Minutes of Meeting held on 24th May 2005

Present: John Buchan, Graham Hamilton, Stephen Jones, Michael McPake, Nelson Robertson, James Smith, Jim Thomson.

Apologies: David Ogilvie.

Robin Bairner also attended as an observer

1. Chairman’s Opening Remarks

GH welcomed Robin, who had expressed interest in Trust. The meeting was called early, to discuss the recent announcement that Mr McKenzie is looking to sell his shares in the Club.

2. Minutes of previous Board meeting held 14th April 2004

The minutes were approved, proposed by Graham Hamilton, seconded by James Smith.

3. Matters arising

Club Rental – Stirling Council are non committal as to whether there is rental outstanding for Forthbank, either as arrears or as monies due for increased rent.

Quiz Night – Chair has written a thank you letter to all but one of the Sponsors.

Questionnaire – Outstanding

Sponsored Walk – Around £700 was raised, a possible further £70 to be collected. JS was thanked for his efforts. Future walks will take place, but once every two years thought best.

Hall of Fame – still no contact from Club, agreed there is little point in progressing; it would not be possible without endorsement from SAFC.

4 Appointment of Office Bearers

Convener – Graham Hamilton, proposed by J Thomson, seconded by N Robertson.
Vice Convener – Nelson Robertson, proposed by J Thomson, seconded by G Hamilton.
Secretary – Jim Thomson, proposed by G Hamilton, seconded by J Smith.
Treasurer – Nelson Robertson, proposed by J Thomson, seconded by J Smith.
Membership Secretary – James Smith, by G Hamilton, seconded by N Robertson.

D Ogilvie has offered to assist with PR and Publicity.

5 General discussion
RB was then invited to ask questions about the Trust. Details were given of fundraising activities, attempts to get businesses involved in Trust and attempts to get SAFC to recognise the Trust. Three meetings have been held with Directors, to date no recognition. Stirling Council has offered a financial deal to SAFC provided there was community involvement in the Club. The Trust is recognised by Stirling Council as being a community body.

NR gave examples of how other Trusts have been able to help their Clubs. Chesterfield give out £1 voucher to children, this encourages them to return with parents and has seen attendances increase significantly. Falkirk Trust for example paid the wages of Samuel, now a Dundee United player. Other Trusts help with administration. We made a similar offer; we suggested we take on responsibility of producing the match-day programme as a way of proving our intent. SAFC would retain editorial control; the Trust would arrange advertising, printing and distribution. We offered to arrange a 60th anniversary Hall of Fame. We, along with the Young Reds and the Supporters Club would take on all the financial liabilities. Profits would go to the Youth system. Despite our best efforts we have been unable to persuade the Club that we can work together.

In our effort to get new members, we cannot be seen as attacking the Club. JT explained position of previous Trust Board members who were becoming frustrated with Club. We had decided a softly-softly approach, which was not working. Some on the Board felt we were too soft, some lost heart as we were getting nowhere, it culminated in the resignation of the Chairman. Without recognition from the Club, we can only do a limited amount of work to promote SAFC.

The Trust was set up for a number of reasons, mainly because the debt continues to rise and there is a need to get in under control. Supporters are in the best position to assist in this matter, as our only interest is in the survival of the Club. A discussion followed on certain aspects of how the Club is run –

• The Club are not good at PR or fundraising.
• Phone calls are not returned.
• New technology is shunned. Credit card sales for example.
• Family gate not promoted, no student gate.
• No social club.
• All offers of help from the Trust and individuals have been knocked back.
• The Club has seen 3 commercial managers resign in recent years.
• A successful annual Sports Dinner no longer takes place.
• Local Businesses are not interested in the Club.
• A Board of Management, set up by Stirling Council to assist the Club was disbanded.
• Lack of community involvement– Highland League tour quoted as example. Board advertising, adverts in programmes, posters in all the shop windows.
• The Young Reds open day no longer takes place.

All these and other matters need to be sorted out.

6 Trust Business Plan 2005.

Outstanding. It was intended that we bring forward the plan before the start of the new season, it might have to be shelved until the financial position of SAFC is resolved.

At April meeting it was also proposed that we prepare a draft business plan for running SAFC. Given recent announcement, we will have to decide how we can tie this in with Mr McKenzie’s intention to sell his shares. He also announced that the Club will never go into administration. The administration issue is not as simple as it first appears. The Club has no assets with which to pay for administration. Unless someone is willing to pay the administrator, it cannot happen. The next option is liquidation, which will mean an end to the Club. Another threat to the survival of the Club would be a possible franchise, similar to Airdrie buying over Clydebank.

JT went over recent year’s SAFC accounts and described the financial position at end of season 2003-4. It is likely that a further loss of £120-£150K occurred in 2004-5.

That would place the Club debt at around £1.37M.

A discussion followed on various scenarios. The background is –

The Debt in 2003-4 was £1.25M, made up of a Bank Loan/Overdraft of £336K, a Directors Loan of £750K and the remainder being various trade creditors, PAYE and VAT. Mr McKenzie has said recently that there is no debt outstanding; we must therefore assume then that there are no arrears of rent. We also know however that the new rental arrangements have not been enforced. When it is, their will be additional rent. It is assumed that Mr McKenzie can no longer afford to bankroll the Club and will have to make significant cuts in costs.

Scenario 1
Mr McKenzie can find a buyer and all the debt is either paid off by a new buyer or by Mr McKenzie. That means the Club are running at a loss of around £100 – £130K per annum (Interest payments of around £20K no longer apply). For a 20 team squad, that is the equivalent of £100 to £120 per player per week.

That is not sustainable. There are ways of dealing with the loss. The obvious answer is to cut wages to the minimum possible. That would probably mean relegation and a drop in attendances. That in itself would not be a disaster, so long as supporters recognise that it is essential for the survival of the Club.

• Reduce player wages and administration costs. Say £80 per player per game = 15 players x £80 x 40 = £48K.
• Increase turnover –
* Attendances, fans will initially rally round and with goodwill and better PR, the fan base can be increased, say 20 home games, 200 extra at £7.50 (net of VAT) = £30K.
* Merchandise, finding an outlet in the town and exploiting the internet could raise around £20K profit per annum.

That still leaves a shortfall of around £2 – £32K.

Scenario 2
Mr McKenzie can find a buyer but the Club retains the overdraft. That means the Club are running at a loss of around £120 – £150K per annum.

Again costs have to be controlled.

• Reduce player wages and administration costs. Say £80 per player per game = 15 players x £80 x 40 = £48K
• Increase turnover –
* Attendances, fans will initially rally round and with goodwill and better PR, the fan base can be increased, say 20 home games, 200 extra at £7.50 (net of VAT) = £30K
* Merchandise, finding an outlet in the town and exploiting the internet could raise around £20K profit per annum.

That still leaves a shortfall of around £22 – £52K.

Scenario 3
Mr McKenzie cannot find a buyer in the short term. He has said that he will ensure that the Club does not go into administration. This is not sustainable unless he cuts costs drastically.

Given that away attendances should improve this season, the financial problems should not be so severe.

Scenario 3 is therefore the most likely. Following discussion, it was agreed that we make the following unconditional offer to the Club –

• Offer the assistance of the Trust in reducing administration costs.
• Offer to help raise the profile of the Club and encourage more fans to attend.
• Offer to help with fundraising.

We appreciate that the Trust cannot be seen as a stumbling block to him selling shares; hence any non-financial offer is unconditional.

The Trust also considered the possibility of us raising the £3K per week shortfall for a short period to keep the Club afloat. Under these circumstances, the Trust would seek something in return.

• We must know that the Club can survive. That means Mr McKenzie must confide in us his intentions, should a buyer fail to materialise. We appreciate the confidential nature of any such discussions and how it might hinder his negotiations with a potential buyer; however the long term survival of the Club is the key issue for the Trust.
• The Accounts must be opened up for inspection.
• We would also require shares in the Club.
• It was noted that Mr McKenzie has said he will not allow the Club to die. Supporters are used to him underwriting the debt so they might see the Trust’s offer to raise cash as premature or a way of undermining the Club. Again efforts to fundraise might also hinder Mr McKenzie in his efforts to find a buyer.

This situation has to be handled delicately. It can only be dealt with through dialogue with the Club.

It was agreed that The Trust will come up with ideas on how we can assist the Club. The Secretary is to write a draft letter in to go out in the name of the Chairperson. The following were discussed, advertise game, encourage season ticket sales, help with PR, run club shop, offer to run internet sales.

Trust also considered approaching local businesses who might be interested in buying the Club or put cash into Trust for same purpose. Place on agenda for next meeting.


Consider producing 60th anniversary T Shirt. A Grieve is believed to be considering same, Secretary to make contact.

Secretary is to inform Bank of new signatories to account.

Membership to run from 1st September 2005, to encourage members to join at same time, as its now a rolling membership.

8 Date of Next Meeting

To be arranged, due to holidays, sometime afterv28 June in the Albion Bar, Barnton Street, Stirling. Earlier meeting will be called if required