More information can be found at http://togetherleeds.boards.net/
TogetherLeeds can be contacted by email at [email protected]
Disclaimer: The document has been produced by the TogetherLeeds group, an informal group of Leeds' fans.
Its purpose is to highlight a plan to form a partnership of Leeds' fans through a LLP.
The points noted here are intended as a framework for the first executive to build into its Members' Agreement and are correct as at 24th January 2015 but may change without warning.
Always refer to the actual Members' Agreement active at the time before joining any partnership. Copyright 2015
=========================================================================================
Table of
Contents
What is TogetherLeeds and what are you trying to do?
How will
TogetherLeeds remove barriers?.
Pictogram
showing the Partnership
What’s
the Purpose of LeedsFans LLP?
Why is it
called LeedsFans LLP?
Tell me
more about LLP, what is it exactly?
How will
LeedsFans LLP be created?
Will
there be shares in the Partnership?
How much
will a stake in LeedsFans LLP cost?
Who will
pay the cost of setting up the Partnership (LLP), LeedsFans LLP?
Will
there be any special entries in the Members’ Agreement?
How will
LeedsFans LLP be structured?
What
happens to TogetherLeeds when the LLP is formed?
What will
the Exec of LeedsFans LLP do?
How will
LeedsFans LLP be regulated?
Will I
get a share certificate from Leeds United?
Can I get
my money back later on?
Will I
make a profit from my stake?
How will
LeedsFans LLP pay its annual operating expenses?
Who will
be the faces at LeedsFans LLP? Will they be the TogetherLeeds group?
Who will
be the directors elected to the Leeds United board?
How will
LeedsFans LLP fund Leeds United?
How will
LeedsFans LLP help with existing debt at Leeds United?
How will
LeedsFans LLP raise money in the future if Leeds United needs it?
What
happens when fans get bored, or broke, and stop giving money?
Will
LeedsFans LLP buy back Elland Road?
Where does
the existing supporters’ trust (LUST) come in to LeedsFans LLP?
Who can
become a member of LeedsFans LLP?
How do
you expect fans to agree on anything?
What will
you do if an elected director goes “rogue” and doesn’t follow their manifesto?
Can you
guarantee we will raise £10m?
Go to top
What will
happen to my money if LeedsFans LLP doesn’t manage to buy shares in Leeds
United?
Can I
leave my membership to someone in my will?
What
happens to money in the Partnership if it is wound-up?
How will
LeedsFans LLP purchase shares in Leeds United?
How will
you buy shares in Leeds United when they are not for sale?
How much
is Leeds United worth?
Will
LeedsFans LLP choose the manager or players?
Will the
Exec of LeedsFans LLP be paid a salary?
Will
there be other staff employed by LeedsFans LLP?
Will the
directors of Leeds United be paid a salary?
Will
LeedsFans LLP be a campaign vehicle?
Why
doesn’t Leeds United just sell shares to fans?
Why don’t
fans just buy shares in Leeds United directly?
How does
a Limited Liability Partnership compare to other companies?
Much work
has been done by other bodies into fans ownership; why do something different?
Why
reject the Supporters Direct model of an Industrial and Provident Society?
Why set
up a Partnership (LLP) and not a Community Benefit Society (CBS)?
Why set
up a Partnership (LLP) and not a Community Interest Company (CIC)?
Why not
do it like they do in Germany or Spain at Barcelona?
Ownership
Model - The Ownership situation now.
Ownership
Model - A sample Supporters' Trust Operated Fan Share Scheme.
Ownership
Model - proposed TogetherLeeds solution #1.
Ownership
Model - proposed TogetherLeeds solution #2.
Ownership
Model - Rejected Model #1.
Ownership
Model - Rejected Model #2.
Ownership
Model - Rejected Model #3.
Ownership
Model - Rejected Model #4.
Ownership
Model - Rejected Model #5.
More information can be found at http://togetherleeds.boards.net/
TogetherLeeds can be contacted by email at [email protected]
Disclaimer: The document has been produced by the TogetherLeeds group, an informal group of Leeds' fans.
Its purpose is to highlight a plan to form a partnership of Leeds' fans through a LLP.
The points noted here are intended as a framework for the first executive to build into its Members' Agreement and are correct as at 24th January 2015 but may change without warning.
Always refer to the actual Members' Agreement active at the time before joining any partnership. Copyright 2015
=========================================================================================
What is TogetherLeeds and what are you trying to do?
TogetherLeeds is an informal group of concerned Leeds fans who believe the club’s future has been jeopardised by reckless management and financial investments. Research for Supporters Direct[1] (an organisation of supporters’ trusts) has shown that “supporter ownership of football clubs can:
Help to improve governance in football, by creating more democratic, transparent and accountable structures.
Help to make clubs more financially sustainable by living within their means.“
Together Leeds agree with Supporters Direct that fan ownership can help prevent the club being jeopardised again in the future. Furthermore, TogetherLeeds agrees with Supporters Direct about certain barriers existing to prevent fan ownership; in the case of Leeds United the key barriers are owners unwilling to participate in a fan share scheme and the large amount of money needed to buy into a club the size of Leeds United.
How will TogetherLeeds remove barriers?
TogetherLeeds will provide a method for all fans and supporters’ groups (such as LUST, LUSC, SSI, SS5, SLI, Hampshire Whites, etc) to collectively purchase blocks of shares in Leeds United.
Together Leeds will create a Partnership of all interested groups and fans with limited liability, temporarily called LeedsFans LLP. (LLP = Limited Liability Partnership).
Individual fans and supporters’ groups will be asked to purchase a stake in the Partnership, LeedsFans LLP, and become members of the Partnership.
LeedsFans LLP will seek widespread take-up by offering membership to supporters’ groups and to fans wishing to inject smaller stakes; wealthier fans will be able to inject larger stakes. The voting rights each member will have depends on the size of the stake taken, however the Members’ Agreement for LeedsFans LLP limits the stake individual members can use in a vote, to prevent any one individual gaining overall control and enhances community ownership. LeedsFans LLP will use the funds raised to purchase shares in Leeds United Football Club (via any Holding company in place at the time) and elect directors to the club’s board. LeedsFans LLP will hold the shares in Leeds United for its members.
Pictogram showing the Partnership
Key barriers:
· The Partnership must raise a large amount of money.
· Some FCA regulation may be required
Key Advantages:
· Allows all fans and fans’ groups to come Together as a Partnership
· Raising of finance is spread over many key groups
· No one person can control more than 1%
· The cost of creating a Limited Liability Partnership is modest
· Allows funds to be returned to a member when the Partnership is dissolved or member leaves
· Allows new members to replace existing members for hundreds of years
· Keeps wealthy investors out of the Partnership but raises enough capital to be equal in any consortium
· Raises finance much quicker than from just any one existing fans’ organisation
Go to topWhat is LeedsFans LLP?
LeedsFans LLP is a limited liability partnership to be launched by the TogetherLeeds group to bring together all fans and fans groups with the aim of raising a fund of £10m. LeedsFans LLP’s objective is to then purchase shares in Leeds United and install its own directors on the board. In addition, LeedsFans LLP may later work with the wider community to develop and build upon the community aspect of Leeds United, its ground and stadium.
What’s the Purpose of LeedsFans LLP?
LeedsFans LLP is being created to enable fans to collectively own part of Leeds United and elect directors to the board. This is the prime focus of the Partnership. Subsequently the Partnership will be able to engage with the wider community and participate in local projects that will benefit the club, such as land development around the stadium.
Why is it called LeedsFans LLP?
The LLP at the end is a legal requirement to show we are a fully legal corporate entity incorporated as a Limited Liability Partnership. The name LeedsFans is a temporary name just used as something easy to refer to during its formation. The registered name going forward will be chosen later.
Tell me more about LLP, what is it exactly?
The limited liability
partnership (LLP) is a comparatively new type of business structure which became
available in 2001. It is a hybrid between a private company limited by shares
and a partnership. An LLP is a separate legal entity conferring full limited
liability on its members. It is created by registration at Companies House.
There is no limit to the number of partners (members). An LLP is subject to the
same rules as a private limited company for the registration of accounts at
Companies House, and the auditing of its accounts.
How will LeedsFans LLP be created?
The creation of LeedsFans LLP will be a three-fold operation.
After meeting 2 (M2) an Exec will be formed and it will create the Partnership
The Exec will make the Partnership suitable for accepting mass membership and instigate a membership drive.
Once we have enough members and have raised enough money then a further vote between all members will elect a new Exec to move the Partnership forward. Members of the Exec will retire on a one, two or three year cycle..
Will there be shares in the Partnership?
Strictly speaking, any money the members put into the partnership’s funds is called a stake. The Members’ Agreement[2] will define a “share” as each full £100 stake a member has put into the fund, so that a member putting in £500 will have five shares, etc. These shares are not the same as shares in a private or public limited company. When this document talks of shares the meaning is taken to be this £100 stake definition.
How much will a stake in LeedsFans LLP cost?
A small group of up to 10 fans can pay £10 each (£100 total) to get a joint single stake.
An individual can buy stakes in multiples of £100.
Larger groups, such as LUST, LUSC etc. can pool resources and buy a large stake in multiples of £100.
Who will pay the cost of setting up the Partnership (LLP), LeedsFans LLP?
The costs of setting up a limited liability partnership are quite small and other costs such as data protection registration, insurance, etc. are also reasonably small. The stakes from the first few members will be used to cover these costs.
Will there be any special entries in the Members’ Agreement?
A limited company has a set of rules called the Articles of Association. In an LLP the equivalent is the Members’ Agreement. The first Members’ Agreement will be designed to get things moving and the Exec will work over the next few weeks and months to change this agreement in readiness for mass membership. One of the major rules will be to limit the number of shares any one member can have counted in any vote by poll to 1,000, ie 1% of our £10m target.
How will LeedsFans LLP be structured?
Every member of LeedsFans LLP is eligible to stand for election to become a “designated member”. Designated members have special responsibility defined in law to run the firm in a legal and financially viable way. They also get responsibilities such as being able to operate the bank account, etc. They can receive penalties if they are found to have not carried out these duties correctly. We will call our designated members “The Exec”. Members of the Exec will be required to retire by rotation. The periods of office are yet to be decided but are anticipated to be one, two or three year cycles.
What happens to TogetherLeeds when the LLP is formed?
Once the Partnership is operating efficiently, TogetherLeeds has no further purpose and will disband.
What will the Exec of LeedsFans LLP do?
They will be responsible for ensuring LeedsFans LLP meets all its legal obligations and organising from time to time any new funding as needed by the LLP, Leeds United FC or wider community. They will be responsible for organising a vote amongst all of the LLP’s members to elect representatives onto the Leeds United board.
How will LeedsFans LLP be regulated?
LeedsFans LLP will be a normal limited liability partnership and it and its directors will be fully regulated by English Law as defined in the Companies Act 2006, Limited Liability Partnerships Regulations 2001 and any other legislation applying to LLPs.
How will my vote count?
Members of LeedsFans LLP will get to vote to elect the Exec for LeedsFans LLP. Once LeedsFans LLP has purchased shares in Leeds United the full membership vote to elect directors to the board of Leeds United. The directors elected to Leeds United need not be from the Exec but must be members of the LLP.
Voting
All voting procedures will be defined in detail in the Members' Agreement which will be published before mass membership takes place. Each complete £100 of a member’s stake is considered a share. Each member can use up to 1,000 shares to cast a vote. Most of the resolutions to be voted will need a simple majority from the counting of shares held by members voting. Certain Special Resolutions, such as to wind-up the Partnership, are likely to need a 75% majority. It is worth noting that for any joint memberships only the first-named person on the membership register is entitled to vote.
Will I get a share certificate from Leeds United?
No, but Members’ Certificates will be issued by LeedsFans LLP to its members for stakes placed with LeedsFans LLP. The shares in Leeds United that LeedsFans LLP buys later are the property of LeedsFans LLP and are held collectively for the benefit of all its members.
How safe is my money?
All revenue from the funds put into the Partnership will be held in the Partnership’s bank or invested until needed to pay for shares in Leeds United or to pay legitimate expenses. The Partnership is legally bound to produce and file accounts with Companies House and accounts will be available to all members. Expenses in the initial stages will be minimal, but if we get to Due Diligence phase there will be larger costs incurred.
The value of your stake reflects the value of LeedsFans LLP which will change from time to time. Until we buy shares in Leeds United the value of LeedsFans LLP will reflect the value of the cash we acquired, namely up to £10m. However, once we invest that money in Leeds United shares the value of LeedsFans LLP will vary as the value of Leeds United varies. I would expect that if we were relegated the value would fall; if we are promoted the value will rise.
Can I get my money back later on?
Yes, but with conditions. LeedsFans LLP is a partnership and members can leave, they can be expelled or, bluntly speaking, they simply could die. Subject to the detailed rules of the Members’ Agreement a new member can join and replace your stake which will be returned to you or, if the Partnership’s reserves allow, the membership can vote to return your stake. The last way to get your money back will be if the LLP is wound up. In this case the shares in Leeds United will be sold and the proceeds will be divided between the members. Thus if Leeds United are successful and in the Premier League you may get back many times your original stake; however if Leeds United has been relegated you may not get back all of your original stake. You cannot sell your stake as you would be able with shares in a PLC.
Will I make a profit from my stake?
Possibly, but it is certainly not guaranteed. If the value of Leeds United rises then that should be reflected in the value of LeedsFans LLP and you should receive a payment larger than your original stake if the LLP is wound up. Similarly, if Leeds United are relegated you are likely to receive a lower amount for your stake.
How will LeedsFans LLP pay its annual operating expenses?
The eventual running costs of the LLP will not be excessive since it is basically dormant for most of the year and its main tasks will be maintaining the register of members, arranging to elect its Exec (who must work pro bono) and arranging to elect directors to the Leeds United board. There will be a need for insurance and similar items but these costs will be borne by charging Leeds United a small management fee in lieu of salary for its directors. However, initially there will be costs that may need to be met through small donations or loans from a benefactor.
Who will be the faces at LeedsFans LLP? Will they be the TogetherLeeds group?
As explained earlier, the TogetherLeeds group will disband once LeedsFans LLP is operating.
A member of the TogetherLeeds group may choose to stand for election to LeedsFans LLP but you can choose not to vote for them.
Who will be the directors elected to the Leeds United board?
Any full member of LeedsFans LLP will be able to stand for election to the Leeds United board. You do not have to be on the LeedsFans LLP Exec to stand for election to Leeds United’s board but you do need to be a full member of LeedsFans LLP. Any member who holds joint membership will only be allowed to stand if they are the first-named on the Members’ Register.
How will LeedsFans LLP fund Leeds United?
LeedsFans LLP aims to raise a fund of £10m. Part of this will secure equity, the rest can be used to reduce debt or provide working capital. From time to time LeedsFans LLP may make loans to Leeds United, at an interest rate it deems fit (from zero to market rate), to help the club. This may be to fund players, ground improvements or land purchase etc. Just as with any other company the Exec of LeedsFans LLP has a legal duty to ensure all such deals are sound and do not unduly threaten the stability of LeedsFans LLP.
How will LeedsFans LLP help with existing debt at Leeds United?
We have set the target funds for LeedsFans LLP at £10m because we recognise that, after purchase of shares in Leeds United Football Club, a further equity investment in the club is needed to clear old debts and allow the club a fresh start. We feel our targets will allow a shareholding in Leeds United of more than 10% and still allow us to invest enough in new equity to clear the club’s debts completely.
How will LeedsFans LLP raise money in the future if Leeds United needs it?
LeedsFans LLP will be a normal limited liability partnership and as such is a legal corporate entity just like any other in England. It will be able to raise money in all the different forms that other companies can; such as, but not limited to, advertising, sponsorship, increasing membership, bond issue, loans, interest from investments, dividends paid by Leeds United and asking existing members to increase their stake.
What happens when fans get bored, or broke, and stop giving money?
TogetherLeeds view the foundation and initial funding of the Partnership, LeedsFans LLP, as “The Big Challenge”. The challenge is to quickly raise £10m. Once this figure is achieved it is intended that there will be no further fundraising, no subscriptions or annual fees or suchlike; we will have achieved our objective in that respect. The future membership may decide to raise further funds to buy a larger share of the club or fund the working capital.
How will LeedsFans LLP cope if the club needs cash for a player or ground purchase or stadium improvement?
It will be no different to any other shareholder; it can choose to participate by raising funds or spending from its reserves, or it can agree to a dilution in share percentage of Leeds United to allow others to invest. The decision will be made by the elected Exec at the time.
Will LeedsFans LLP buy back Elland Road?
Our initial objective is to secure fan ownership, the elected Exec may wish to get involved in the purchase of Elland Road but that will be a decision for the future.
Where does the existing supporters’ trust (LUST) come in to LeedsFans LLP?
All fans and fans’ groups can buy shares in LeedsFans LLP. The larger fans groups will be able to afford to buy many shares. LUST with its 10,000 membership will be able to buy a significant number of shares in LeedsFans LLP.
Who can become a member of LeedsFans LLP?
Since we are a partnership the existing members can choose to restrict certain people, such as members who are acting against the best interest of the partnership. This is a serious matter and has legal implications so will not be treated lightly. We have looked at trying to restrict membership to just fans of Leeds United but the practicalities of doing this seem insurmountable. Most likely, membership will be open to everyone but anyone breaking the rules will be expelled.
How do you expect fans to agree on anything?
We don't. We expect debate and discussions with a majority vote deciding how we act. The main influence at the club will be the two directors we hope to elect to sit on the board. These directors will be elected each season and will be voted on from a selection of willing candidates who present a manifesto. Just like with our national government, sometimes someone will be elected you don’t like but if s/he doesn’t do a good job s/he is unlikely to be elected again.
What will you do if an elected director goes “rogue” and doesn’t follow their manifesto?
The elected directors must be members of the Partnership LeedsFans LLP. If a director goes “rogue” and fails to follow the partnership’s rules or stick to their manifesto the members can vote to remove the director as a member of the partnership. The director will then no longer be eligible to take a seat on the board and the partnership will elect a replacement.
Can you guarantee we will raise £10m?
No. However, the initial role of the partnership, LeedsFans LLP, is to canvass support from fans of all means. The larger push for mass membership will not go ahead until we have a level of commitment that leads us to believe a very large sum can be raised. It may transpire that the initial offering raises less than our target but that still allows us to start serious negotiations.
Go to top
What will happen to my money if LeedsFans LLP doesn’t manage to buy shares in Leeds United?
All stakes given by members will be held in bank accounts or investments until we have concluded a deal to buy Leeds United shares. Should we be unsuccessful after a period of trying, the membership of the LLP can vote to wind-up the partnership and all available funds (original stakes, interest received, dividends received, donations received, monies left to us in wills, grants, etc. less any operating costs such as insurance, data protection, brochures, etc.) will be distributed back to the members.
What happens if I die?
A member who dies is deemed to have left the partnership. When a member leaves, through death or otherwise, his stake is locked in the Partnership. However the Exec can vote to return the stake from its reserves or can use a new stake from a new member to return the stake of an ex-member. The money will be returned to the estate of the deceased. The Exec can only do this if the stability of the Partnership is not threatened. It may be many years before funds become available for the stake to be returned if new members do not join. However, it is hoped that the Partnership will continue to have new members replacing ex-members throughout the lifetime of the Partnership and so a continual flow of funding should also occur allowing stakes to be regularly returned.
Can I leave my membership to someone in my will?
When a member dies that member is deemed to have left the Partnership and their estate can apply for the original stake to be returned. This procedure is defined in the Members’ Agreement and is subject to certain rules and may take some time to complete. The estate of a deceased member will only get back their original stake. However, a member can, at any time prior to death, nominate a person or trustee to replace them as a member and take over the membership rights on death, thus preserving any benefits that may occur later.
What happens to money in the Partnership if it is wound-up?
Should the partnership be wound-up then all investments get converted into cash (ie any remaining shares in Leeds United will be sold, any reserve funds that were invested will be converted to cash, etc.) and this cash will be distributed to the members and the Partnership will close.
If the proceeds don't cover returning the stakes in full then each stake is reduced by the same percentage.
How will LeedsFans LLP purchase shares in Leeds United?
We will target the 25% of shares not held by Eleonora Sport through normal commercial channels.
How will you buy shares in Leeds United when they are not for sale?
We believe this will happen in one of four ways:
A current small shareholder may wish to sell directly to us.
GFH may decide to sell to us.
The Football League may force a sale of the shares held by Eleonora Sport.
Leeds United Football Club may enter administration.
The creation of our proposed organisation now will allow us to move quickly.
How much is Leeds United worth?
That can only be answered after a full due diligence is performed.
Will LeedsFans LLP choose the manager or players?
No.
Will my ticket be cheaper?
LeedsFans LLP does not have control of such things, however its members may vote to elect directors onto the Leeds United board who will push for cheaper tickets.
Will the Exec of LeedsFans LLP be paid a salary?
No. The Exec will be expected to work pro bono but they will be able to claim reasonable expenses.
Will there be other staff employed by LeedsFans LLP?
It is possible that the administration of the members’ register and compiling accounts etc. will require ancillary staff in the future. However, in the first instance we expect enough volunteers to be able to do this for free.
Will the directors of Leeds United be paid a salary?
No, they can claim reimbursement of normal expenses but the post is not expected to carry a salary. LeedsFans LLP will charge Leeds United a small management fee to cover the partnership’s running costs instead..
Will LeedsFans LLP be a campaign vehicle?
Not in itself, but the members of LeedsFans LLP will elect Board Members to Leeds United based upon their manifestos. The votes of the members will decide the extent to which those Board Members lead campaigns.
Why doesn’t Leeds United just sell shares to fans?
Basically, it is legally prevented from doing so. The Companies Act 2006 prevents a private limited company (which is what the club and its holding company are) from making a general share offering available to the public. Leeds City Holdings Ltd. (the UK based company that actually owns the football club proper) or the football club proper (Leeds United Football Club Limited) could transform from a private company into a PLC (like Arsenal, Man U. etc) but that is costly and there is no sign the existing owners are planning to do that.
Why don’t fans just buy shares in Leeds United directly?
They can’t buy from the club but, in theory, they can buy from the owners. Leeds City Holdings Ltd is a private company and, by law, it cannot make share offers to the public. However, any fan or fans’ group can individually approach the existing owners and make an offer to buy. It needs a current owner to be ready to sell though and the costs of buying and registering just a few shares can be prohibitive. The Leeds United Supporters’ Trust (LUST) tried that approach with an owner recently and was told there was no deal to be done.
How does a Limited Liability Partnership compare to other companies?
|
|
Community shares in community
benefit societies |
Company shares |
Partnership stake |
|
Unlimited investment limit? |
✖ |
✔ |
✔ |
|
Does voting motivate large
investors |
✖ |
✔ |
✔ |
|
Aimed at benevolence or
investment? |
Benevolence |
Investment |
Investment |
|
Can investment be returned? |
✔
but with difficulty |
✖ |
✔ |
|
Can investment go UP in value? |
✖ |
✔ |
✔ |
|
Can investment go DOWN in
value? |
✔ |
✔ |
✔ |
|
Can profits be easily
distributed? |
✖ |
✔ |
✔ |
|
Will surplus money be divided
out if company is wound up? |
✖ |
✔ |
✔ |
|
Will I lose my money if
Partnership or LUFC goes bust? |
✔ |
✔ |
✔ |
Much work has been done by other bodies into fans ownership; why do something different?
We have researched information published by various bodies, such as Supporters Direct[3], The Co-operative Society[4], The Community Shares Unit[5], yet find that the suggested models for fan share ownership, whilst satisfactory in some circumstances, are not suitable for a club the size of Leeds United. The sheer size of the investment needed to buy enough shares to have any influence within this club is beyond the means of current supporters’ groups. Further, as Supporters Direct points out in section 4.4[6], there is a key barrier to most schemes and it is very relevant to Leeds United:
The scope for developing more Fan Share type schemes is dependent on football clubs and their owners making shares available for purchase. There appears to be little appetite currently among club owners to do this.
Leeds United Supporters Trust (LUST) has already tried to engage with the current owners and been rebuffed. The formation of LeedsFans LLP will help to break this barrier and allow LUST to further its goals.
Why reject the Supporters Direct model of an Industrial and Provident Society?
In effect, we are not. There is such a society at Leeds United trading as LUST and this organisation and model is fully included in our plans. However LUST has faced two big barriers in getting a fan share scheme off the ground, namely the existing owners and the vast amount of money to be raised to get a significant voice. TogetherLeeds intends LeedsFans LLP to be the way of breaking that logjam and allowing the supporters’ trust and all other fans’ groups and individuals to invest and become part-owners of Leeds United with the collective clout to affect the way the club is run.
Since an initial stake in LeedsFans LLP can be added to over time, individual fans or groups such as LUST can purchase more as their finances allow.
Why set up a Partnership[7] (LLP) and not a Community Benefit Society (CBS)?
A CBS is very limited in the amount of money it can raise due to a share cap. This is recognised by Supporters Direct (SD) and they have lobbied for the limit to be raised. Recently, the cap has been raised recently but still remains as a cap and a barrier to investment. TogetherLeeds supports the model developed by SD and recognises this model will provide a good vehicle for other clubs with lower funding needs. Leeds United needs such a large investment a CBS, even with a raised limit, will not suffice. SD recognises that their CSB model is not directly relevant to Leeds United at the moment.
Why set up a Partnership[8] (LLP) and not a Community Interest Company (CIC)?
LeedsFans LLP is intended to be heavily focused on Leeds United although later work may involve the wider community. A CIC has, by law, many constraints on how it acts with dividends and profits that limit investment more to generous benefactors. Leeds United is a financially large business and LeedsFans LLP needs to be able to attract and work with investors both large and small. A LLP structure allows us to do this and provides much more flexibility for future actions.
Why set up a Partnership[8] (LLP) and not a Private Limited Company (Ltd) or a Public Limited Company (PLC))?
LeedsFans LLP is intended to be heavily focused on Leeds United although later work may involve the wider community. A CIC has, by law, many constraints on how it acts with dividends and profits that limit investment more to generous benefactors. Leeds United is a financially large business and LeedsFans LLP needs to be able to attract and work with investors both large and small. A LLP structure allows us to do this and provides much more flexibility for future actions.
Why not do it like they do in Germany or Spain at Barcelona?
There are clubs abroad that are often referred to as operating the 50%+1 principle. This is possible because the football club itself has been set up as a co-operative or mutual organisation. As we know, Leeds United is neither of these and is a private limited company. It would be possible for Leeds United to be changed to a mutual club but it would require the supporters finding enough money first to purchase the club in its entirety from the current owners, clear all the debt and also have the money to run it. However, the biggest barrier to this method is that both the FA and the Football League's rules forbade any club converting in this way until the Law changed in 2014. As yet, no club has tried to do this. Another way for Leeds United to become a 50%+1 club is for it to happen, as it did with Portsmouth, by the supporters’ trust buying more than half of Leeds United.
A cheaper way would be to buy half the club from the Administrator should Leeds United ever end up in that position again. If this should happen the trust would need to very quickly have available several million pounds to buy and run the club. The TogetherLeeds group believes that no one supporters’ group currently has these large funds available and intends LeedsFans LLP to be a legally registered partnership that pools the funds from supporters’ groups and individual fans to facilitate fans buying shares in the club (our initial target is to buy at least 10% of the club as soon as possible. Further investment may allow a greater ownership later).
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Ownership Model - The Ownership situation now.
This simple diagram shows the ownership structure at Leeds United now. The percentages relate to share holdings further down the line.
Chart 1
Key barriers to Fans' Ownership:
No fans' ownership exists
The parties mentioned in the diagram are: LUST - Leeds United Supporters' Trust; FANS - individual fans and small groups of friends able to invest up to £100,000; Support Clubs - any of the various clubs that exist around the world to support Leeds United; Wealthy Investors - people or entities able to invest very large amounts of money; Envest - Envest Ltd, a company controlled by ex-Leeds chairman Salah Nooruddin; GFHc - GFH Capital; IIB - Bahrain’s International Investment Bank; Eleonora - Eleonora Sport Ltd, a company owned by Mr Cellino and a related trust; LUFC Holdings - a Cayman Islands registered company; The Club - comprising Leeds City Holdings Ltd which wholly owns Leeds United Football Club.
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Ownership Model - A sample Supporters' Trust Operated Fan Share Scheme.
This simple diagram shows one type of fan share scheme and how it would relate to our supporters' trust. Some percentages are for illustration only
Chart 4
Key barriers to Fans' Ownership:
· Reduces Eleonora shares in LUFC Holdings below the critical 75% for full control
· Eleonora have refused to take part
· LUST do not yet have the cash needed to buy into the scheme
· Percentage of shares owned falls short of that needed to be able to influence LUFC Holdings
· LUST cannot share profits out if Fan Scheme sells shares later.
Key Advantages:
· It is the start of a long road to influence within LUFC Holdings
· LUST holds shares on behalf of its members.
The parties mentioned in the diagram are: LUST - Leeds United Supporters' Trust; FANS - individual fans and small groups of friends able to invest up to £100,000; Support Clubs - any of the various clubs that exist around the world to support Leeds United; Wealthy Investors - people or entities able to invest very large amounts of money; Envest - Envest Ltd, a company controlled by ex-Leeds chairman Salah Nooruddin; GFHc - GFH Capital; IIB - Bahrain’s International Investment Bank; Eleonora - Eleonora Sport Ltd, a company owned by Mr Cellino and a related trust; LUFC Holdings - a Cayman Islands registered company; The Club - comprising Leeds City Holdings Ltd which wholly owns Leeds United Football Club.
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Ownership Model - proposed TogetherLeeds solution #1.
This diagram shows one of the ways TogetherLeeds proposes for fans to own part of Leeds United.
Chart 2
Key barriers to Fans' Ownership:
· LeedsFans Partnership must raise £10m
· Envest has not yet agreed to sell
Key Advantages:
· 7.02% of shares enables LeedsFans Partnership to have some influence in LUFC Holdings
· Fan elected directors on the LUFC Holdings board allows for good governance
The parties mentioned in the diagram are: LUST - Leeds United Supporters' Trust; FANS - individual fans and small groups of friends able to invest up to £100,000; Support Clubs - any of the various clubs that exist around the world to support Leeds United; Wealthy Investors - people or entities able to invest very large amounts of money; Envest - Envest Ltd, a company controlled by ex-Leeds chairman Salah Nooruddin; GFHc - GFH Capital; IIB - Bahrain’s International Investment Bank; Eleonora - Eleonora Sport Ltd, a company owned by Mr Cellino and a related trust; LUFC Holdings - a Cayman Islands registered company; The Club - comprising Leeds City Holdings Ltd which wholly owns Leeds United Football Club.
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Ownership Model - proposed TogetherLeeds solution #2.
This diagram shows one of the ways TogetherLeeds proposes for fans to own part of Leeds United. Some percentages are for illustration only
Chart 3
Key barriers to Fans' Ownership:
· LeedsFans Partnership must raise £10m
· The GFH controlled companies have not yet agreed to sell
· The new consortium has not been created yet
Key Advantages:
· 12.5%, say, of shares enables LeedsFans Partnership to influence LUFC Holdings
· 12.5%, say, of shares enables Wealthy Investors to safeguard their money
· Fan elected directors on the LUFC Holdings board allows for good governance
· Investor elected directors on the LUFC Holdings board allows for good governance
The parties mentioned in the diagram are: LUST - Leeds United Supporters' Trust; FANS - individual fans and small groups of friends able to invest up to £100,000; Support Clubs - any of the various clubs that exist around the world to support Leeds United; Wealthy Investors - people or entities able to invest very large amounts of money; Envest - Envest Ltd, a company controlled by ex-Leeds chairman Salah Nooruddin; GFHc - GFH Capital; IIB - Bahrain’s International Investment Bank; Eleonora - Eleonora Sport Ltd, a company owned by Mr Cellino and a related trust; LUFC Holdings - a Cayman Islands registered company; The Club - comprising Leeds City Holdings Ltd which wholly owns Leeds United Football Club.
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Ownership Model - Rejected Model #1.
This diagram shows another model we have considered, but rejected, for fan ownership. It involves buying a few shares from Eleonora Sport. Some percentages are for illustration only
Chart 5
Rejected due to:
· Illegal under Companies Act 2006.
· Reduces Eleonora shares in LUFC Holdings below the critical 75% for full control
· Eleonora have refused to take part
· Percentage of shares owned falls short of that needed to be able to influence LUFC Holdings
The parties mentioned in the diagram are: LUST - Leeds United
Supporters' Trust; FANS - individual fans and small groups of friends able to
invest up to £100,000; Support Clubs - any of the various clubs that exist
around the world to support Leeds United; Wealthy Investors - people or
entities able to invest very large amounts of money; Envest
- Envest Ltd, a company controlled by ex-Leeds
chairman Salah Nooruddin; GFHc - GFH Capital; IIB - Bahrain’s International
Investment Bank; Eleonora - Eleonora Sport Ltd, a company owned by Mr Cellino
and a related trust; LUFC Holdings - a Cayman Islands registered company; The
Club - comprising Leeds City Holdings Ltd which wholly owns Leeds United Football
Club.
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Ownership Model - Rejected Model #2.
This diagram shows another model we have considered, but rejected, for fan ownership. It involves buying a few shares from Eleonora Sport. Some percentages are for illustration only
Chart 6
Rejected due to:
· Start up costs around £250,000.
· High annual running costs.
· Full regulation by Financial Conduct Authority (FCA) needed - very costly.
· Reduces Eleonora shares in LUFC Holdings below the critical 75% for full control
· Eleonora have refused to take part
· Percentage of shares owned falls short of that needed to be able to influence LUFC Holdings
The parties mentioned in the
diagram are: LUST - Leeds United Supporters' Trust; FANS - individual fans and
small groups of friends able to invest up to £100,000; Support Clubs - any of
the various clubs that exist around the world to support Leeds United; Wealthy
Investors - people or entities able to invest very large amounts of money; Envest - Envest Ltd, a company controlled by ex-Leeds chairman Salah
Nooruddin; GFHc - GFH
Capital; IIB - Bahrain’s International Investment Bank; Eleonora - Eleonora
Sport Ltd, a company owned by Mr Cellino and a related trust; LUFC Holdings - a
Cayman Islands registered company; The Club - comprising Leeds City Holdings
Ltd which wholly owns Leeds United Football Club.
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Ownership Model - Rejected Model #3.
This diagram shows a proposal for the LeedsFans company to be a private company limited by shares. It was rejected after consideration.
Chart 7
Rejected due to:
· Illegal under Companies Act 2006
The parties mentioned in the diagram are: LUST - Leeds United Supporters' Trust; FANS - individual fans and small groups of friends able to invest up to £100,000; Support Clubs - any of the various clubs that exist around the world to support Leeds United; Wealthy Investors - people or entities able to invest very large amounts of money; Envest - Envest Ltd, a company controlled by ex-Leeds chairman Salah Nooruddin; GFHc - GFH Capital; IIB - Bahrain’s International Investment Bank; Eleonora - Eleonora Sport Ltd, a company owned by Mr Cellino and a related trust; LUFC Holdings - a Cayman Islands registered company; The Club - comprising Leeds City Holdings Ltd which wholly owns Leeds United Football Club.
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Ownership Model - Rejected Model #4.
This diagram shows a proposal for the LeedsFans company to be a public company limited by shares. It was rejected after consideration.
Chart 8
Rejected due to:
· Start up costs around £250,000.
· High annual running costs.
· Full regulation by Financial Conduct Authority (FCA) needed - very costly .
The parties mentioned in the diagram are: LUST - Leeds United Supporters' Trust; FANS - individual fans and small groups of friends able to invest up to £100,000; Support Clubs - any of the various clubs that exist around the world to support Leeds United; Wealthy Investors - people or entities able to invest very large amounts of money; Envest - Envest Ltd, a company controlled by ex-Leeds chairman Salah Nooruddin; GFHc - GFH Capital; IIB - Bahrain’s International Investment Bank; Eleonora - Eleonora Sport Ltd, a company owned by Mr Cellino and a related trust; LUFC Holdings - a Cayman Islands registered company; The Club - comprising Leeds City Holdings Ltd which wholly owns Leeds United Football Club.
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Ownership Model - Rejected Model #5.
This diagram shows a proposal for the LeedsFans company to be a Society under the new Co-operative and Community Benefits Society Act 2014. It was rejected after consideration.
Chart 9
Rejected due to:
· Limits investment per member.
· Limits votes per member.
· Significant annual running costs.
· Mutual Financial Conduct Authority (FCA) registration required.
· Full regulation by Financial Conduct Authority (FCA) possibly needed - very costly.
The parties mentioned in the diagram are: LUST - Leeds United Supporters' Trust; FANS - individual fans and small groups of friends able to invest up to £100,000; Support Clubs - any of the various clubs that exist around the world to support Leeds United; Wealthy Investors - people or entities able to invest very large amounts of money; Envest - Envest Ltd, a company controlled by ex-Leeds chairman Salah Nooruddin; GFHc - GFH Capital; IIB - Bahrain’s International Investment Bank; Eleonora - Eleonora Sport Ltd, a company owned by Mr Cellino and a related trust; LUFC Holdings - a Cayman Islands registered company; The Club - comprising Leeds City Holdings Ltd which wholly owns Leeds United Football Club.
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