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Paying the Piper
By: Bill Osborne
On Saturday afternoon at Blundell Park, Grimsby Town will be playing in one of the most important fixtures of the season. A victory over Tranmere is seen by many as the last possible chance for the Mariners to retain their first division status.
Many of the faithful following see Tranmere as an "easier" team compared to the high flyers in the division, who we have yet to meet in the deciding remaining fixtures, and a defeat on Saturday will signal to them the end of Town's hopes of staying in the first division thereby determining the future of Grimsby Town Football Club.
This may or not be a correct assumption, but if we look at the overall situation over the last few years one could, in retrospect, have almost forecasted the position we are in today.
Some of the problems we face on the field today can be attributed to the off-field activities over the last few years and, in that respect, the single most common cause is the lack of capital funding of the club and, like many other clubs in similar constituencies as ours, that problem has always been a factor and unless some well heeled benefactor appears on the scene, it will continue to be the most important factor in the future of Grimsby Town Football Club.
The chances of a mystery benefactor appearing are extremely low which means that the capital required to fast track the development of the club will have to be acquired from other sources and there are very few of those. Grimsby does not have a large number of multi-millionaires awaiting an invitation to plough their millions into the club.
It also appears that although there may be some factional differences existing between the past and current board, there is some agreement between them relating to the responsibilities of board members. Both boards appear, in practice, to agree with the current chairman Doug Everitt's statement that the board's responsibility is to manage the business, and the shareholders responsibility is to fund the club.
The reasons for that could possibly be that there is not a great deal of wealth among either faction and historically speaking, that has been the case with almost every Grimsby Town board since the club's inception so there is little change there.
So if we, the shareholders, the fans and supporters are prepared to accept that proposition and choose to answer the call to fund the club, one would expect that we would be presented with the opportunity to do so.
Unfortunately, that is not the case.
At the last Annual General Meeting of Grimsby Town Football Club Plc., a proposal was submitted to the shareholders to allow an issue of non-voting shares as a means of providing additional capital to the club. Although some could not see the value in non-voting shares there were others who could, if there was a return in the form of dividends.
Notwithstanding any misgivings relating to the shares themselves, it presented an opportunity for the club to acquire additional capital from a new source in a way that would not affect shareholders current holdings thereby removing any fear of factional gains or losses.
The idea might or might not have worked. We will never know because the proposal was defeated by the block vote of the previous board, which effectively leaves us with only one other alternative.
The share equity of Grimsby Town Football Club is one million shares with a face value of one pound each. Of that one million shares approximately 25% have been bought leaving just over 700,000 available for purchase. However, before they can be sold 75% of the shareholders must give the directors permission to sell them and this permission has not been granted previously with the major shareholders blocking any attempt to free them.
It has been suggested that a proposal be put forward at the next Annual General Meeting that the shareholders grant the directors permission to dispose of the unissued shares for 5 pounds each. These shares will of course carry voting rights. If the proposal were to be granted by the shareholders the nett income from the sale would bring just over 3.5 million pounds to the club, which may not be a large amount in today's football but will be the largest single injection of capital in the clubs history.
There would be opposition to the proposal. On the one hand we have the ex board sitting on the sidelines, no doubt looking forward to the day that they can regain control and on the other hand we have the present board who will not wish to relinquish their control.
The freeing up of the shares would produce some competition among the various factions seeking to gain a major portion of the clubs equity. This will not be a bad thing as it will stimulate the sale of the shares and those who purchase the most will gain a controlling interest.
In short: He who pays the piper calls the tune.
The club is desperately short of development funds. The freeing up of 3.5 million pounds of shares will not only alleviate the financial pressures it will also address the ludicrous position of the club having what is probably one of the lowest equity issues in the football league.
As stated previously, both the present board and the past board appear to have complied with the chairman's view that the shareholders should fund the club. It is therefore their responsibility to provide the means for the shareholders or would be shareholders to do so regardless of factional interests. The time has come to unlock the doors of Grimsby Town Football Club to allow the whole community to invest in its future.
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