part of the name of a Football Club

·         The relocation of the Club from its existing ground to a new location

4.    Offer to provide oral evidence to the Expert Group

Given the experience in developing the Arsenal Fanshare Scheme, and in having engagement with Arsenal Football Club through the limited company structure, the AST has considerable experience on matters the Expert Group is now reviewing.

The AST is keen that progress is now made. It is long overdue, especially with regard to their being better structured relationships between Clubs and Supporters. We would be happy to provide further input on this issue and to attend any Expert working group meeting the DCMS might establish to review the way forward.

Arsenal Supporters’ Trust, January 2015