Here is the address that was given by the Chairman of the Swansea City Supporters’ Trust, Phil Sumbler at the Members Forum that was held at the Liberty Stadium this evening.



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Good evening and thank you for attending this fans forum hosted by the Swansea City Supporters’ Trust.

Firstly, may I take the opportunity to thank you for your continued support of the Trust and for renewing your membership for the current season. May I also apologise to you all for a lack of communication from the Trust over the last couple of months with regard to the takeover of the club and our role going forward, however this has been due to the nature of the negotiations and discussions which have been taking place. As you will come to see, it is a silence which will be broken tonight as we outline a full history of our discussions, along with the Trust’s position now and also moving forward. Hopefully by the end of the meeting you will understand why events have proceeded as they have.

I am sure that, as I walk you through the events of recent months, you will have questions, but can I ask that you save these for the end. At that point you will hopefully understand fully everything that has happened, including the actions taken by us as a Trust board.

During this address, I will take you through an account of the events of that time and it is important for you to remember three things that are absolutely key:

1. We were, and remain, the second largest individual shareholder within our football club;

2. We were, and remain, the only shareholder whose sole motivation is the long term security of our football club for future generations;

3. Our preferred position has always been, and remains, to try and retain a stake in the club, and we have always wished to work with our shareholder partners to achieve this.

At this point it is worth noting that the Trust has always been represented in any discussions by a member, or members, of the Supporters Trust board and its advisors. Those include myself as the Trust chair; Jim White as Vice Chair; Huw Cooze as our Supporter Director; Stuart McDonald as Treasurer; Andy Godden who works very closely with Stuart understanding our, and the club’s, finances; Richard Major, who is a partner at Price Waterhouse Cooper and has extensive experience in investigating complex financial deals and finally, our legal representative David Little, who I am pleased to say is with us this evening.

Of course, this is not the first time we have stood here to discuss a takeover of the football club. We were here in February 2015 to discuss a potential deal, however that failed to come to fruition. As you all know, this time a majority stake has been sold to a consortium led by Jason Levien and Steve Kaplan.

From our perspective, this deal is no different to the last in that it has been for a sale of the shares of the football club and not, as reported in the media, an investment into Swansea City football club. As I did last year I must stress that there is a massive difference between a sale of shares and investment – when shares are sold, the money goes to the selling shareholders, not the football club. This is not to say that there will not be an investment into the club at some point in the future, however we can state that we are not aware of any investment to date.

Of course there are two main differences between the events of 2015 and now. Firstly, in 2015 we were properly engaged in the deal. We could perform our own due diligence of the buyers, we could meet with them to discuss their plans and both sides could see whether we could work together or whether a deal could be reached to the benefit of all parties. The big difference this time is that the Supporters Trust had been deliberately excluded from discussions due to the collusion in particular of the selling shareholders. By the time we found out about this deal, negotiations were extremely advanced and thus we were excluded from any discussions regarding any sale of our stake.

You may ask why we were kept out of the loop, and some may question whether we actually were. For the latter I can only reconfirm that is the case, a fact publicly acknowledged by Huw Jenkins at the London Fans Forum last May, and I can also state that Huw Jenkins confirmed to me that discussions were taking place as far back as Summer 2015. The justification we have received from the buyers and sellers for the former is effectively that “The Trust were not selling and we wanted to keep it quiet”. You can, of course, draw your own conclusions as to why the buyers and sellers would want to keep the Trust out of the loop.

I will say that at NO point has the Trust ever said that we will never, under any circumstances, sell our stake in the football club. It is fair to say that it is not our preferred option and goes against one of the stated aims of the Supporters Trust, which is to maintain a stake in the football club. It is also true to say that we recommended that we should not sell to Moores and Noell last year. However, all deals need to be judged on their individual merits.

We knew, from the moment of the initial American interest, that existing shareholders were looking to sell their stakes, so it was not a surprise to know that there could be a potential sale. From a Trust perspective, the fact that the sellers were looking to sell is not the main issue … once heads had been turned by the potential windfall available to the shareholders, it is probably for the best that changes were made in the ownership of the football club. Our issue is that the deal had progressed so far behind our backs.

We were first made aware of the intentions towards the end of March when myself, Huw Cooze and Stuart McDonald met with Huw Jenkins and Leigh Dineen at the Liberty Stadium. A few days later, Huw Jenkins then provided a copy of the draft term sheet. This was our first sight of any detail and it was at this point that we fully realised just how far discussions had gone.

We met with Jason Levien on the morning of the clash with Chelsea last April and myself, Huw, David Little and Richard Major were present at that meeting. This was our first chance to understand what Jason’s thoughts were for the football club, and whilst talks were not detailed or conclusive, the meeting was not negative. At this time we could only take Jason Levien’s words that “I want to work with the Trust” at face value.

We moved from that meeting to one with Martin Morgan and Brian Katzen, who informed the Trust that there was also interest from some Chinese businessmen who wanted to investigate the possibility of investing in the football club as part of a wider investment in the City of Swansea. This deal stalled largely due to a lack of interest from the other shareholders, who were seemingly more interested in selling their shares than investment in the football club, to the point that they refused to even meet them.

I think most of us are aware of what happened next but that very evening, the news of the takeover broke in the press. This was as surprising as it was disappointing, as nothing had been mentioned in our earlier meetings that this story was to break. It is worth noting here that the seller blamed the buyer for the leak, and the buyer blamed the seller. Either way, regardless of how the deal was spun as positive for the football club, it was not really an indication of either party wanting to work closely with us.

Whilst we met during April with the existing shareholders to ascertain their position, the key to us at this point was of course the buyers and in early May, Dai Little and Jason Levien were in touch to arrange a meeting which took place in London on 16th May, with both Dai and Richard Major representing our interests. At this meeting Dai outlined our position around our ideal option being to retain our stake and influence at the football club, however in order to achieve that then key protections would need to be granted to ensure both parties could work together. Again, discussions were positive, however no agreement was reached. At this time, it was agreed that it was now time for our respective legal teams to start working together.

The discussion was progressed slightly on 7th June, when we received an email from Jason providing us with the details regarding the proposed share purchase, and a call was set up with a company called Sheridans, who were acting on behalf of the buyers in completing the deal. It is fair to say that we only received this information after prompting from Dai Little, who requested full disclosure of the deal.

In the interim period between the first announcement (April) and this point (June) we took time to point out to all shareholders that the Trust could be better protected by them. I am not sure how many people are aware here but Mel Nurse, a complete Swansea legend, sold his 5% stake back to the football club in 2011 for a price agreed directly between him and the club, however it was for a fraction of the price offered by the Americans. That deal increased everyone’s shareholdings (ours for example went from 20% to 21.1%) and we pointed out that if that increase was donated to the Trust, taking our stake up to 25%, then their legacy of protecting the football club would be complete. I am disappointed to say, the response was not even to decline the offer, it was complete silence.

Here I would ask you to remember that this is not the first attempt we have made to obtain or purchase additional shares in order to obtain a 25%+ stake. Unfortunately, each time we have been clearly told (or even not told as the case may be) that the answer was a resounding “No”. We can only assume the reason is that it would devalue the monetary value of the other shares, and that the selling price was more important to them than the ongoing security of Swansea City FC.

As time progressed and speculation increased that completion of the takeover was imminent we became more frustrated at the lack of full engagement and publicly said so. This drew a reaction from Jason Levien and sped up some key actions, such as outlining what was important to us in a draft term sheet sent on 18th July. This draft term sheet suggested many things but some of the key points include:

Protection of the Trust’s stake in the football club and, if that cannot be achieved, a path to agreeing a sale of all or part of the Trust’s stake;

Veto rights over decisions that could affect the long-term security of the football club (e.g. excessive debt, issuing new shares);

The right to appoint a second director to the board of the football club to better protect the interest of our members;

Removal of any directors whose shareholding was below 5%;

No dividends to be issued without consent;

At this point, Jason indicated to us that a complete non-dilution provision was unlikely. Therefore it was necessary to look at how we could best seek to protect the long term interests of the Trust. Our options here were to:

a) agree that any new shares would be issued at a discount due to our unique position of needing to raise funds through the fans;

b) sell part of our stake to hedge against future share issues;

c) sell our entire stake and retain any money as security against any future financial problems for the football club.

This process also highlighted something else that was a concern to us, and that was that the selling shareholders had warranted to the buyers that the Shareholders Agreement that had bound us since 2002 was not valid.

Given that we have copies of correspondence and board meeting minutes going back over the last 14 years that confirms the sellers repeatedly acknowledged and stated this agreement was binding, this was something we were shocked by. We stated our view to Jason Levien as well as advising of our own legal advice from last year that stated that the document was indeed a valid one. As I stand here today we still firmly believe, and have updated advice from legal counsel, that this document is valid and therefore the actions of the sellers to warrant otherwise was wrong. Unfortunately both buyers and sellers elected to knowingly proceed in breach of this agreement.

On the 19th July the Supporters Trust were then approached by Chris Farnell, a solicitor acting for Huw Jenkins and other selling parties, asking the Trust to sign a waiver stating that the original Shareholders Agreement was not, and had never been, valid. This document, which was sent with the full awareness of Huw Jenkins as a signatory, also came with the offer that, if signed, the Supporters Trust would be afforded 2 director positions on the club board – one full directorship and the other with observer status. This offer was rejected and the document remains unsigned on our part. It also demonstrates that, even though the sellers warranted that there was no existing shareholder agreement, the sellers were more than aware of its existence, otherwise why would they seek to invalidate it?

We met twice with Jason Levien when he was in Swansea to conclude the deal for the football club around the 21st July, and we subsequently arranged a call for the 25th to discuss further. Just 10 minutes before this call, Chris Farnell sent us a document agreed between the buyers and the other remaining shareholders detailing a new Shareholders Agreement. Needless to say, this was the first we were aware of this new document, we have not and will not sign it, and we continue to operate under the terms of the original Shareholders Agreement.

It was at this time that the reality of what the selling shareholders and buyers had agreed became fully clear. Whilst some previous shareholders retained a small stake in the football club, they had largely signed over their voting rights to the buyers. That meant that the buyers had control of over 75% of the voting rights of the football club. Along with the collusion and deception, it was particularly disappointing to see the levels to which our former business partners had stooped.

The lack of communication was further demonstrated as we were alerted on 4th August to the filing at Companies House of a new Articles of Association of the football club. These were filed without reference to us, or agreement with us. Also around this time, two senior members of the club’s management staff were dismissed without notice and certainly appear to have been treated badly as an indication to how things are not working in the way to which we had become accustomed.

As it became clear that our influence at the football club was being reduced, we indicated, via a separate call attended by Sam Porter (one of the advisers to Jason Levien), that we would wish to see what a share sale would look like, as the protection of our position was becoming increasingly difficult thanks to the actions outlined.

On 12th August, we received an email from Sam advising that (and I quote) “open to accommodating the Trust’s request and are willing to entertain purchasing up to one-half of the Trust’s ownership shares on terms that are fair and reasonable. The funds received by the Trust from the sale would provide the Trust ample flexibility to participate in a future share offering. With its remaining ownership interest, the Trust would then keep the same rights that the other minority shareholders thoroughly negotiated”.

These rights are the ones detailed in the document provided ten minutes before the conference call. This was a document drawn up for the benefit of minority shareholders who were looking to retain a very small stake in the football club, and who would not retain a meaningful influence in the future direction of the football club through their shareholding. Whilst, as a 21% shareholder, we are classed as a minority shareholding, our rights and desires do not match those who chose to sell larger chunks of their shareholding for personal profit.

It is worth noting at this time that, while we have discussed options with the buyers, at every stage of the discussions we have made it known to all parties that any decisions we take are not made by me or the Trust board, but by the people we are accountable to and that is our members. While the Trust may discuss terms with the buyers, we could only ever present those to the Members for consideration. It would be a decision for the members if the Trust was ever to sell any or all of its stake in the football club.

As the season got underway, Huw Cooze and I met with Jason and Steve Kaplan ahead of the Hull fixture. This discussion served to further emphasise how far apart the new owners and the Supporters Trust were in terms of our negotiating positions, with the only agreement being in terms of there being no plans to issue new shares until 31st May 2017.

Unfortunately, short term protection without any form of long term protection is not something we could work with and, whilst both Jason and Steve were keen to point out that it was not their intention to issue new shares or seek to weaken the Trust’s financial position, there was no agreement on how we could progress going forward. When this is coupled with the complete lack of communication regarding the new shareholders agreement and the new Articles of Association, then this was the point at which discussions ceased as we looked to consult further with our legal counsel.

We have now completed our initial discussions with our legal counsel. This is the same barrister we consulted with on the initial American interest in 2014 , and who is an experienced barrister with over 20 years’ experience in matters such as contractual disputes and possible Unfair Prejudice actions. We asked him to confirm (amongst other things):

Whether we had any claim for unfair prejudice due to actions taken by buyers and sellers;

Whether the 2002 shareholders agreement was valid;

Whether we can argue that new articles being passed without notification/agreement to us makes them invalid;

What actions the Trust should take;

Following an email response and a follow up meeting held last week, we can draw the following conclusions:

It is clear that the buyers and particularly the sellers colluded against the Supporters Trust in the way that we were excluded from all negotiations, and that our interests have been prejudiced against. Whether this would enable the Trust to launch a successful formal legal action for Unfair Prejudice, thereby compelling the Buyer to buy out the Trust shareholding, is not clear so we are seeking further guidance from our Barrister.

The 2002 Shareholders Agreement is valid and the sellers should not have warranted otherwise. The actions of the selling shareholders amounts to a clear breach of contract. We have asked out Barrister to assess what claims we have against the Sellers as a result.

While the passing of the new Articles of Association without our consent does not invalidate them, the failure to comply with notice provisions means that the directors are guilty of a criminal offence. We have asked our Barrister to advise on whether there is any merit in the Trust seeking to take action, either in the name of the Trust or in the name of the football club, to see what remedies are available to the Trust and what action may be taken against the Directors and by whom – how would we go about informing the authorities and what sanctions could the directors face?

As you can see, our legal options are still being assessed and we will obtain the best guidance we can to ensure the Trust members’ best interests are maintained. Whilst we have sought an initial opinion from counsel, we have not yet made any firm decisions in terms of the next steps to be taken.

As we have outlined previously, our first preference has always revolved around protecting our shareholding and influence at the football club, however as you can tell from this address we are significantly apart on these matters. We have sought guidance from Supporters Direct throughout, a relationship strengthened by our legal representative Dai Little recently being elected to the Supporters Direct board, and their firm recommendation is exactly the same as our first preference.

We are also conscious that any legal action would create uncertainty, not just in terms of its success, but also our relationship with the new owner and destabilising the football club. This remains a last resort, however we also have a duty to our members and the best long-term interests of our fans. In all cases, if it is the recommendation of our legal advisors that legal action is to be taken, this would require the full approval of the Trust Members via a forum or ballot due to the potential impacts and costs involved.

If the gap between the Supporters Trust and the buyers cannot be closed then we will have no option but to pursue other options. We could push harder for the sale of the shares to Jason and Steve, or even pursue other avenues of sale. We will continue to assess these options. However, as legal counsel confirmed previously, we should note that the Supporters Trust is limited in terms of what it can do with any funds it receives due to Government legislation that governs our organisation.

Regardless of our options, the guidance does bring into sharp focus the actions of the sellers who have acted purely from a position of self-interest with little regard for the future of the football club, the Supporters Trust or the fans. It also reflects badly on the buyers, whose words to date of wanting to work with the Supporters Trust have been backed up with precious little action.

We remain disappointed at how we have been completely bypassed by the remaining shareholders in decisions regarding the future of this football club. What we have outlined above relates more specifically to the sale of the football club, however it is much deeper than that. There has been a much wider disconnect between the Club and Supporters Trust under the new ownership.

The feedback from our Supporters Director is that the level of engagement, on all matters, is significantly lower than at any time over the last 14 years, and that is something that is unacceptable to us. It is imperative to us that the Supporters Trust is fully engaged in all major decisions regarding the football club and in particular those areas that are important to our members and the fans in general.

For instance, take the recent disgraceful way in which the club conducted itself regarding the change of manager, another decision made without consultation, and we obviously wish Francesco Guidolin all the best for the future.

Notwithstanding the nature of Francesco’s departure, we wholeheartedly wish Bob Bradley every success as manager of Swansea City Football club and we look forward to working with him and of course wish him and the squad the very best of fortune in his first home game this weekend against Watford.

The actions of people who purchased shares in this club at varying points from 2002 onwards have placed us in a very difficult position, and I hope you can see we have looked at every avenue in finding a way through the situation. However, I have to say that the interests of the supporters of our football club have been largely ignored by those sellers and that has unpicked very quickly the legacy of the good work we have undertaken over the last fourteen years. It is a shame that the legacy of Swansea City being “Not Just Another Football Club” has not been lived up to.

From that perspective, it has also been disappointing to read comments on social media by former directors of the football club, and also their continued attendance in the Directors Box on match days. It is the view of the Supporters Trust that it is unacceptable for former directors to continue to enjoy the benefits they once enjoyed before they cashed in their shares.

In terms of what happens next with regards to our relationship with the new majority owners and the football club, it is impossible to say. Due to logistical reasons and other pressing issues (i.e. the recent football management changes), discussions have been limited in recent weeks. However, Jason Levien has indicated to us that he will be attending the Watford game this weekend and we have requested to meet with him to discuss the situation. If there is a major change in the way the buyers have operated to date, then there still may be a path to working together for the long term interest of the football club. As custodians of a substantial stake in this football club, this remains our preferred outcome, so we urge the new majority owners to work with us, not without us.

I hope that you can now see that our silence has not been a result of us sitting on our hands and doing nothing. The amount of work that has gone into discussions, meetings and strategy calls, from what is a group of volunteers, has been incredible and whilst many have asked, particularly online, for us to play things out in public, that is never the way that such complex and often legal negotiations can take place. As a result we have suffered a lot of criticism which, while we may feel is unfair, is sometimes understandable when we cannot publicise information on the discussions to date. Hopefully this address will go some way to resolving these issues.

I am sorry I cannot be the bearer of better news and say that I have complete confidence in the future, however I thank you for attending this evening and taking the time to listen to what I have had to say.

I hope now that you appreciate we have tried to be as comprehensive as possible. Our position and actions are now out in the open and I would now invite any questions that you may have for myself, Dai, Huw or any of the Trust board.

Thank you.



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