In a month where the Jambos went from strength to strength on the pitch, moving up to 2nd place in the SPL table, FoH has been busy preparing for our second AGM. In this month’s blog we confirm AGM arrangements, provide news of our fan ownership away day and also share notes from our Governance committee on the “50+1” German ownership model.
AGM and election arrangements
Members should now have received confirmation of the arrangements for the Foundation’s Annual General Meeting to be held at 2pm on Thursday 3rd December. Documents included in the recent correspondence include notice of the AGM, proxy form attendance card as well as the signed annual accounts for the year ending 30 June 2015. These documents are now available for member’s inspection at this link: http://www.foundationofhearts.org/elections/. The accounts show that during that period the Foundation provided £1,472,000 of working capital funding to Heart of Midlothian Football Club.
While the formal business of the meeting is to consider the Company’s financial accounts for the year ended 30 June 2015 (together with the Directors’ Report) we will also report on the Foundation’s activities in 2015 as well as announce the result of the ballot to elect our new Director. Four members have stepped forward commencing what will be the Foundation’s first competitive election process. In alphabetical order, they are:
- Andrew Burton
- Scott Culbertson
- Keith Sorbie
- Louise Strutt
We are grateful to each of them for stepping forward. You can find out more about them and their vision for the future at the link below. Please take time to consider their election addresses, ask any questions you may have and cast your vote. This is a significant landmark our journey toward fan ownership and every vote will count.
Contributions to the Foundation increased in October despite member numbers remaining broadly consistent with the previous month. This was thanks in part to an immensely generous £1,800 top up payment from father and son, Alan and Daniel Morrison. Daniel, a 13 year-old fan, saved up an incredible £900 of pocket money by doing extra chores with Dad Alan agreeing to match the amount he raised. It was wonderful to hear Alan and Daniel speak about what the Club means to them and their family and was yet another reminder of the importance of ensuring the longevity of our beloved Club for generations to come. Thank you to all who are part of making that happen.
Fan Ownership Away Day
Hearts travel to Fir Park on 28th November to play Motherwell and we have teamed up with the Well Society to mark this occasion as a celebration of fan ownership. The FoH Board will be in attendance and we will be on hand to answer your questions and sign up new pledgers at our first ever match day stall in the away end. Earlier this month we offered members the chance to nominate match day mascots and were delighted to receive over 200 responses. The 15 lucky winners were randomly selected and announced on our Facebook page last week. We hope they have a fantastic day out.
As well as having Foundation and Well Society mascots there will also be a half time penalty shootout and a few other surprises. The Club also announced last week that the team will be wearing the new FoH tribute kit at Fir Park. For the first time in their history, Heart of Midlothian Football Club will take to the pitch for a League match with the names of thousands of supporters who saved the Club on their strip. It promises to be a great occasion and we hope to see you there. Further announcements will be made in due course so please stay tuned to our social media channels…….
50+1: The German Model
This section of the blog looks in more detail at the fan ownership structure adopted by many clubs in Germany known as the “50+1” model. The information provided is a factual summary and is not in any way an avocation of the 50+1 model nor a suggestion that we intend to adopt this model or any element thereof. The intention is purely to share our ongoing research with members for consideration and comment.
Until 2000 Bundesliga regulation required that all participating teams operated as not for profit member associations. The rule was predicated on the principal that clubs play a crucial part in their local communities and on the belief that such a model of governance promotes economic stability and long termism in decision making, thus preserving the integrity of the league competition.
The league’s governing body (The German Football Association) came under increasing pressure to change its model as other European leagues appeared to thrive under much less restrictive rules. The Association finally relented in 2000 when a new system was introduced allowing clubs to choose from three potential governance structures: membership body, public company or private company. Whilst this may have appeared a dramatic change in direction for German football the governing body retained much of the spirit of the previous rules by mandating that where one of the new models were adopted by a club, 51% or more of the voting shares must still be retained by a membership body. It should be noted that two exceptions were made in the case of VW Wolfsburg and Bayer Laverkusen owing to the fact that two German behemoths (Volkswagen and Bayer respectively) had substantially funded the clubs for more than 20 years preceding the change in rules. Both entities were allowed to hold a controlling stake in the clubs they had traditionally funded.
Under the 50+1 model various different governance structures have emerged. One of the most common arrangements is a structure under which the club is operated by an Executive Board with the interests of the membership body represented by a Supervisory Board of 6-12 individuals. The Executive Board is fully responsible for the day to day operations and running of the club with a constitution determining how it interacts with the Supervisory Board. The Supervisory Board will typically have the remit of hiring (and firing) the Chief Executive and may also have certain matters reserved for their approval. The Supervisory Board typically contains at least 1 individual elected from the membership association and will have an overarching goal of acting in best interests of the membership and the club at all times.
Since the change in rules the Bundesliga has continued to operate as one of the most successful leagues in the world and is sometimes held up a shining example of how financial stability is achievable within modern football. FC Bayern, for example, are the 3rd richest football club in the world by revenue according to Deloitte (Deloitte Football Money League 2015) and have maintained profitability despite high running costs. They also do not appear to be an exception; in the 2013/14 season two thirds of German football clubs reported a profit. Whilst there is evidence to suggest this is partly as a result of the 50+1 principal it should be noted that German clubs undeniably benefit from operating within the largest economy in Europe. Corporate sponsorship levels in particular are significantly higher than most European comparators (292m euros or 60% of FC Bayern’s 2014 revenue came from corporate sponsorship, compared to 232m at Real Madrid or 226m at Manchester United; the two richest clubs in the world). That said, the 50+1 model is undeniably an illustration of how a form of fan ownership is currently operating and breeding success at the highest level in football.
A reminder if you have not yet seen our ‘Keeping the Hearts Beating’ video mentioned in previous blogs this can now be viewed here. The video tells the story of how the fans of HMFC saved the Club and we hope all members view it with pride.
We hope you enjoyed reading our November blog and welcome any comments.