Fan Ownership

Darlington FC has been fan owned since 2012. DFCSG owns a controlling stake in the Football Club and sets its strategic direction in line with the interests of the DFCSG membership. In other words, DFCSG members are the Owners of DFC. At this time, there are just over 1,300 members of DFCSG with c90% voting rights. But what does that mean in practice? This section of YOURCLUB sets out to explain fan ownership and what that means for Darlington Football Club in greater detail.

1. When we refer to fan or community ownership, what do we mean by that?

The Football Supporters Association’s strict definition is that fan/community ownership requires a minimum of 50% + 1 of the voting rights of the club to be controlled collectively by a democratic entity which has an open and inclusive membership based on one member, one vote with no substantial barriers to participation as a voting member.

This '50+1' ownership rule applies to all clubs in the Bundesliga and football is popular in Germany with top-quality play, the highest average attendances in world football, low ticket prices and a great fan culture.

2. What does 'community ownership' mean in practice?

It means that the voting members get to choose who runs their football club. All members are eligible to put themselves forward for election to be one of those that can directly influence the running of their club.

It does not mean that as members you get to decide, for example, who the Team Manager should be or which players the manager should sign or move on. At the end of the day, professional football clubs are commercial organisations in competition with each other and therefore much of the information that is commonly accepted as commercially sensitive, such as transfer fees and details of players’ contracts etc, would remain confidential whether or not a club is 'community owned'.

3. Are there any wider benefits of 'community ownership'?

Any profits are reinvested back into the club as opposed to being distributed to shareholders. The club is committed to running as a sustainable business.

A club owned by its community has the potential to develop deeper longer-term partnerships, particularly local authorities who historically favour this model, and can attract a different type of investment and utilise a different type of finance.

Community-owned clubs offer greater protection and transparency within their constitution, which appeals to partners, funders, and sponsors. Giving people the chance to own a club can increase their connection with it, so people share the responsibility of sustaining 'their' club, unlocking more volunteers and participation. If supporters know that the money they spend will be reinvested in the club, they are more likely to spend or donate more.

4. How widespread is 'community ownership' in the ranks of professional football within the UK?

In English football, the highest-placed fan-owned clubs are Exeter City and newly promoted AFC Wimbledon in EFL1.

In addition to Darlington FC, in National League North/South, Chester FC, Hereford FC, Merthyr Town, Scarborough Athletic, Bath City and Tonbridge Angels are all fan-owned clubs.

North of the border, fan-ownership is strongly represented in the professional football leagues. In the Scottish Premiership, there are Hearts, St. Mirren and Motherwell. In the Championship there are Greenock Morton and Partick Thistle. In Scottish League 2, Clyde FC, Stirling Albion and newly relegated Annan Athletic complete the set of fan-owned clubs.

The FSA are continually being contacted by supporters' groups concerned about the current ownership and financial state of their clubs and the conversation very often develops into discussions about the potential for fan-ownership.

5. How does the governance of Darlington FC work?

Darlington Football Club is the trading name of 'Darlington 1883 Limited' – a private limited company registered at Companies House.

Darlington FC Supporters Group (DFCSG) is the trading name of Darlington 1883 Supporters Society Ltd., which is a Community Benefit Society regulated by the FCA.

Approximately 90% of the voting rights of Darlington FC are owned by DFCSG. The remaining 10% of the voting rights are owned by individual shareholders (maximum individual stake is <5% of the total voting rights). Consequently, DFCSG has a controlling interest in Darlington FC. Therefore, Darlington FC is a subsidiary of DFCSG.

At the DFCSG AGM, members (Owners) elect a new DFCSG Board. Also, in advance of the Darlington FC AGM, the DFCSG Board will seek a mandate from members on which way the DFCSG Board should vote at the Darlington FC AGM eg re-election of Darlington FC Directors. This will be done by way of an online poll.

Darlington FC Board currently has five Directors (the Articles of Association make provision for a maximum of six Directors), one of which is DFCSG as 'Corporate Director', who is normally represented by the DFCSG Chair. The DFCSG representative has a voice in the collective decisions made by the Darlington FC Board and is therefore integral to the day-to-day running of the Football Club.

In addition to DFCSG having a seat on the Darlington FC Board, the Club's Articles of Association require that the Darlington FC Board should seek advice from the DFCSG Board on various matters (eg, the appointment of new Directors, the prudence of budgets and financial plans, etc).

There is a 'Memorandum of Understanding' between Darlington FC and DFCSG that sets down in detail the various matters on which the Darlington FC Board should seek advice from the DFCSG Board. Depending on the significance of these matters, the DFCSG Board may seek the views/endorsement from members (eg, plans to move to a new ground).

Darlington FC's Articles of Association allows the Darlington FC Board to co-opt new Directors between AGM's (subject to consultation with the DFCSG Board). However, they will be subject to re-election at the next Darlington FC AGM and therefore will be subject to endorsement of DFCSG Members at their preceding AGM.

As Darlington FC and DFCSG are two separate legal entities, the DFCSG Board accepts that their representative on the Darlington FC Board will from time-to-time become party to confidential matters that can't be disclosed to the DFCSG Board, for example players' remunerations or transfer fees (where confidentiality is a condition of the transfer) or the identities of unsuccessful candidates for roles within the football club.

6. What is the significance of DFCSG having a controlling interest in Darlington FC?

With voting rights in excess of 90%, DFCSG has the ability to propose and pass 'Special Resolutions' at Darlington FC AGMs. 'Special Resolutions' are resolutions that require a majority of at least 75% (eg, modifications to Darlington FC's 'Articles of Association').

7. What is DFCSG’s response to any calls for DFC to be proactively seeking external investment?

The Darlington FC Board Directors are appointed to operate the Club within the confines of it’s Articles of Association. These Articles do not provide the Board with any mandate to directly seek external investment. Such a mandate could only be provided by the Club’s shareholders, of which DFCSG has the controlling interest.

The DFCSG Board Directors are elected to run DFCSG within the confines of the Objects set down in our constitution. With reference to specific Objects:

4.2 achieving the greatest possible supporter and community influence in the running and ownership of the Club; and

4.4 operating democratically, fairly, sustainably, transparently and with financial responsibility and utilising its acquired interest in the Club and responsibilities defined in the Club’s Articles to encourage the Club to do the same;

Consequently, the DFCSG Board would be unable to provide the DFC Board with a mandate to directly seek external investment without contravening our Objects 4.2 and 4.4.

Nevertheless, should DFC receive an unsolicited significant and credible offer of external investment, the Club would be obliged to refer the proposal to the Club’s owners ie DFCSG.

To date, DFSCG has not received any offers of investment. In the event of such an offer, DFCSG would consider the value of the proposed investment against any measures that may be necessary to safeguard owners’ interests for example by bolstering DFC’s Articles and limiting the proportion of equity to be released to an investor. The proposal would then put it to the membership for their consideration.

In the absence of an investment proposal, it would be premature for DFCSG to hypothesise the necessary safeguards.

8. In what ways can DFCSG members influence the direction of their Football Club?

Put themselves forward for election to the DFCSG Board;
Vote for Board candidates that they consider would best represent their views;
Get involved as a volunteer to gain a better insight of how the Club functions;
Use the 'Contact' facility on YOURCLUB or visit the 'Fans Table' in the clubhouse at any home match to chat with a DFCSG Board member to promote their ideas/suggestions and/or raise concerns;
Respond to any consultations/polls promoted by the DFCSG Board

9. How far can Darlington FC progress under Fan Ownership?

Without a crystal ball, who knows? The circumstances surrounding each fan-owned club do vary, but for the best example of progression of a fan-owned club from very humble beginnings, look no further than AFC Wimbledon.

The club was founded in 2002 by former supporters of Wimbledon FC after the FA allowed that club to relocate to Milton Keynes. Most of the Wimbledon supporters were very strongly opposed to moving the club so far away, so consequently, members of the Wimbledon Independent Supporters' Association agreed at a meeting on 30 May 2002 to start the club again from scratch and to create a new community-based club named AFC Wimbledon under the ownership of the 'Dons Trust'.

AFC Wimbledon entered a ground–sharing arrangement with Kingstonian to play home fixtures there and were duly admitted to the Premier Division of the Combined Counties League (Step 5) in August 2002 and subsequently acquired 'Kingsmeadow' in 2003 after Kingstonian got into financial difficulties.

AFC Wimbledon steadily moved up through the Non-League pyramid and were promoted to EFL 2 via the play-offs in 2011.

In 2015, AFC Wimbledon agreed plans to sell Kingsmeadow to Chelsea in order to help finance their plans to move to a new stadium on the site of the defunct Wimbledon Greyhound Stadium, only 250 yards away from the original Plough Lane, Wimbledon's home until 1991. Chelsea's intention was to use the ground for their own youth and women's teams, resulting in Kingstonian having to groundshare with Leatherhead and latterly Corinthian-Casuals.

In November 2020, the AFC Wimbledon moved to their brand new 9,000 capacity Plough Lane stadium (see above photograph).

AFC Wimbledon’s story demonstrates that fan-owned clubs can progress sustainably, given the right circumstances and patience!

You can read more about becoming an Owner of Darlington FC, and sign up, by clicking here.