Falkirk fans being urged to splash cash to help plug £400,000 financial shortfall
The club’s board are issuing £500,000 worth of shares in the hope of covering an operating loss this season expected to be about £400,000 and they’re urging supporters to buy them.
If they do, the Bairns will be on track to fulfil their vision of moving towards becoming a fan-owned club like Heart of Midlothian or St Mirren.
If they don’t, though, external investment will have to be sought, warn the board.
The club acknowledge that now, with interest rates and energy prices on the rise, isn’t the ideal time to be asking fans to open their wallets and purses and raid their piggy banks but point out that the current hard times are exacerbating their financial troubles too.
“We fully appreciate that it’s not a great economic climate to be asking for investment, but we also know that Falkirk fans have a great history of backing the Bairns when the club needs us most,” say board members Kenny Jamieson, Keith Gourlay, Nigel Serafini and Gordon Wright in a letter sent out to supporters yesterday.
“As you will already be aware, the club face some serious financial challenges this season.
“After last season’s sizeable loss, we need to grow revenue by around 45% and tightly control costs in order to fund our football budget.
“Even then, we will still make an operating loss of around £400,000, and this has to be funded by new investment.
“Late last year, we laid out plans to grow fan ownership and create a more balanced shareholding structure. This will safeguard the club long term, providing a much broader set of shoulders they can rely upon and will ultimately make them more sustainable and successful.”
The club are hoping to sell the £500,000 worth of shares they’re about to issue by May next year but are hoping to offload half of them within the next three months.
Their target is to raise £250,000 by lump sum investment by the end of the year and a further £250,000 via monthly subscriptions by the end of next May, but they’re asking for pledges for both forms of payment to be made within the next four weeks so they know how much income they’re likely to generate.
“This will allow us time to take mitigative action to address any shortfall against these goals,” they say.
“We still have £500,000 worth of shares to sell, and these need to be sold before the end of the season to ensure we can cover our projected losses and provide a 25% buffer in case we don’t reach our income or cost targets.
“If we don’t sell these shares, the club would run out of cash.
“If fans don’t want to buy them, our options will include selling them to someone else or borrowing the money until they can be sold.”
Other ways fans with money to spare or businesses can help range from buying merchandise, taking up matchday hospitality packages or sponsoring players or even the new Kevin McAllister Stand at the Falkirk Stadium, they say.
Among the club’s biggest backers at the moment is a consortium of 25 well-off fans calling themselves the patrons’ group and it is currently considering adding to the £250,000 investment it made last season.
A relaunched Falkirk Supporters’ Society is also chipping in £6,000 a month, having signed up 500 new members paying subscriptions averaging just over £140 a year.
The board say it’s unfair to expect those 525 or so supporters to keep putting their hands in their pockets, though, as they account for only about a tenth of Falkirk’s following, and they’ve issued a plea for more fans to join the society.
“We have a latent fan-base of at least 5,000 supporters and it’s simply not fair if 90% of fans stand back and watch 10% of fans step up,” they say.
“If everyone chips in at a level they can afford, we can easily achieve these goals, but we all need to put our shoulder to the wheel.
“We’re therefore asking all supporters to sign up for Falkirk Supporters’ Society before the end of October.
“There’s no need to panic or worry. The club aren’t in crisis or in any imminent danger.
“Yes, we’re facing a financial challenge but it’s in no way insurmountable. If we all pull together, and every one of us pulls our weight by contributing what we can afford, we will get through this difficult period.”
To join the supporters’ society, email Serafini at [email protected] or go to falkirksupporters.org/subscribe
For information about the patrons’ group, email Jamieson at [email protected]
For enquiries relating to shares, contact Wright at [email protected]