Phil Wallace says his offer to buy a share in English club Stevenage gives investors a chance to get a taste of club ownership
Stevenage (United Kingdom) (AFP) - English club Stevenage were rescued from bankruptcy 20 years ago and the fourth-tier outfit have known some stellar times since then, including two victories at Wembley – now owner Phil Wallace hopes a revolutionary share offer will propel the team to new heights.
The businessman is offering generous returns to those who snap up the 12 percent of the club he is offering.
The minimum investment is 40 shares at £25 ($32, 28 euros), while there is no maximum limit, and investors will be rewarded with a 25-percent dividend if they gain promotion to League One, England’s third division.
That dividend will rise to 75 percent should Stevenage reach England’s second-tier Championship for the first time in their history.
Wallace has entered into an agreement with Tifosy – a crowdfunding platform set up by former Italy international Gianluca Vialli and former banker Fausto Zanetton – who handled a very successful mini-bond offer on building a new stand at the stadum a few years ago.
The Stevenage chairman will use the money raised to re-invest in players who he hopes will meet the challenge of achieving promotion for the club based 30 miles (48 kilometres) north of London.
“You are owning shares, you own a part of the club - that has never been done before,” Wallace told AFP at Stevenage’s LAMEX Stadium.
“I would retain the controlling stake. I will still be sitting in this seat,” he adds, seated at the head of the boardroom table.
Wallace, whose club turned a £900,000 profit two seasons ago and pumped all the money back into the club although he expects a loss of £400,000 last season, says he hopes both Stevenage fans and those from farther afield will take up the offer.
- ‘It melted my heart’ -
A new stand at Stevenage's Broadhall Way stadium takes shape - Phil Wallace hopes the funding plan will help the club buy higher quality players
Wallace, whose side finished just one place outside the play-offs last season, said he had had enquiries from Russian and Chinese businessmen interested in buying the club outright.
But he declined as he says he is still enjoying owning the club. Instead, he says his offer represents a cheap and hopefully cheerful first step for those who are interested in ultimately owning a club.
“It will allow some people to put their toe in the water in owning a football club, maybe some with significant wealth,” he said.
“If I was a Chinese guy with a lot of money it is a painless first step.”
Wallace, who says he is lucky enough to have enough money to indulge in the sport he loves, remarks such a limited investment can prevent heartache for those foreign investors who think English football is the land of milk and honey.
“Ownership can be very painful when it goes wrong,” he said.
“Look at this year and last year. I am sure the Chinese owners of Reading did not think they would be down there when they bought (Reading finished fifth from bottom of the Championship)
“This is not dangerous like that, you are not going to lose significant amounts of your wealth at this level.
“You can still have the fun. It is even more fun winning at Wembley when you are in League Two as (when you are in) League One.”
Wallace says if offer is a success it would give Stevenage the ability to bring in better quality players.
Phil Wallace admits that when clubs get richer "it does not guarantee anything"
It would also add £5-600,000 to their annual wage bill of £1.6million and see them move from mid-table in League Two in terms of payers to the top six.
“Money does not guarantee anything, though,” said Wallace, who cited clubs like Burton Albion and Yeovil who are no bigger than Stevenage and have been in the Championship.
“Notts County had one of the biggest budgets last season and got relegated whereas Accrington topped the league despite the smallest budget the year before.
“More money improves your chances of success if you spend it wisely
“We have a good track record in that regard.”
Wallace, though, is also not always the hard-headed businessman as he showed when he agreed to build a nursery school at the club’s training complex.
He had originally intended to do away with it, when he bought the original site it was housed on, but after seeing the 60 children lined up and the 10 teachers, who would have lost their jobs, he performed a U-turn.
“It melted my heart. It should not have done but it did,” he said.