Well Society reject Motherwell investment proposal
Last updated 10th Jun 2024
Motherwell's majority shareholder has opposed a £1.95million investment proposal which would see control of the club shift to an American family and ultimately end a period of fan ownership.
The club board reached an agreement which would see American TV executive Erik Barmack become chairman for an initial £300,000 investment.
However, the Well Society board has urged members to reject the proposal in a ballot which will take place in the first two weeks in July. The Well Society's 71 per cent stake will be crucial as 75 per cent of shareholders need to approve it for it to pass.
That share would drop to a maximum of 46 per cent under the proposal, which would see the Barmack family's Wild Sheep Sports put in a total of £1.95million for an ultimate stake of 49 per cent.
It is understood TV executive Barmack rowed back on his initial request for a majority shareholding but the deal would immediately give him and his colleagues the upper hand in the Fir Park boardroom with three seats in total.
A statement from the Well Society, which has close to £800,000 in cash reserves to protect the club, read: "The Well Society Board, by 6-3 majority, does not believe the negotiated terms are advantageous to the club and recommends that Well Society members reject this offer in a forthcoming ballot."
Motherwell appealed publicly to the United States market for investment in January in a plan driven by outgoing chairman Jim McMahon, who said: "The new money will be very helpful in underpinning our budget and allowing additional income from cup runs and player sales to be invested on a longer-term basis; but is not in itself transformational.
"What could be is the access to other income sources, new fans, media connections and commercial opportunities that Erik and (wife) Courtney are looking to bring."
Erik Barmack added: "My wife Courtney and I deeply respect Motherwell FC's culture and identity, especially its fan ownership, which is a vital part of the club's DNA. Our aim is to complement, not control, the Well Society's shareholding and support its core mission."
The Well Society board does not agree that would be the case. It remains open to external investment and is set to unveil its own business plan, which its says has "been in development since the beginning of the year, with input from supporters, consultants, football experts and business professionals."
Under the club proposals, the Well Society would be expected to write off half of its £868,000 loan to Motherwell and contribute £1.35million over the six years, while seeing its shareholding drop.
The group outlined six key arguments for rejecting the deal.
It claims ending fan ownership would open the club up to "significant long-term risk", that the deal "drastically undervalues" the club at less than £4million, and Wild Sheep would "immediately receive disproportionate influence in the boardroom".
The Well Society only temporarily had a majority on the club board for two months during the eight-year spell of fan ownership.
It says there is no logic or fairness in fans being asked to put in £1.8million in loan write-offs and further contributions in order to see their shareholding drop, a situation which it fears would lead to a "drastic reduction in memberships and income".
The elected fan representatives have also criticised a "buyback option" which could see it pay Wild Sheep £60,000 on top of its £600,000 investment after two years to reassume the shares it already owns, having also committed £400,000 to the club, thus wiping out its cash reserves.
Motherwell supporters have already paid out more than £2million to own their club since the Well Society was launched in 2012, a sum which was further enhanced by donations from business people totalling more than £500,000, notably former owner Les Hutchison.
Barmack outlined his plans which would focus on "infrastructure and long-term strategic projects" rather than Stuart Kettlewell's transfer kitty and included aims to grow broadcasting revenue, utilise artificial intelligence and seek additional investors.
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