About the deal…
Everything you ever wanted to know about buying Raith Rovers and weren’t afraid to ask!
What is the deal that is constantly being talked about?
Very simply we’re bringing a consortium of investors together to buy the club. The stadium, because it is an asset that we can secure financing against, will be separately dealt with but owned by the same consortium of people just in a different form.
If all goes to plan a consortium of investors (known as New Raith Rovers) will own the club. One investor, who is able to provide the financial guarantees required, will own the majority stake in the stadium but New Raith Rovers will also have a stake in the stadium to ensure some joined-up thinking.
Who are New Raith Rovers?
The supporters group “Reclaim the Rovers”, two groups of smaller investors, John Sim (a senior financial figure with KPMG), Mario Caira, Turnbull Hutton and potentially one other large individual investor.
Why can’t you tell us exactly who the other investors are?
It’s only fair to allow people their privacy. If they are OK about being publicly involved then that’s great but some people just want to help out and aren’t looking for publicity. If they would rather they keep their involvement private then we should respect that.
Why are Turnbull Hutton and Mario Caira involved?
As part owners they have considerably helped to progress the deal by agreeing to take a financial stake in the new company. Without this sacrifice we would have little chance of attracting the funds required. As with any investor they deserve to have an opportunity to voice their opinion within the new company.
Why is it taking so long?
Because the consortium involves so many different people, we have to carefully work our way through some important legal steps and convince enough outside investors that they should get involved.
It’s a bit of a Catch 22. In order to convince investors to commit funds we have to know roughly what it’s going to cost, what the risks are and how much investment is required. In order to have that information we need to negotiate a price, calculate the current financial position and be appraised of the ongoing costs of the business. Then we need to figure out how much we are willing to pay and how much the various parties are willing to accept. That means that both elements rely on each other.
Building a consortium is time consuming and calculating the various costs also takes time whilst at the same time we need to go back and forward with negotiations. We know it’s frustrating but without money to burn and a gung-ho attitude we have to do a deal that we can afford and will be in the best interest of the club in the long term. If that means taking a few extra weeks to get it right then, as painful as that is in the short term, that what we have to do.
So, have you actually made any progress at all?
Yes. It doesn’t really matter if we can tick 90% of the things needing done because only by completing 100% will change happen. It’s all or nothing really.
Has Mr Penman pulling out made this impossible?
No. It changed the way we had to construct the deal but there are advantages to this deal and options that wouldn’t have been available had we kept going down that route. Unfortunately this has meant more time has been expended constructing the new deal and dragged the process on for longer than anyone wants.
So when the deal goes through we’ll be rich and have pots of cash to spend on players?
No. The cost of paying for the club and settling the outstanding loans and debts to the end of the season will take the lion’s share of the buyout funds. We are aiming to have a reasonable contingency fund to ensure that cancelled games or unforeseen bills do not throw the club into crisis again. We can’t afford to let the club get into financial trouble and we owe a duty of care to all investors to ensure there are enough funds to make a go of it.
How much is this all costing?
The total deal will be around £1.3 million.
Where is all this money going?!
A mixture of repayment of soft loans, debts and ongoing costs.
When is a deal likely to be struck?
At this point we’re hoping that the final few investment partners will agree to commit funds to the buyout and we can settle on a price that’s acceptable to all – that could happen in a matter of days but we won’t set a date and become a hostage to fortune. We’re aware that the sooner this is completed the better it will be for everyone.
If we’re successful who will run the club?
Initially the New Raith Rovers consortium will appoint directors to get stuck in and put foundations in place. They’ll examine the running of the club from top to bottom and decide what is required to make it an efficient and responsible community club. This may well include appointing some new club directors who will run things on a day-to-day basis and support the existing staff in their work.
How will the supporters’ money be represented?
It was agreed between the groups that the Trust will have the legal shareholding as it was best suited for this purpose, but that the combined group will recommend who will represent the supporters in the short term. Initially Ali More has been put forward to the board of New Raith Rovers and he has the full support of all the supporters’ organisations. This position will be reviewed at the end of the season and hopefully there will be a way of supporters nominating and democratically electing the person they want to represent them. In the meantime Ali will work with the new board to help put the new foundations and organisation in place.
What about all the talk of a community club?
There’s little doubt that the club needs to have a radical rethink if it is to be successful in the coming years. Success is not only measured in league placing, it’s also measured by the impact and interest in the local community. Quite simply, if the local community sees the club is making a real difference to the community and isn’t just looking for handouts, then it will be much more likely to give its support – both through the turnstile and through commercial income. A club with a progressive community attitude is much more likely to attract the resources that will allow it to compete at a higher level.
Each week we ask the team to give their best for the cause. Now we’re saying that we will give our best to make Raith Rovers a source of pride and goodwill in the community. We believe that the “Reclaim the Rovers” campaign has given the club a respect and profile in the community that it hasn’t had for many years and we aim to build on that work and develop the club.
What can I do to help?
You can support the events that will be organised over the coming months. By joining one or all of the supporters’ organisations you should also be kept informed of what is happening. Financially you can contribute to the Loan Fund which will provide ongoing support. But simply by coming to games and spreading the word when things change you’ll be helping the club move ahead.
Just how bad a state is the club really in?
It’s in poor shape principally because an unrealistic budget was set for this season without the income to back it up but the problems go back many years. However, it’s really time to focus on the future. An agreed buyout should give the club the stability it needs but initially you may not notice too much of a change. Buying the club is a mighty task but rebuilding it is much more complicated and a long term project. However with the enthusiasm of volunteers and your continued support we could really do some great things. We hope you’re willing to join the rollercoaster ride!