The Well Society opposition to Motherwell investment proposals in detail as case for fan ownership made

“A minimum of 50% +1 of the voting rights of the club to be controlled collectively by a democratic entity which has an open and inclusive membership based on one member, one vote with no substantial barriers to participation as a voting member.”

That is the Football Supporters Association definition of fan ownership, and it is something that the Well Society are striving to retain at Motherwell. TV executive Erik Barmack is looking to invest at Fir Park, but his proposals have not been backed by the supporter-led majority shareholder.

The Well Society currently owns a 71% stake in the Premiership club, with the rest of the shares spread widely across a number of individuals. Members have put in more than £2million and more than £500k in donations have been gathered. Around £1.1million has been put into the club by the Society, mostly in the form of a loan, and there is approximately £800k sitting to protect the club from possible financial danger in the future.

US-based Barmack used to work for streaming giants Netflix, and now owns Wild Sheep, his own production company. As part of his proposal, the Barmack family would put in £1.95m over six years, earning three spots on the board and the chairmanship immediately for their £300k input.

There are six key reasons why their is opposition from the Well Society, who’s board members voted 6-3 against the proposals. They are the ending of fan ownership, investors sealing “disproportionate influence in the boardroom” for their initial £300k input, inadequate club valuation at less than £4million, unfair demands place on members to be contributing a similar amount to the investors despite seeing a stake drop, and the buyback option would see the Well Society spending more than £1million by 2026 to return to the status quo.

The Well Society are planning to hold town hall meetings at Fir Park to present their business case for the football club. One of the Well Society board members who voted to reject, Phillip Speedie, holds fan ownership as a key reason behind his verdict.

He told the Motherwell Times: “When I joined the Well Society board a year ago, I said that fan ownership is the best ownership model for our club and I want to be here to grow the Well Society. If the deal as it is currently proposed goes through, the Well Society will end up at the sixth year of investment with 46% of the shareholding down from the current 71. The Wild Sheep Sport team would pick up 49% of the shareholding. The deal on the table to my mind doesn’t keep fan ownership alive.

“If we are no longer going to be fan owned within six years and we are going to be a minority shareholder, what is the incentive for Well Society members to continue paying memberships? We would see a drastic reduction in the shareholding and the view from us is as a result of that, we see a drastic reduction in the amount of members being active with the Well Society, and as a result, subscriptions drop off.”

For another, Derek Watson, the boardroom influence is a factor, although he has plenty of time for how Barmack has conducted himself. He explained: “In our chats with Erik, he is a very open book and I am a big fan of him personally. I think his heart is in the right place and he has done well in the sector he has worked in.

“I was disappointed with the bid that was on the table. I’m not against outside investment, I think it is something the club and the society have to look at going forward. The Society board and myself personally are open to commercial sponsorships, we have had encouraging conversations with other external parties since the beginning of this year. I think for the stake Erik is wanting, the offer falls short. One of the things I feel is a bit off is boardroom influence.

“For an initial stake of £300k, you are getting 50% of the boardroom. I think that sends off the wrong message, and I do understand Erik’s motives for it. I think if you want 50% of the boardroom you should probably put up 50% from the outset.”

Society board members met the potential investor after Motherwell’s 1-1 draw with Hibs in April. Feedback has been provided back and forth, with this proposal coming after outgoing club chairman Jim McMahon launched a campaign targeted for the American market in January. The rationale was that the club needed investment to challenge the likes of Aberdeen, Hearts and Hibs.

A consultation period has started ahead of the two-week ballot opening on July 1st. In Speedie’s mind, amid international football, holiday seasons and the general election, it’s a process that would have benefitted from more time. He explained: “We met Erik the Sunday after the Hibs game at Fir Park in April. That was the first time we got a good understanding of what he is trying to do. We gave a significant amount of feedback on that day around a number of items.

“I think about three weeks ago we seen the heads of terms. Again, lots of feedback and lots of things that concerned us. I do think the rush has been to move into releasing the heads of terms, the start of the consultation period and into the vote. We are going to be going into a consultation and voting period where a number people are going to be in Germany, if they’re not, they are enjoying the Euros. You have a general election in the same week as it. You have the school holidays hitting it.

“This is a massive decision, and I do just wish there was more time to think it through and get everyone as comfortable as possible with the heads of terms. I understand there is a desire from the club to get clarity over what is happening. That would be beneficial particularly for players, manager and supporters. I see it from both perspectives but in an ideal world I would have liked more time.”

Motherwell have enjoyed two record profits during the time of fan ownership but it has made losses in recent seasons, with the wage bill rising by 60% over five years. For this deal to be accepted, 75% of shareholders have to vote in favour. The Well Society owns 71% of these shares and if more than 50% of members are in favour, that comes down to to a 71% acceptance. If more than 50% are cast against, the proposal cannot take place

Speedie says a business plan will be displayed to fans, for what a future with the Well Society at the forefront looks like. He said: “I think we are already well progressed in developing a business plan for the football club, to try and grow the revenue of the football club. We would want to do that in the event of a no vote with chief executive Brian Caldwell and his great team within the club.

“We in the Well Society need to make sure we are growing our membership, our contributions and growing the engagement of Well Society members. We would want to release details of that plan before July 1st.”

For Watson, a no vote doesn’t mean saying no to any future investment. But this particular deal is not one he or the Well Society can endorse. He added: “I don’t think it is a case of Erik or nothing. I think it’s important members make a well-informed decision.

“Look at the successes fan ownership has had since 2011, it’s been extremely profitable throughout the time and much bigger clubs have been relegated, and that’s clubs with much bigger investment opportunities. We have managed to punch well above our weight.

“I suppose we have always been open to investment opportunities but it has to align to our values. The Society and the club are open to commercial sponsorships and partnerships, this isn’t the first one to come to the table and it won’t be the last.

“I think it’s important we get something that is a fair valuation for the football club and we don’t want to diminish the Society or fan ownership’s influence for something that we don’t think is a suitable proposal. The proposal should contribute to the club’s long-term health and I think this one is a bit short.”