whose club is it anyway?

by andy godden

It’s not just the dugout and the dressing room that’s seen a Summer of change, the Boardroom has too. As ever with this ownership group though, these changes are shrouded in secrecy. ATFV columnist Andy Godden attempts to scrutinise these changes and explain the ramifications….

As ever, it’s been another tumultuous summer down the Liberty. Russell Martin (eventually) took his coaching staff and his goal kick routine to Southampton. Half the fanbase was devastated, the other half shrugged. We raided Barnsley in return, with Michael Duff bringing him and his guys down to SA1. Fingers crossed he can build on our excellent end-of-season form!

There have also been major changes in how the club is run, with Andrew Coleman swapping the East Coast of the U.S. for the far superior coastline of South-West Wales, being appointed as the new Chairman of our club in May.

That appointment always spelled trouble for the incumbent CEO, Julian Winter, with much reporting about his imminent departure.

A club statement from Coleman, stating his “extreme disappointment” at this reporting was bizarre to say the least (and led to much speculation online that he’d been enjoying the bank holiday weekend on Wind St a little too much), not least as it was an open secret Winter was leaving.

Lo and behold, Winter left in June.

This isn’t an article about Julian Winter, but I’ve always felt he got blamed for things well outside his control. What he could control, such as the excellent (and unreported) community work the club does through its Foundation, fan engagement etc, was spot on. As we saw last January, player acquisition was way outside his control. I wish him well at Blackpool.

New Moneymen

At the time of Coleman’s appointment, a lot was made about how he was a “a seasoned, successful business executive” and importantly would be taking a “significant” shareholding in the club.

The fact he’d have “skin in the game”, with his own fortunes tied in with the success of our club is a good thing – it would ensure he’s focused on giving us the best chance to compete in this most competitive of divisions.

In Coleman’s first statement, he said all the right things about wanting to be as transparent as possible with the fans. Given the lack of transparency beforehand, that was very welcome to hear.

Moving forward to June, and a further change was announced with Nigel Morris joining the board, along with making another “significant” investment in our club.

Morris undoubtedly comes with a fine business pedigree, co-founding and running the financial services arm of Capital One, before running his own hedge fund.

Like buses, another investor came along in July, with Brett Cravatt joining the board, and seemingly making his own investment in the club.

All very exciting right? Little old Swansea City seeing some much-needed cash coming into the coffers, giving us the opportunity to compete with the rest of the division?

Dela - Where??

Well, that’s where things get less clear. Companies House is the official UK register where all director appointments are announced, and all three have been added as directors of our club there.

It’s also the place where investment in the club would be announced, through the issuing of new shares (i.e. equity). This is what happened in June, where it was announced that £10m worth of new shares had been issued, equating to around 20% of our club. This coincided with the Morris investment, and this ties in with what the club has stated on its own website at the time of writing. (https://www.swanseacity.com/club/ownership-statement)

But what of the other two, you say? That we don’t know. There has been no further change at Companies House, so there has been no further direct investment in the club.

For those not familiar with the ownership structure of our club since it was bought in 2016, majority control is held by Swansea Football LLC. This is a U.S. company, filed in Delaware (think Jersey, or Fort Knox, in terms of transparency), where we have no visibility into a company’s ownership structure. This is the company that Steve Kaplan and Jason Levien (and latterly Jake Silverstein) controlled, and currently holds a majority stake (over 60% at the time of writing) in Swansea City Football Club.

This is important to know, because when people talk about who owns our club, we essentially need to know who owns and controls Swansea Football LLC, because the answer is the same people.

If you control the LLC, you control SCFC.

Sticking Plaster

My hunch is that, when Andrew Coleman and Brett Cavatt talk about making a significant investment in our club, what they actually mean is that they’ve spent money to take a stake in Swansea Football LLC.

Why does that matter? Well, look at the differences in their approach when compared to Nigel Morris. In Morris’s case, he has shares in our club, with the money he paid for them going directly into the club, for the benefit of our club. For the others, it’s literally a private transaction between Kaplan/Levien/Silverstein on one hand, and Coleman/Cravatt on the other. There’s no financial benefit to the club. There’s no investment IN the club. The money went to Kaplan, Levien and Silverstein.

It also matters when we talk about the club finances. People think we’re now awash with cash but we’re not. £10m is a lot of money, but in Championship football terms it isn’t. In Swansea terms, it’s less than the annual deficit between our income and the wage bill. It’ll help, but it’s a short term sticking plaster. Having more people with more access to cash is a good thing, but that depends on how it’s used and whether it’s debt or investment.

Only time will tell what this means. Coleman has talked about being the key decision maker going forward, but are his powers greater than Julian Winter’s were? Does he just control the day-to-day stuff, or does he have control over the budget and player recruitment, or is that still something Levien, Kaplan and Silverstein control?

Will more “investors” mean there are more voices and more noise, rather than more clarity? Is it just a bigger group of people playing real-life Football Manager?

My hope has always been that our ownership hires the right people, ones with experience of running a football club, and get the hell out of the way. The hope for many is that Paul Watson, the new Sporting Director, will have greater authority than his predecessors, but the sceptic in me has my doubts. I’m still haunted by Silverstein’s public comments (on Reddit, of all places) in February where he waxed lyrical about Levien’s qualities, how it’s right that negotiations are handled by the owners directly, and how they need to be involved because of all their business experience.

Mate, you really don’t need to be.

The Trust

What of the Trust, the representatives of the fans, in all this? Between a rock and a hard place. Its shareholding has dwindled to somewhere between 9-11% (the exact percentage is an article in itself). If ownership of the club depends on who owns the LLC, its voting rights are irrelevant. Its shareholding is of little value, as why would anyone buy it?

After the settlement that ended legal action, they can’t sell half of it anyway without approval of the LLC. As we’re seeing, it can’t do anything to stop a change of ownership as it’s not party to the company where that happens.

The Trust can still play a valuable role in terms of providing visibility into the club finances and being a voice for the fans within the club, but there’s mounting evidence it’s just being bypassed when it comes to the real decision makers. In fact, the latest Trust board minutes back this up, as they much confirm they don’t have clarity on the ownership structure currently.

It’s worth reading the monthly Trust Board minutes as there is always interesting stuff in there. The July minutes show output from a recent meeting between the Trust and Paul Watson, where Watson states he’s in “regular contact with Jason Levien”.

Is that just discussion amongst colleagues, or evidence that nothing has really changed, the strings are still being pulled from across the pond? I’ll try to keep an open mind on that, but I remain sceptical. At the very least, it pretty much confirms Levien is still the key decision maker, despite some of the rumours doing the rounds.

For the sake of our club, let’s hope the new faces leads to positive change. There’s enough recent history to demonstrate it’s needed.