The Fan Led Review of Football Governance was the result of three points of crisis in our national game. The first was the collapse of Bury FC. A club founded in 1885, which had existed through countless economic cycles, several wars and 26 different Prime Ministers ceased to exist in 2018-19 with a devastating impact on the local economy and leaving behind a devastated fan base and community. This led to the commitment in the 2019 Conservative Party manifesto to ‘set up a fan-led review of football governance…’.

The next crisis was COVID-19. For the first time since the Second World War, club football was brought to a complete halt, threatening the continued existence of many professional football clubs. The pandemic and its effects laid bare the fragile nature of the finances of many clubs, as well as the structural challenges of the existing domestic football authorities.

The final crisis was the attempt to set up a European Super League in April 2021. This new competition would have involved six English clubs as founding members, protected from relegation. It was a threat to the entire English football pyramid and led to an unprecedented outpouring of protests from fans, commentators, clubs and government. As a result, the Secretary of State for Digital, Culture, Media and Sport (DCMS) announced to Parliament on 19 April 2021:

“…it’s clearer than ever that we need a proper examination of the long-term future of football. To many fans in this country, the game is now almost unrecognisable from a few decades ago. Season after season, year after year, football fans demonstrate unwavering loyalty and passion by sticking by their clubs. But their loyalty is being abused by a small number of individuals who wield an incredible amount of power and influence.

If the past year has taught us anything, it’s that football is nothing without its fans. These owners should remember that they are only temporary custodians of their clubs, and they forget fans at their peril”.

The terms of reference for Fan Led Review of Football Governance were issued on 22 April 2021. These charged the Review with the aim to ‘explore ways of improving the governance, ownership and financial sustainability of clubs in English football, building on the strengths of the football pyramid.’ 

WHUISA was approached by the FSA and asked to be one of the Premier League groups to present evidence to Tracey Crouch and her panel towards the fan-led review. The Premier League representatives gave their evidence on the 14th June.

WHUISA was asked to present evidence around the value of a ‘golden share’ in ensuring how the cultural heritage and history of a club, in our case West Ham United, would be protected.

Our Chair, Sue Watson, spoke about the history of a football club and how the cultural heritage develops from that, leading into the impact of this on supporters of all generations. She described how a culture grows out of the shared stories, the memories, the rituals, songs, and the home stadium itself. However, she emphasized that the most important aspect of the cultural heritage are the supporters – while owners and shareholders come and go, supporter loyalty remains consistent.

We argued for the introduction of a golden share as it would ensure that the best aspects of a well-run business become part of how the Club relates to its supporters. Decisions arising from business plans, whether stadium moves, training facilities and badges, would be made with those who are the most emotionally invested in their clubs.

Finally, Sue gave a passionate and emotive description of the impact on her that followed the move from the Boleyn Ground to the London Stadium. From a deeply personal perspective, she described how moving to the new ground has decimated the culture of West Ham fans who must pick up the pieces and attempt to fit new memories into that heritage."

You can listen to Sue’s presentation (6 1/2 minutes) 

The Report recommends:

Football clubs are a vital part of their local communities, in recognition of this there should be additional protection for key items of club heritage.

It should be a licence condition that all licenced clubs should include within their articles of association a Golden Share requiring democratic consent to proposed actions relating to identified heritage items. Each Golden Share right should have circumstances in which it will not apply.

The consent of the holder of the Golden Share should be required for the sale of the club stadium, relocation outside of the local area which is not a temporary part of a redevelopment, joining a new competition that is not approved by FIFA, UEFA and the FA and/or leaving a competition in which it currently plays, club badge, first team home colours, and club playing name.

The proposed key general characteristics of this Golden Share are:

• It shall not have any financial value or be capable of being transferred or otherwise disposed of other than to an alternative supporters body that also meets the required criteria

• As it is not intended to convey ownership rights, it shall carry no rights to receive notice of or attend at a general meeting of the club or any rights to vote on any ordinary or special company resolution

• The rights attaching to the special share shall not be capable of variation other than with the consent in writing of the holder of the share and the independent regulator

Chapter 8 of the published Fan-led Review states:

The objective of the Golden Share is to provide legal protection for heritage items and ensuring fans are considered in any action relating to these items. As a result, it is therefore proposed that the Golden Share be held by a fan representative body.

A Community Benefit Society (‘CBS’) formed under the Cooperative and Community Benefit Societies Act 2014 offers many of these features. These are a specific type of company which exist for the broader benefit of the community which could be applied to the supporters of a specific football club. A CBS:

• is incorporated and has legal personality

• has community benefit written into its governing documents and must conduct business for the benefit of their community

• must operate on a democratic one-member-one-vote basis

• cannot distribute profits among its members

• are subject to regulation by the Financial Conduct Authority

• are an asset locked organisation meaning any rights or assets owned by it are protected and cannot easily be transferred

A fan representative CBS will be in an important position, and it is therefore crucial that it is constituted and operates according to high standards. The key document in a CBS is the rules document. This sets out the rules that govern key items such as membership, voting, and office holders. The Governing legislation gives a great deal of discretion to each CBS but these rules must be registered with the FCA. Any subsequent alteration to the rules must be registered with the FCA.

73 out of the 92 League clubs currently have a CBS in the form of a Supporters Trust. It should be open to existing Supporters Trusts to be the Golden Shareholder, provided that they adopt and operate according to the standardised IREF rules.

West Ham United Supporters’ Trust has been set up as a Community Benefit Society under the Model Rules for a Football Supporters Community Mutual, drawn up by the Football Supporters’ Association. These FSA rules are expected to form the basis of the standardised IREF rules.

Our Model Rules and other information relating to the legal structure and obligations of the Society may be found under the Company section of our website: whust.org/company

Ironworks 1895 Supporters Society Limited, trading as the West Ham United Supporters’ Trust, is a registered Community Benefit Society under the Co-operative and Community Benefit Societies Act 2014 and regulated by the Financial Conduct Authority - registration number: 8741.

 The implications of a "Golden Share" in football

Stuart Hatcher - a Partner in the Corporate team at law firm Forsters, was the lawyer who advised the Brentford Supporters’ Trust on the implementation of its ‘golden share’. He thought that it would be worthwhile reflecting on the key points to consider in relation to such a share.

When Tracey Crouch MP published her report on the “fan led” review of football, I was taken by the reference to the intention to “develop proposals…to offer greater protection…through a ‘golden share’ for fans, giving veto powers over reserved items, to be held by a democratic legally constituted fan group”.

What is a ‘Golden Share’?

It’s a basic legal principle, well known to corporate lawyers, that a share is just a bundle of rights the benefit of which is held by the holder of such share. So, for this purpose, a ‘Golden Share’ is simply another share (albeit designated as a ‘Golden Share’) which is issued by a company to which certain rights as set out in the company’s articles of association attach.

Tracey Crouch MP, in her report, obviously envisages that football clubs will issue a new share (this ‘Golden Share’) to supporters’ groups. In many cases (including Brentford’s) this will be the club’s existing supporters’ trust which will thereby become the effective custodian of the ‘Golden Share’ and the rights attaching to it.

Why have a ‘Golden Share’?

Looking at Tracey Crouch MP’s report it’s clear that her focus is protecting the ownership of a club’s stadium, badge, location and colours. A ‘Golden Share’ could be used to give veto rights to a club’s supporters to protect all of these matters and so enable fans to protect their club’s heritage.

To my mind, the main benefit of a ‘Golden Share’ is that it provides fans with a say over, what is to them, some of the most important aspects of their club without an existing owner (who has invested a considerable amount in the club) having to give away valuable shares or otherwise asking fans to raise the funds to buy shares from an owner

Read the full article here →

You can read Stuart’s full article on Forsters website where he also discusses ‘Golden Share’ considerations

Which entity should hold the ‘Golden Share’?

Which veto rights will be granted to the fans?

What other rights could be granted to fans in relation to a club?

Should all aspects have the same veto rights?

How will the fans use the power of veto?