Having put the trial of John Terry behind us, Chelsea fans face another ordeal in the next week as as the continuing vexed issues surrounding CPO come to the fore again.
For those of you who are new to this column, or have been living in a cave for the past ten months, a brief recap. The board of Chelsea Football Club proposed to purchase the lease from Chelsea Pitch Owners last October for a sum which would have amounted to in the region of £20 Million.
After a bitterly fought campaign, shareholders voted against the proposal. Richard King resigned as Chairman and was succeeded by Steve Frankham, who appointed Gray Smith and Dennis Wise to the Board. Following January’s AGM, Gray Smith was tasked with compiling a report into whether or not the sale of a number of shares which were oversold by the board, particularly those which were believed to have been purchased by buyers with an affinity to the football club, were valid.
Mr Smith has now presented his report which advised that ownership of the shares is legally watertight, and, furthermore, sales of the CPO shares, which had been suspended following last year’s AGM, should recommence, otherwise CPO may well find themselves in breach of the Companies Act.
The EGM scheduled for 23 July had originally been due to take place on 25 June. Unfortunately CPO did not provide the legally required 21 days notice of this meeting and, rather embarrassingly, a number of shareholders who were not aware that the meeting had been postponed, arrived at Stamford Bridge to find that the meeting had been cancelled.
In a further dramatic development, long-standing company secretary Bob Sewell advised Steve Frankham on 3 July that he would not be seeking re-election to the board at the next AGM. In making this news public, Steve Frankham announced that he and the rest of the board would be taking stock of what the role of company secretary entails and making further announcements in due course. Mr Frankham added “Much unfair criticism has been levelled at him since October last and I fully understand and accept his reasons for stepping down.”
There are five resolutions to be passed at Monday’s EGM. Two of these are Ordinary Resolutions, requiring 51% of votes cast to pass, and three are Special Resolutions, requiring 75% of the votes. In layman’s terms, the resolutions are as follows:-
Resolution 1 (Ordinary) – the board would like to sell shares in the company up to a value not exceeding 100,000 pounds (i.e. 1000 shares) before the next CPO AGM, which should be around the end of the year. The originally-tabled Resolution for the cancelled 25 June meeting had proposed that the authority should be set at 5,000 shares per year.
Resolution 2 (Special) – that these shares should be sold to new shareholders. This resolution is necessary because otherwise shares can only be sold to existing shareholders.
Resolution 3 (Special) – a resolution to restrict the number of votes an individual shareholder can cast to ten, irrespective of the number of shares they own. This means a shareholder might own 100 shares, but could cast a maximum of 10.
Resolution 4 (Special) – this would make it a requirement that each Director of CPO must own at least one share in the Company.
Resolution 5 (Ordinary) – this is a resolution to enable the Board to take steps against profiteering. At the moment the value of a CPO share is £100. However, given the high profile that the shares now have, and the increasing value of land in SW6, the “market value” of a share is, in reality, considerably more. There is some concern that “carpetbaggers” may be attracted to the shares or that those already holding share may wish to make a profit. For younger readers, “carpetbagging” was a popular phenomenon in the mid to late 80s and early 90s during the sell-off of public utilities and banks. Ordinary members of the public would buy their allocation of shares, and once the shares “went public”, would sell them, often making profits of thousands of pounds.
The lobbying group Say No CPO, who are dedicated to keeping pressure on the board of CPO to turn down any offer made by the football to buy the “pitch”, have issued a counter-statement recommending that shareholders vote against Resolutions 1 and 2, but for Resolutions 3, 4 and 5.
SNCPO also continue to press for more transparency from the CPO Board as promised at January’s EGM, and have alleged that the minutes from the board meeting of 14 March 2012 have only been published in an abridged format and allegedly do not include the section where ” most of the recommendations for dealing with the ‘concert party’ shares bought in October [i.e. Gray Smith's report] were rejected.”
In the months since their launch, Campaign55 have changed their philosophy and their position is now that “given the lack of suitable alternative sites within a 3 mile radius and the fact that it is now clear an expanded stadium is the preferred solution for various local and city authorities, it is Campaign55’s view that 100% of its efforts will now be focused on campaigning for the redevelopment of Stamford Bridge” and that they are now withdrawing support for a move away from Stamford Bridge unless convinced by Chelsea FC and Hammersmith and Fulham Council that a 55,000 seat stadium is not a viable project. They also support voting down Resolutions 1 and 2 but voting for Resolutions 3, 4 and 5.
As can be seen, the biggest disputes are likely to be in respect of Resolutions 1 and 2. And here lies the rub. CPO appear to be in breach of company law by not trading – since Richard King gave up the income streams provided by the Annual Lunch, the Lottery and new credit card applicatios, they currently have no other source of income apart from share sales.
My own position is that I would like to see shares go back on sale, but it has to be to genuine Chelsea fans. This can be done quite easily. All prospective purchasers have to do is to provide their season ticket or membership numbers. This will undoubtedly limit the opportunities for those purchasers whose motives might be viewed as suspicious.
And whilst we’re talking about revenue streams, again, this is something that the Board of CPO can address, and was referred to in the excellent Chelsea Football Fancast CPO special which was recorded last week. Adil Pastakia of Campaign55 pointed out that CPO was no longer “fun”. How about making it fun again by organising some functions? Not po-faced lunches costing £140 plus VAT, but perhaps cheap and cheerful hot buffets with celebrity Chelsea guests and auctions? During a meeting with Steve Frankham last autumn which I attended, he said that the lunches were by far the biggest income stream which CPO enjoyed. Don’t fancy lunch? How about a music night? Or a quiz night? And what’s more, don’t just invite the shareholders. Make it open to all Chelsea fans. And these events don’t have to be held at Stamford Bridge either. Whilst there’s a possibility that the club might provide a venue at “mates rates”, it’s about time that CPO began to take back some of the power that it ceded under the chairmanship of Richard King and showed real independence from the football club.
One of the biggest problems Chelsea Pitch Owners has just now is that it’s seen as a niche issue, concerning the shareholders and a few activists. The Board of CPO should be trying to involve as many of the rank and file support in their endeavours as possible.
And other Articles of Association need a re-think too. At the moment the club are paying the Board of CPO a peppercorn rent. This needs to be raised to a reasonable commercial level and would provide a further revenue stream. And the club taking 85% of whatever CPO raise needs to cease. Perhaps the departure of Bob Sewell – and it is unthinkable that the Board can continue with only four Directors – may serve to galvanise a body which seems to be slow in coming to terms with the problems they face. Whilst Steve Frankham has only been in the chair for eight months, it is time for the Board of Pitch Owners to start shaking off the remaining shackles of the King era and making some money to prove that they are serious about CPO’s future and not just lying down prior to another proposal from Chelsea Football Club.
I’m still convinced that had the Club been more transparent with the fans last October with regard to the location of any new stadium, they would have won the vote. I also firmly believe that had they secured the land at Battersea Power Station, subject to a Conditional Sale Agreement being implemented to protect the interests of CPO prior to any move being completed, then such a resolution would also have been passed by CPO shareholders. It remains to be seen whether Battersea is, in the words of one of CFC Truth’s “sources”, “… not a dead duck but it is a severely injured one”.
Speaking of “CFC Truth”, sadly they did not send a contributor to the Chelsea Football FanCast CPO Special. Their continued anonymity does nothing to support their claim that they are an independent entity, and in fact simply encourages speculation as to the identity of those involved, and that they may be a mouthpiece for the CPO Board. Indeed their post of 15 July which responds to suggestions that Steve Frankham is involved with them as being “ridiculous and dangerous” is melodramatic in the extreme. Given their continued reluctance to disclose who they are, one wonder exactly what it is that the member(s) of CFC Truth have to hide.
One final question. With a prospective massive injection of cash due to come from the next Premier League contract, you have to ask yourself whether the football club would be better off using this money to expand Stamford Bridge, rather than throwing in the region of £1 billion at a new ground. But ultimately that depends what they’re aiming at. If they are looking at expansion of corporate areas and more seats for fans, Campaign55 are certain this can be achieved, and for much less (said to be in the region of £270 Million) than a new-build ground. However, if Chelsea are looking to secure a naming rights deal, then they will be determined to push through a move as a name change would be hugely difficult to implement at Stamford Bridge. The management of Newcastle can testify to the reluctance of supporters and media to embrace such a change.
I’ll be at Monday’s EGM and there’ll be a report of events in TheChels.Net next week. You can listen to the excellent CPO edition of the Chelsea Football Fancast, featuring many of the protagonists (none of whom seem scared to disclose their identity) here chelseafancast.com, keep up with developments at SNCPO here saynocpo.org and learn more about Campaign55′s plans for an expanded Stamford Bridge here campaign55.org. You can read CFC Truth’s take on issues at cfctruth.blogspot.co.uk.
In the meantime you can follow me on Twitter @BlueBaby67
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