Years ago

"Community-based" model?

Cairns and Wollongong have "community-based" ownership models- but what exactly does this mean?

Topic #28707 | Report this topic

Years ago

Essentially it means the club is run like a not for profit organisation with a Board of Directors voted in by club members - the board will set strategic direction, budgets etc. Under the Board sits - GM (Beecroft - Office Operations), Head Coach (Fearne - Basketball Operations) and subsequent staff dealing with community engagement, sales/marketing etc. Every year there is an AGM to vote in new Board positions, pass financial reports, vote on Agenda items etc. Only Club members with voting rights can vote.

The Taipans ownership model consists of a $5k shares or foundation memberships that became the seed capital of the club. You can either buy 1 or multiple $5k shares that represent a vote during the AGM. You can buy partial shares into a $5k foundation share and this is called a syndicate - people can invest $50 towards the $5k per foundation share (or membership) but there is only 1 vote for that syndicate.

This is in contrast to the GC where the Tomlinsons were the primary investors/owners with a CEO underneath them. Anyone can buy a membership into the Taipans/Hawks and get a say in its running.

Reply #369435 | Report this post

Years ago

Buying season tickets is not the same as buying a share or Foundation Membership to be a part owner of the club. I myself am a syndicate Foundation Member(owner) with a few friends

Reply #369436 | Report this post

Wildcat Fan  
Years ago

I think that's a great way to have a club run. Private ownership is always risky and there will always be clubs that fold because the owner wants out and no one else is willing to take over. Cairns are flourishing now under this model, and there looks like great potential at Wollongong too.

A community model should be the aim for most clubs, even the wealthy, like Perth. Jack Bendat is 80 years old, is there a succession plan in place for him when he leaves, or will the Cats be left without an owner I wonder?

The future is always uncertain as long as private ownership is around.

Reply #369474 | Report this post

Years ago

Where is the comparison to a not for profit organisation? Sporting teams aren't charities, they are trying to make a buck.

Reply #369475 | Report this post

Years ago

better to run it in a sustainable way than get sidetracked trying (and failing) to make a buck. i know which one id take any day of the week, and so do the fans.

Reply #369479 | Report this post

Years ago

@venom- thanks for the explanation. Is the 5k foundation membership a one off payment or does the person/syndicate pay that each season?

Reply #369564 | Report this post

Years ago

Good explanation venom. What happens when the organisation loses money? Can there be a call on shareholders? Lets say the Hawks had a horror year and lost 750k, how would that be made up?

Reply #369571 | Report this post

Years ago

Unfortunately HO I see that as the main problem we are facing at the moment with team ownership, whether it be community based or not.

Who stumps up more funds when problems happen?

In the Gold Coast case Im sure the Tomlinson family didnt set out to burn through however many millions of dollars over the last 5 years, but they have and for whatever reasons they cant keep throwing good money after bad. So now the money has dried up we find ourselves in the position we are now in.

If we had a community based model (a model I really like BTW) what would the difference be? What if the shareholders (lets assume there are 200 of them @5k each) cant/wont stump up another 5k each, what happens then? Who comes to the rescue?

Sure the easy answer is dont spend more than you earn, thats fine but surely that is every clubs plan, unfortunately it doesnt always work that way.

Credit really must go to Cairns in particular for running with such a lean business model and putting a very competative team on the floor. The community has really embraced the concept and the results are speaking for themselves.

I just wish the wider Gold Coast community would get off their collective asses and actually support their local teams rather than sit back taking pot shots when something goes wrong - and then whinging about the loss of a team when its way too late!

Reply #369584 | Report this post

Years ago

Thanks for the feedback guys.

1. $5k is a once off investment as the seed capital for the club. New $5k investments can be made any time which gets the new club member an extra vote at AGM and/or ability to run for a board position (ex-players and even the convention centre management company are club members)

2. ANY PROFITS MADE ARE NOT RETURNED TO Foundation Members or anyone else. They are retained by the club for next season and to support basketball/community development in the Taipans regional footprint, as well as select charities (not cash donations, but players/staff time, free advertising at games ie. Relay 4 Life, Breast Cancer Research, PCYC etc on game nights). Taipans last week went and conducted a clinic in Charleville for 2 days with the help of the main sponsor - Skytrans. The team also conducts the most community/school visits and clinics of any NBL club - 900+ last year through the Subway sponsored SYTYCP (So You Think You Can Play) program. It should also be noted that the player salary budget is the largest component of the budget and the club strictly follows board rules that player salaries must be covered by sponsorships (directly through the Spend to the Cap fund or indirectly through club sponsorhip) and ticket sales. Borrowing for a short term gain with players does not equal a long term proposition for club survival. This also minimises the risk of the club heading into deficit as this large expense is covered by relatively known revenue - the other side of the coin is that the club is limited on what extras it can have like staff (Cairns Basketball is integrated in with the Taipans so there is some staff sharing). Any extras are made up by donations from the community (free labour for the install of AC's, volunteers run the game night program selling, merchandising outsourced, volunteers help with marketing/season ticket packs etc), fund raising by supporter groups of extra marketing flags for example - the club doesn't pay out profit to anyone, thus why its a not for profit organisation Chewy. Going by your logic, Relay 4 Life (Cairns has the 3rd biggest R4L in the country) isn't not for profit because it makes money ? End of the day, if the club doesn't earn it, they don't spend it.

As Statman said, who coughs up the deficit if they make a loss ?

Having been to the last 3 Taipans AGM's, the board run a very tight ship when it comes to the budget, with forecasts of revenue being understated and expenses over stated to minimise the risk of actually making a loss. Cairns Regional Council are the $1mil guarantor so the board reports regularly to the council regarding budgets and operating positions - the council has the power to intervene if it looks like the club is over spending etc to prevent the need for the $1mil needing to be used and ratepayers get lumped with the bill. The club would take action to drop expenses/increase revenues immediately. This independent auditing by the CRC ensures the club is operating viably and can be closed down if it is going to burn money it doesn't have (ie. eats into the Foundation membership capital money as the operating revenue isn't covering the costs). Unlike the Blaze owners who kept on burning money unfortunately thinking they could buy their way to success. Blaze fans just remember, Taipans went through this 3 years ago when our private owner did the same thing and tried to buy success, Denise D. stood up and led a community ownership model that also was used to save the Hawks - Hawks made the GF that 1st year of community ownership, Taipans the 2nd year (injuries killed the 3rd year....) so there is no reason why the GC community or anybody can't do it. The Crocs are also looking to follow this path as have their WNBL team already moved to a community model.

Private owners have been great for sport around the world, but when they fail they fail spectacularly and the fans and players (especially) suffer. Community ownership doesn't work for everyone and has its drawbacks - but its about long term viability and shared responsibility.

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