Motherwell shareholders are to vote on a deal allowing a former Netflix vice president and his wife to own up to 49% of the football club – but the Well Society board has opposed the move, saying it is not in the club’s best interests.
Erik and Courtney Barmack have made a detailed proposal to the Fir Park club, which would see them invest funds over the next six years, building their shareholding step by step until they own just under half the business.
The Motherwell board, which created a viral video asking for Hollywood investment last year, has recommended that the offer is accepted. Shareholders are being asked to vote on the deal in July after a three-week consultation period, and if 75% of the votes are in favour then the investment plan will be formalised.
Motherwell is currently fan-owned, with supporter organisation the Well Society holding 71% of the club’s shares.
The Well Society board instantly advised its members to reject the deal, saying that it undervalues the club, hands the Barmacks a disproportionate influence from day one and diminishes the organisation’s ability to protect the club.
Details of the plan show that the fans group would see their share of the club drop from 71% to 46% over six years.
In a letter to shareholders, Motherwell chairman Jim McMahon wrote: “As has been well documented, the club has been in discussions for a number of months with Erik Barmack, a Los Angeles based entrepreneur. These talks have centred round how Erik and his wife Courtney could make an investment in MFC and become involved in helping to run the club.
“These negotiations have now advanced to the point where MFC have signed Heads of Terms (HOT) about how this would work going forward and the board of the club are recommending that shareholders accept the offer.”
Erik Barmack wrote: “I recently had the pleasure of meeting so many of you in person, hearing your inspiring stories, exploring the town of Motherwell, and witnessing firsthand the vibrant atmosphere at Fir Park. Thank you for your time and sharing your Motherwell passion with me. I appreciate now more than ever what makes Motherwell so special.
“My wife, Courtney and I deeply respect Motherwell FC’s culture and identity, especially its fan ownership, which is a vital part of the club’s DNA. Our aim is to complement, not control, the Well Society’s shareholding and support its core mission.
“We are incredibly excited about the possibility of joining forces with all of you to enrich this foundation with new resources and innovative ideas, propelling the Steelmen forward while preserving its cherished traditions. We are committed to a long-term partnership that focuses on sustainable growth without imposing financial burdens.”
The details of the proposal show that the Barmacks would invest £300,000 per year for the first three years of the agreement and £350,000 for the next three years, while the Well Society would put in £200,000 for three years and the £250,000 for another three years. Existing minority shareholders would have the right to make their own investment on a pro-rata basis.
The Barmacks would own 8% of the club’s shares after the first year, and increase by approximately the same amount until their holding reached 49% by year six.
Erik Barmack would become chairman after the initial investment and the family’s Wild Sheep Sports Investment group would have three of the eight seats on the Motherwell board.
The Well Society would have a buy-back option for the first two years to exercise if the partnership did not work out as envisaged.
The Motherwell board say the deal has multiple safeguards that would prevent assets being sold, external debt being taken on or any value other than expenses being moved to the Barmacks.
They believe the proposal is not financially “transformational” by itself but can provide additional security, underpin the budget and help to open up new commercial opportunities.
The Well Society board would be expected to write off half of an £868,000 loan to Motherwell, while contributing £1.35m over the six year plan, at a time when their shareholding and influence would be decreasing.
A statement from the group read: “The Well Society Board, by 6-3 majority, does not believe the negotiated terms are advantageous to the club and recommends that Well Society members reject this offer in a forthcoming ballot.
“The proposal, which follows a campaign for commercial sponsorship, partnership or investment opportunities, would end fan ownership at Fir Park as the Well Society’s majority shareholding drops to 46%.
“The offer of £1,950,000 over six years for 49% shareholding drastically undervalues the club.
“For an initial investment of £300,000 for 8% of shares, Wild Sheep Sports would immediately receive disproportionate influence in the boardroom.
“The deal requires almost equal investment, including writing off 50% of the loan owed to the Society by the club, from the Well Society in exchange for a decreasing stake.
“Well Society plans to grow membership are likely to be severely hampered as the original purpose of the fan ownership model becomes obsolete.
“The Society would no longer be able protect the long-term future of the club as a minority shareholder and, if Call Option or Buyback Right is utilised after two years, would possibly need to ‘start from scratch’.”
Motherwell have been a top flight club for the past 40 years but have finished in the bottom six in five of the past seven seasons. The board estimate that relegation would cost the club £3.5m and say fresh investment can make that less of a possibility.
Barmack has previously described his interest as “a passion-based approach” and insists he is not looking for short-term financial gain.
He has talked about connecting “the world of Hollywood and the world of European football”, building a global following, using social media and artificial intelligence to add value, as well as possibly overseeing a documentary, having been involved in the Formula 1 series Drive to Survive.
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