Dunfermline Athletic

Pars Alive Meeting Thursday 31 January 7.30 pm

Wednesday, 30th Jan 2013

Meeting Update:- "There would be a democratic and equitable structure.

PARS ALIVE MEETING

PICTURES OF THE MEETING
Gavin Masterton addressed a Pars Alive meeting of Dunfermline Athletic supporters in the Vine Church on Thursday night. Margaret Ross on behalf of Pars Alive, welcomed an audience of around 150 She said Pars Alive remain as a neutral organisation to facilitate discussion. Pars Alive have done some fund raising and have donated funds as agreed by their committee, to DAFC. She invited Gavin Masterton to explain about the Club's current plans.

He claimed that work was ongoing to provide a structure to survive. In the current economic situation pressure on all football clubs is substantial
Gavin explained that like everyone present that he was a fan and has been from the age of five, still a fan and trying to progress the club that we all love. DAFC is a community club, trying to nudge forward and for that reason it is important that there is no hostility.

"In the last 10--14 years Dunfermline Athletic has enjoyed more success than many other regional clubs and has one of the best stadiums in Scotland. Because of our record in that time my grandchildren used to think it was the norm to attend Hampden every year. In one close season the club had to build two major stands to comply with SPL criteria. We created Dunfermline Homes and built at Eagle Glen, Oakley, Kelty all the revenue from this went into stadium development to make it fit for purpose and able to play at the highest level."

Gavin confirmed that it costs the Club between £150,000 to £200,000 to fund the U20 team and the only revenue to offset that is the £1000 per game paid by the SPL for every game played at East End Park. U17s run by Black and White receive £80000 but will still run at £50000 loss. That is a total of £200,000 per annulment on youth development. Beside that the Community programme reaches out in permanent commitment to be a community club everyday of the week. Introducing the finances he said "a key achievement is a club with no bank debt and trading losses reducing each year."

The Club had run into cash crisis because 50% of income dried up and coupled with HMRC and power companies penalties Gavin said "I defy any company to lose 50% income without having a cash flow problem.. An in depth budgeting process had been prepared by qualified accountant but attendances changed in profile. The number of home fans is actually up but we have destroyed by lack of away fans attending. Every 1000 missing is a loss of £14000 in hard cash."

An action plan is under way as a recovery plan. It is hoped to raise between £300000 and £500000 from share issue of up to 25% for fans to buy.. This should be available within a few weeks. It is hoped that this would allow creditors to be brought back in line.

Gavin Masterton



Referring to the request for a meeting from group called Pars In the Community. He had met them within but dismissed their offer as "fanciful.

"Their offer is unacceptable Some of the directors names were held back, there were three anonymous parties in the group that I find rather odd. For these reasons I replied to Pars in the Community declining their offer and have progressed with our plan for the share issue."

The club is now embarking in a new direction, and one which will bring the management and decision-making at the club much closer to its fans, and with a vision to eventually become a supporter-owned football club.

Club Historian, Duncan Simpson then explained the share issue. He stressed that he was not a club official but a volunteer. The share issue he said cynics might describe as pouring funds into a black hole, but stressed that it is really a commitment to the football club.

"I love the football club, fantastic institution and do not want to see the club going into administration. Dunfermline is not big enough to have factions vying for power. Trying to get money together to provide working capital Shareholders will be given the opportunity of five or six share packages. Possibly £1 per share. Lowest investment would be 100 shares and would range up to £20000 and over. Benefits would include incentives and these as with the entire share issue package are at a stage of discussion with legal and financial people. Final agreement is expected soon, then it is already to go."

Within the proposed Board structure individual fans purchasing up to 10000 shares would be invited to an annual meeting and one person one vote could elect someone to the Board. Companies investing more that 10000 shares - company or group like Pars Supporters Trust - will get two seats on the Board. This will happen instantly as long as the share issue is a success.

Opportunity for fans to be part of the Club to work on ideas, it could be supporters liaison. How to improve East End Park. A director would help support that group and report directly to the Board. More fan involvement than any model that I have seen. Do not want problems like that experienced elsewhere. Examples East Stirlingshire, Stirling Albion and Clyde.

Duncan expressed his personal view and felt that it could work. Rangers have given fans 12% and one person on the Board. this is 25% and three on the Board.

Gavin then resumed saying that "for every pound raised by way of new monies from the share issue, I will write off an equal amount of the Charlestown Holdings loan - if we raise £300,000 I will write off £300,000 of the Charlestown loan. Then I would gradually work my shareholding down on a pro rata basis, gradually working my share holding down from 75% to 50%.

"There would be a democratic and equitable structure. A structure not miles away from what we see at Motherwell and numerous other clubs. That is the shape I see for Charlestown Holdings".

Stabilise the cash flow is a priority. The 50 year lease at Pitreavie will be moving over to Pars Trust this will release money to allow us to pay every last penny that we owe HMRC.

"We are well down the road the biggest sponsorship that the Club will ever have had. Share issue we hope to launch this will us to regularise the creditors.
No matter who owns the Club we must reduce the cost base. Currently it costs £200,000 per month to keep Dunfermline Athletic and its associated companies alive. Compare that to the gates that we have had recently. At the last home game we had 2000 people and the cash was than £12000. Cost base must be reduced to £150,000 per month starting from next season. It is still a big figure but it changes the whole risk of the business. That has been a key priority for some time. We need to change the way we do business".

To make these savings everything is under review. There is an eight week programme to try and turn this around. The first team budget has to be protected so as to achieve promotion as soon as possible. Dunfermline's average attendances are way ahead of St Johnstone but they benefited to the tune of £1.2m upfront at the start of the season from the SPL. In contrast Dunfermline received £10,000 from the SFL. Given the impending share issue Gavin assured:-

"We are on track to re-position the Club completely and de-risk it. The Board structure will be implemented within the 8 week period with large and small shareholders. Where we are now is that the plan is underway and will be seeking fund raising and various other activities to drive it forward. We are tight for cash until we start collecting in season ticket monies in April and May."

Gavin also revealed that he had received formal approaches from two other groups and " if we do, then we would have another meeting to explain".

On the issue of electricity bills and reports of alleged overpayment. Gavin Masterton explained that the unit rate was increased from 6.5p to 19.5p and despite bringing the account up to date the Club was still experiencing the higher rare and they have now approached Scottish Government to try and resolve the position. Totally ridiculous and don't feel it is a fair to charge excessive rates when the debt has been cleared. It appears that the ability to impose penalties and the continued default rate is approved by Ofgem. A similar arrears situation with Scottish Gas was resolved successfully and no defaults are being incurred with them.

Before he finished Gavin Masterton gave an update on the situation regards payment of January's wages.
65% of first team have been paid, 70% of back room staff, 40% of other staff.

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