It has been a tumultuous couple of weeks for the Swansea City Supporters’ Trust since the announcement prior to it’s AGM that an agreement had been reached with the Club’s former owners.
Many fans were angered by the decision and felt badly let down by the Trust, who had been pivotal to the Swans survival during the Tony Petty era, and as such many now questioned the purpose of the organisation moving forward.
In a statement released on the Swans Trust website and reproduced below, Chairman Dave Dalton gave an update in response to all that has happened over the last 10 days.
Earlier this month we held the 21st AGM of the Swansea City Supporters’ Trust. Within that I provided a full and detailed report to our members which included references to a variety of work that the Trust is doing on behalf of not just our members but Swans supporters as a whole.
I felt it was important to follow that up with an update to all our supporters which includes extracts from my report to members and reference to the recent settlement agreement to the shareholding dispute arising from the 2016 sale of the club.
Resolution of the dispute arising from 2016 sale of the Club
Last week was both a busy and challenging one for the Trust and its Board. We held our AGM and released a detailed statement to members to announce that the Trust has reached a resolution to the dispute arising from the 2016 sale of the club, after agreeing the adoption of an important new Shareholders’ Agreement and new Articles of Association for the club. We followed up by inviting our members to a forum where they could ask questions of a panel made up of Board members and our legal representatives.
We are in the process of replying to emails and messages arising from the forum.
There seem to be a few recurring themes surrounding our announcement that I feel are important to re-emphasise in a Q&A style here:
Q. Is it correct that the settlement agreement to the shareholding dispute means the Supporters’ Trust maintains its current shareholding of 21% in the club? What about in the future? What is the benefit of 5% now being permanently protected?
Yes. Under the settlement agreement the Trust retains its current shareholding of 21%, and 5% of these shares in the club have been converted to Class A shares and are permanently protected from dilution – this is important as it brings long-term security to the Trust’s position that will continue beyond the current majority owners. The remaining 16% of the Trust’s shares in the club are Class B shares and these are subject to dilution over time, as and when loans made to the club are converted to equity (i.e. shares). Based on the current outstanding loans to the club, the Trust understands that its 16% Class B shares would be diluted to just over 10% of the shares in the club if all the outstanding loans are converted. That would mean the Trust’s shareholding would become 5% plus 10% which totals just over 15% shareholding in the club.
Q. Why did the Trust Board decide not to go back to members for a vote before reaching an out-of-court settlement with the current majority owners and 2016 sellers?
The members’ vote in 2019 gave the Trust Board the mandate to pursue legal action and also to settle the claim if appropriate. The Trust has said on numerous occasions that it is willing to listen to offers that could lead to a settlement and so avoid the need for legal action – which was always seen as a last resort. As we described in our recent statement to Trust members, the Trust Board wanted to and would have preferred to consult with our members before taking the decision to settle the shareholding dispute.
After lengthy discussions involving the Trust Board and our legal team, it was decided that further consultation and a vote from our members was not possible on this occasion, primarily because strict confidentiality was required by our prospective funder and insurer. It would also have severely weakened our position with all counterparties had details of these discussions become public knowledge. The extent of the requirements for confidentiality was not something that was fully appreciated earlier in the process of obtaining funding and insurance offers. Without the prospect of funding and insurance, the Trust would have been very unlikely to have secured any negotiated resolution with the current majority owners and 2016 sellers.
In short, in order to explain the legal and commercial realities of the Trust’s position to members, the Trust would have had to disclose information that would have breached confidentiality with the funder/insurer and in doing so would have exposed the Trust’s position to the majority owners and 2016 sellers, which would most likely have resulted in withdrawal of the negotiated settlement.
Q. The funding/insurance position for legal action seems to have changed between the statement to members in June 2021 and the announcement of resolution of the dispute arising from the 2016 sale of the club. The recent statement to members contained the following sentence about litigation funding/insurance: “This contained some aspects within its final terms that could potentially impact on one of the Trust Board’s responsibilities – to protect the Trust from financial exposure”. What does this mean?
In June 2021, the non-binding heads of terms for funding and insurance appeared broadly adequate. As the details of the funding agreement were being discussed, it became apparent that the funder required the Trust to commit potentially all of its own resources to pursue the case to conclusion once the funder’s budget had been exhausted, however long or costly the legal action would be and including the costs of a potential appeal. As a consequence of several factors including: (i) the prospective funder requiring an increase in the After the Event (ATE) insurance premium; (ii) the barrister team materially revising upwards their final cost estimates; and (iii) the funder requiring provision to be made for a costly Deed of Indemnity to be given by the ATE insurer, the headroom in the funding budget was substantially reduced. The Trust Board was therefore concerned about the real risk that the funding budget would become exhausted and that further funds would not be readily available, as the funder had indicated that the budget offered would be the maximum extent of its lending. Consequently, the material risk to the Trust was uncapped liability that could extinguish all its own resources.
In summary, while working through the detailed terms of the funding and insurance agreements it became apparent that these agreements were significantly less attractive than they appeared in June 2021. The Trust and its legal team tried to negotiate better terms with the funder beyond their final position but this was not possible. The Trust considered seeking an alternative funder and made enquiries in this regard, however, we were advised it was unlikely that a materially improved funding offer would be available in current markets. Furthermore, the Trust was already moving beyond the recommended timeframe for initiating legal action, beyond which the Trust’s case would probably weaken.
Q. Is it right that if the Trust had eventually won the case in court in several years’ time, a significant part of the funds raised through compulsory purchase of the Trust’s shares would have been consumed in paying third parties? Can you explain the £21M number that is often talked about?
As the Trust does not have the resources to fund legal action independently, a significant amount of any monies raised through sale of the Trust’s shares following a win in court would have been consumed in paying the funder, insurer and various legal representatives.
The £21M number needs to be put in proper context – this was the approximate value of the Trust’s shares in 2016 when the club was sold – it is not the net funds the Trust could have realised by taking legal action. All legal cases carry cost and risk – without waiving privilege in all of the advice received, the QC opinion the Trust obtained for our case stated “Strong prospects of establishing liability with a 60% chance of success”. In the best-case scenario of the Trust winning the case and the judge requiring the current majority owners and 2016 sellers to buy the Trust’s shares at 2016 valuation, after deduction of fees and premiums for the funder and insurer and various legal representatives, the Trust may have realised at most half of the £21M amount and, of course, the Trust would then have no shares in the club and little to no engagement with the club’s ownership or management. It is also possible that the Trust would have won the case with the judge assigning a current valuation of the club shares, which is significantly lower than the 2016 valuation, and in that eventuality after deducting fees and premiums for the insurer and funder and various legal representatives, the Trust would have been left with at best a small sum of money, but again with no shares and no say in how the club is being run. It is also possible that the Trust would have lost the case. All this would have played out over a number of years, not considering further time taken for any appeals of the verdict. The Trust Board firmly believes the decision that has been made to settle the dispute arising from the 2016 sale of the club is in the best interests of the Trust and its members.
Looking ahead
The shareholding dispute has taken much of the time of our Trust Board over the past 5 years, sometimes at the detriment of our ability to deliver wider projects and initiatives that advance the interests of our members and Swans fans. However, in the past 12 months we have been able to expand the thinking of the Board to enable other pieces of work to be delivered both independently as a Trust Board and alongside the club.
During the past week we have had a number of members reach out to offer their help to the Trust as we look to the future. I will be following this up in the coming days – thank you!
Before going further, I would like to comment on the current relationship with the club, and my view of how this will be going forward.
Despite the shareholding dispute the Trust Board has been really pleased and encouraged with the levels of engagement it has had with the club’s local management team, and in particular Chief Executive Julian Winter, Head of Commercial Rebecca Edwards-Symmons, Head of Operations Andrew Davies and Head of Fan Engagement Catherine Thomas. All regularly meet up with myself, Terry Sinnett and other Board members on a variety of club and Trust related issues as well as the specific working groups I reference later. We have also made great strides with establishing improved links with the Swans Foundation (formally Community Trust) and we are extremely grateful to the Head of Foundation Helen Elton for that.
These regular conversations cover such matters as season tickets, away travel, fan behaviour, inclusivity, stadium issues and catering and they now routinely form part of our new and regular Supporter Director updates to members which I hope you are finding useful.
I firmly believe the resolution of the shareholding dispute will ensure that this relationship will only strengthen and will enable the Trust to gain further access and provide important input into the running of the club. Our place in the club is now permanently protected, through our current 21% shareholding that includes a non-dilutable 5% shareholding, as well as through our right to a Supporter Director on the club’s Board of Directors.
Maintaining a fair balance
I’d also like to mention this to our members and supporters as a whole. We recognise from regular feedback, comments, emails and phone calls the frustration that at times we can potentially appear misaligned with some of the wider views within the fan base. Our dual role as shareholders in the club and as the voice of the fans is sometimes a difficult balancing act, but one that we must review and assess continuously.
We firmly believe in retaining critical oversight of club matters and actions but must also work with the local management team to advance the interests of the club and the supporters. At times, we will lean further to one end than the other, and vice-versa, but without maintaining this general balance between oversight and collaboration, it would be increasingly difficult to deliver meaningful input and positive changes for the fans.
That is why we must sometimes look beyond real-time or temporary frustrations in order to ensure that the fans’ interest in the club is retained and proactively advanced over a longer period of time. We are always open to our members for conversations or to answer questions as best we can but please remember to be courteous and refrain from any personal abuse or defamatory remarks to our Trust Board members or volunteers.
On to our priorities – these have been set out and agreed by our Board as the major priorities over the next six months: Immediate priorities (i.e., next 6-8 weeks)
Swans Trust Website
As the way in which people consume content and access information changes, the Trust must adapt. We have increased our presence on social media over the past 2 years and have been undertaking a redesign of our website to ensure it is fit for the present and future.
Our website is the hub of our information for members and fans – it is critical that we have a site that people want to visit and engage with. This project is led by Trust Board member Adam Lewis and has been focussed on developing a new user experience – information will be more accessible and intuitive, membership sign up will be easier, and Supporters’ will notice more visual and engaging content. In the background, we have also been working to update our systems and databases to enable automation and make the management of information easier. It will also allow a simpler and more automated way for members to join us online each season.
We plan to launch this in the near future and I’d like to thank Adam and our content contributors for the countless hours they have committed to this project.
Fan Led Review
In November 2021, Tracey Crouch MP released the findings of the Fan Led Review. This critical review into the football pyramid in the UK has identified a series of important recommendations to ensure the future of the beautiful game is sustainable and protected. These recommendations cover all aspects of the game, from the establishment of an independent regulator through to better checks on owners and directors, and a more effective system to manage player welfare (especially those who are exiting the game).
As part of the follow-up to this review we are intending, with the support of the club, to send out a number of surveys to all members over the weeks ahead to collate your views on the key recommendations from the FLR so we can ensure views of Swans fans are being factored into the key decisions still to be made – we will make these surveys as concise as possible but I would really appreciate it if you could all take the time to complete them when they start arriving. If anyone has yet to see a copy of the full report that was published on 24 November 2021 it can be viewed in its entirety here
Member communication
At the outset of this Board’s term, we set out to expand the level of communication that was shared with members – whilst admittedly the shareholding dispute and the associated confidentiality aspects have hampered this effort somewhat, we have still retained our focus on sharing all possible information with members and fans. Our Supporter Director updates provide information for members and fans on the conversations between ourselves and the club’s Senior Management team, including Chief Executive Julian Winter. We will continue to share these and more with members in the coming weeks and months. We also provide extracts of these updates for supporters who are not Trust members here.
We continue to retain a presence across the main Social Media channels and will continue to expand this going forward.
As part of our wider Trust Strategy work, we will also be exploring the best ways to communicate with members and fans about our work and our interactions with the club and opening this up further wherever possible.
Short-term priorities (i.e., next 3-6 months)
Trust Strategy
This spring we will be launching a consultation with members and fans on the future strategy of the Supporters’ Trust. With the legal case now resolved and the opportunities for a closer working relationship with the club, it is an important time for members to tell the Board their priorities and what they would like the Board to act on. This strategy work will ask members and fans to consider the priority working areas of the Trust with the club, and as an individual organisation.
We are currently working through plans for this exercise but know that it will encompass both virtual events and surveys, as well as opportunities to tell us your views at on match days at our POD. We are committed to sharing the outputs with our members and creating a forward-looking strategy and plan of activity to further the interests of our members and fans within the club and the community.
We hope that this strategy will provide a reference point for the current Board in the remainder of their term, along with any new members who join the Trust Board as part of this summer’s annual election process.
Summer Board Elections
This summer we will again be looking for members to stand for election to join the Trust Board. This annual activity enables any Trust member aged 18 or over to stand for election and bring their ideas and initiatives to support the organisation’s wider goals. All of our Board members are volunteers, who have a passion for the club and skills that support the Board – we are always looking for new and fresh perspectives and skillsets that can improve our organisation and the annual election cycle enables that to happen.
Further planning for this will start shortly, and we will share out an update to members closer to the start of the election window.
We recognise that there are many different views on what a Supporters’ Trust should be and what they should be focussed on – there is no better place to share your own position on this by standing for election and joining the Board for next season. As per our by-laws, there will be a number of positions open for election for both Board Members whose term has expired, as well as for members who haven’t served before.
Ongoing priorities and activities:
We also have a number of other ongoing, non-time bound priorities and activities that we are working on as an organisation and in collaboration with the club, external partners, and the wider community.
Working in Partnership with other Organisations
Having a diverse and enthusiastic Trust Board is important as it offers us something different as we look to expand our working relationships with organisations that we feel are important to us. These include:
• Football Supporters Association
• Swans Foundation
• Former Players Association
• Swans DSA
• Proud Swans
• Her Game Too
• United Against Racism
• Gambling With Lives / Big Step
• Mental Health Organisations
I’ve added direct links where I can and over the coming months we will be providing members and supporters more background into the work we do (and are wanting to develop still further) with these organisations but if there is anything immediate we can help you with just get in touch.
Over the years I’ve been involved with a variety of voluntary organisations but have always seen the merit of maximising collaboration and sharing of knowledge with others who have similar aims and objectives. Our time, and those who also donate theirs for no personal gain is often precious so to ensure it is being utilised as efficiently as we can is important. It is still very early days in forming an active involvement with these types of organisations but it is one that remains high on my list of priorities.
Working Groups & Other Initiatives
Don’t forget too that as well as working with these organisations the Trust Board routinely form part of working groups and joint initiatives alongside the club and the Swans Foundation including;
• Schools Initiative
• Supporter Groups Initiative
• Equality, Diversity and Inclusion Group
• Dementia Friendly Club
• Fan Behaviour
• Heritage Project
• Vetch Field Project
• Supporting local grass roots football, including Swansea Junior League and Swansea Schools FA
• Local Charities
As you can see, the work of the Trust is broad in both scope and volume, and is being carried out by a group of dedicated volunteers – each of us is also juggling family commitments, work and other responsibilities.
Despite this all of our current Board are fully committed to the work of the Trust but we are always open to other Trust members stepping forward to help us out if they believe they have the time. If you feel you can just drop us an email to [email protected]
Final note
I’d like to thank our members and supporters for recent messages of support. It’s been a tough couple of years for us all through the COVID-19 pandemic and we have all been affected in some capacity. I understand that we all have different interpretations of what a Supporters’ Trust should be and how it should be run and there are times when we won’t all agree on our policies and decision making. That is always a healthy debate to have but the one thing that underpins and binds us all is that we are all passionate supporters of our wonderful club who just want us to be as successful as we can. So please keep asking us questions, suggesting ways we can improve and even better Join the Trust and then put yourself forward to become a future member of our Board just like so many previous members that have contributed countless hours over the past 21 years or so.
Thank you / Diolch
Dave Dalton
Chair, Swansea City Supporters’ Trust
24th February 2022
Of course it remains to be seen whether or not fans will be happier having now learned more details about the agreement, but it is probably fair to say that more reaction and information will come to light in the coming weeks and months.