Football fans are a unique breed of people. Intensely loyal, passionate, partisan, grumpy, short-sighted, angry and, on the odd occasion, big fans of conspiracy theories. We all have one thing in common though, a bond with a team that we follow through thick and thin. A team that we sometimes openly criticise but privately we will always love. Football fans, Scottish ones in particular, also have this constant feeling that they are an embodiment of their club. Whether this be through season tickets, strips, scarves, memorabilia, family and most importantly those precious memories that we will hopefully hold on to forever.
One thing that can strengthen the connection between a supporter and their football club is fan investment or, taking it further, fan ownership (either fully or partly). These ideas have been around for a long, long time but given the financial climate in Scottish football it is becoming more common for clubs to look at these opportunities. The beauty of our game is that it is far removed from the glitz and glamour of the English Premiership and it is still very much run for the people. Clubs rely almost solely on their fans to provide them with the money to survive and, in the case of Dundee United, it has recently been suggested that we pay 90% of the player’s wages through match day income.
The question at the heart of this particular article is whether or not now is the time that Dundee United follow the example of some other Scottish clubs and open up the possibility of an additional revenue stream that would allow supporters to provide much-needed working capital to the club.
For an obvious Scottish success story in this area the best example is the Foundation of Hearts. Whatever your feelings towards how their financial collapse was handled you cannot help but admire the role that the FoH has played in the rebuilding job at Tynecastle. They are now the single biggest members association in Scottish football, with roughly 8,000 supporters contributing over £125,000 to the club every single month. It is estimated that by 2020 they will have provided Hearts with £10million in investment. This structure allows fans to contribute using a regular cash amount through monthly donations. These vary from very small monthly sums up to much larger deposits depending on what you can afford as a fan. In turn the FoH is heavily involved in the development of Hearts as a club, with their biggest project to date being the redevelopment of Tynecastle.
It would be silly of me to assume that Dundee United could match anything like the figures we have seen at Tynecastle. The financial landscape in Edinburgh compared to Dundee and the sheer size of Hearts as a club means that we wouldn’t ever be able to have a foundation at that level. Realistically though, we wouldn’t need one. Our operating costs are much smaller and the infrastructure here does not need that level of investment. We could however still have a model that would give United a real sound financial footing and one that would ease the strain on the club. A very, very basic set of figures, based on 2,000 members, could look something like this –
2,000 Total Members =
1,500 x £10 per month
300 x £20 per month
150 x £50 per month
50 x £100 per month
Total Monthly Revenue = £33,500
Yearly Revenue = £402,000
Depending on league position, prize money, transfers etc, Dundee United’s annual revenue usually stands at between £3.5million and £4.5million per financial year (based on the last three seasons and bloated fairly heavily by transfer income). If a supporters funded revenue stream provided an additional £350,000-£450,000 then it would not only make a significant contribution to the overall financial state of the club but also to the strategic plans and ambition United may have going forward. Furthermore it eases the pressure that United may have in regards to banking on transfer fees or prize money payments that may not materialise.
For some giant organisations, mainly found down in England, the club income from the fans is so minuscule that there is absolutely no need for fans to even be part of the club. Most research that exists about financial structures in the upper tiers of English football tells us that quite a few teams could literally play in empty stadiums and they would still be fine (and in some cases they would actually still turn quite a substantial profit). Scottish football will NEVER be in that wildly over-the-top financial position so we must look at alternatives.
Before returning to United let’s briefly turn away from Scotland and towards the global game. Worldwide, fan ownership takes many different forms and in each case the reason for having a structure like this has one thread running through it – accountability and identity. A club run by the fans (or at least partly run by the fans) allows for transparency at board level but it also strengthens the club’s identity and, in turn, community engagement. The members who contribute to the club have a say in the way the business develops – it could be through voting rights or public forums but either way the fans are not left in the dark about changes or plans for the future of their team. It is the way things should be.
Although there are many individual clubs that you could use as benchmark models for fan involvement, there are also whole associations that insist on regulating ownership. The goal here is that supporters (sometimes referred to as ‘members’) own part of a club or the whole organisation. An example of this would be in Argentina where every single registered club is technically owned by its members and they are operated as non-profit organisations. Some people call these models “Socio Membership” and for many it is an appealing prospect.
The most famous example of a football association having a blanket rule on majority/member ownership is in Germany with their ‘50+1‘ directive. Under this clause there are meant to be no Bundesliga registered clubs who do not have control over their voting rights, with single majority shareholders outlawed in this case. The rule has its flaws and has been stretched by clubs like RB Leipzig but it does essentially prevent a single entity ‘privatising’ a football club (the only exceptions at the moment are teams who have been funded for over 20 years by one company like Volkswagen with Wolfsburg and pharmaceutical company Bayer and Leverkusen). More and more rich individuals are testing this concept but the German authorities, and more importantly fans, are standing firm.
So what is the point in all of this? Well the point is that in recent years I have time and again returned to the idea of a fan-led ownership structure similar to the ‘members’ idea in Germany. When I see the passion and the connection between the fans and the clubs in Germany I can’t help but think that I want a part of that. The fan culture is different and I know that the clubs in the Bundesliga league system are a million times bigger than United but it is still something that is not only appealing but also, in my opinion, can make financial sense.
Looking at clubs like Dundee United the simple fact of the matter is that unless you land it lucky with a lottery winner or an incredibly rich business person who wants a hobby, there is little in the way of substantial investment available. We have also seen in recent years that individuals who claim to be saviours cannot always be trusted. In the broader picture there are of course one or two self-sustaining sides but they have access to tens of thousands of regular customers and have genuinely huge commercial revenues. For a club with the budget of United we need, in my opinion, a regular stream of cash that is there to assist in the running of the club and/or is also there to support youth development, potential transfers, club projects and changes to the infrastructure of the business. We are not looking at potentially earth shattering sums of cash, more the type of revenue that can help maintain a club and over time help make medium to long-term improvements.
Across Scottish football there are different models that work with a varying degree of success but when you see the current feeling amongst supporters of teams like St.Mirren, Hearts, Hibs and Motherwell you can see a visible shift in fan involvement and engagement. Regardless of their on-field success these clubs have given at least part of the club back to those who matter most. I am not suggesting fans have full-ownership or even majority ownership (as I will point out again later) but there is no doubt in my mind that financial fan engagement and involvement in this way is vital.
The initial chunk of money received by United at the start of each season from sponsorships, the league, season tickets and other one-off injections is not enough to give the club the financial security it needs. We have, based on a rough estimate of home attendances, just a few hundred ‘walk-ups’ who pay weekly and that is not enough (and it is not a reliable source of income). We also have such small margins within our food contract and our kit/shop contract that again we are not receiving enough of a regular stream of cash to help the club maintain a solid financial footing. This all improves if we are to gain promotion but we still need regular income that comes from a consistent source.
If supporters wonder why the club doesn’t reduce prices or run offers across the club it is because we are operating in a financial climate that we can’t take a risk in due to the unpredictable nature of what comes after you reduce the gate prices. Are we going to get 1500 extra fans if we slash the ticket prices for a one-off game by £10? Probably not. However if a guaranteed income was there then the club would be more likely to offer a wider range of incentives and initiatives because the money will be there to help fund those ideas.
As I finish this post some of you may be thinking “this all sounds good, but what’s the point?” and so it is here that I lay my cards on the table. I’m a paying member of the Dundee United Supporters Foundation and I have been since very early on. I am not connected to them in any other capacity, I simply pay my £10 a month and will continue to do so for as long as I can. I would pay more if I could and it might be something I look at in the future.
For me a great thing about this kind of model is that there is no obligation to pay more than you can afford and there are many reasons why you might contribute. It might be that you just want to give a little more as a fan or it might be that you are someone who cannot get to games but you still want to be part of Dundee United. It might be that you want to have your say in the future of the club or it could be that you want to be part of a bigger movement towards fan ownership. As I said I am not affiliated with the DUSF in any actual capacity so I cannot answer many of the questions that some reading this article may have, but I am fully supportive of this type of investment and revenue model.
This article is not suggesting that complete fan ownership is the way forward and in fact I am almost suggesting the opposite. There are many, many very experienced Chief Executives and business experts out there that know far more about running a football club than the average fan. Football supporters cannot be criticised for our loyalty and passion but the idea of a completely fan led club is not necessarily something I would wholly support. However, allowing fans to have a say? Giving fans the chance to be actually involved in a way that is more than just lip-service? It makes sense to me. It is also the case that Scottish football NEEDS supporters to provide it with the cash to survive and using a ‘fan-share’ type model is the perfect starting point to get that ball rolling.
I passionately believe that the future of Dundee United lies with a foundation like the DUSF at the heart of the club. We need the revenue stream, we need the support and we need to give fans that sense of being part of the club in way that runs deeper than just being a supporter in the stand. At the end of the day we are more than that, we are more than just a bum on a seat. We take our club everywhere. To our work, to our family and on our holidays when we take great pride in telling bemused locals that we support Dundee United.
Being a ‘member’, being a part of the actual institution and being woven into the fabric of Tannadice is something that will not only give fans a sense of pride it will also help secure future of the club we all love so dearly.