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Background to DHST
Dulwich Hamlet Supporters’ Trust (DHST) was founded in 2002 as an independent, democratic, not for profit organisation. Its aim was to secure a successful and sustainable future for Dulwich Hamlet Football Club by increasing supporter involvement in its running. When the Trust was formed, its primary objective was to raise money which would be invested in the Club for the benefit of supporters. This would help acquire a significant shareholding and enable the Trust to have an influence, on behalf of supporters, in the way the Club was run. Since 2014, when Champion Hill was sold to Hadley Property Group, the Trust’s objectives evolved to seek full fan ownership of the Club and be a leading example of a financially sustainable football club with a secure home in East Dulwich. Our membership now stands at around 570 members, which represents just over third of our average home attendance.
DHST provides significant financial and non-financial support to the Club. Financial support includes player and match day sponsorship, payments for advertising at the ground and in the match day programme, organising fundraising events such as the Christmas party in December (which raised £2,000 for the 12th man scheme), and sharing the profits from merchandise sales (30% of which goes back to the Club with some of this money going towards maintaining the Club’s online video channel DHFC-TV).
Non-financial support includes co-ordinating match day volunteers, promoting the Club, and lobbying in support of its interests.
DHST Governance
DHST is a Community Benefit Society governed by a set of Rules which can be found
here. The Rules form DHST’s constitution and sets out the objects (purposes) DHST seeks to achieve.
DHST’s objects, set out in Rule 2, are:
(i) To strengthen the bonds between the Club and the community which it serves and to represent the interests of the community in the running of the Club;
(ii) To benefit present and future members of the community served by the Club by promoting encouraging and furthering the game of football as a recreational facility, sporting activity and focus for community involvement;
(iii) To further the development of the game of football nationally and internationally and the upholding of its rules;
(iv) To encourage the Club to take proper account of the interests of its supporters and of the community it serves in its decisions;
(v) To encourage and promote the principle of supporter representation on the board of any company owning or controlling the Club and ultimately to be the vehicle for democratic elections to the board;
(vi) To promote, develop and respect the rights of members of the community served by the Club and people dealing with [DHST] as set out in the Charter of Fundamental Rights of the European Union, having regard in particular to the need to provide information to members and conduct the affairs of [DHST] in accessible and appropriate ways;
(vii) To allow the supporters of the Club and members of the local community to contribute to the health and success of the Club;
(viii) To ensure a sustainable and affordable ground for the Club to occupy within the vicinity of the community it serves.
The DHST board is under an obligation to act in the way it considers is most likely to achieve these objects. It also has other legal obligations, including an obligation to act with reasonable care, skill and diligence.
All funds available to the Trust, which have built up over many years, are set aside for the Trust to deliver on its objects and maintain ongoing cash flow for the merchandise operations in the Mega Container (shop). Rule 6 requires DHST’s profits to be applied, in accordance with the constitution:
· to maintain prudent reserves
· on expenditure to achieve the Society's objects
It should be noted that 100 Club funds are governed by a separate set of rules to those of Trust funds. Rules governing the 100 Club can be found
here.
DHST Objectives
DHST’s constitutional objects underpin a series of shorter term goals and targets – the objectives – which we use to measure performance, and review every two years.
The current objectives are set out in full
here but in summary:
1. DHFC has a secure long-term home in East Dulwich
2. DHFC is fully owned by its supporters
3. DHFC is a transparent and well-run Football Club
4. DHFC has a growing Supporters’ Trust that communicates regularly with its members
5. DHFC has strong links with all fans and the surrounding community
Securing a home in East Dulwich is at risk due to the fact that Meadow Residential is unlikely to grant a new licence to play at Champion Hill beyond the end of the 2017/18 season or possibly earlier.
To date, the Supporters’ Trust has not acquired any significant stake in the ownership of DHFC Ltd (the entity that owns the Football Club). The Trust is not in a position to do so at this time due to a legal agreement held by Meadow Residential over the majority shareholding.
Advice from Supporters Direct
DHST has spoken to Supporters Direct (SD) - an independent body that provides support and advice to Supporters’ Trusts - and below is a summary of their guidance for your information.
1. In view of the present uncertainty about the Football Club’s finances and the very real risk of insolvency, SD strongly advise against using DHST reserves to prop up Dulwich Hamlet Football Club Limited (the entity which owns the 'Football Club') without being clear that the Club is sustainable, is not throwing good money after bad, and without there being any long-term benefit to supporters.
2. For the same reason, SD cautioned strongly about DHST getting too involved in current decision making and running of the club at present due to risk of being seen as a 'shadow director' and exposing DHST to liability claims.
3. At present, SD's view is that the likely outcome will fall into one of 4 scenarios:
(a) DHFC Ltd becomes (or is) unsustainable and cost cutting is undertaken to make it sustainable (e.g. cutting the player budget).
(b) DHST negotiates with Meadow Residential and DHFC Ltd to achieve a consensual transition of DHFC Ltd to the ownership of DHST and costs are cut to enable the Club to be run sustainably.
(c) DHFC Ltd enters insolvency proceedings and DHST starts a Phoenix club.
(d) Someone rescues DHFC Ltd – a White Knight scenario.
Whilst option (c) is clearly the option we are all trying to avoid, and option (d) is the most appealing short-term solution for the club, nothing concrete has materialised to date.
Over the course of the last 3 months, since Meadow Residential withdrew funding assistance to the Club, DHFC Ltd has relied on gate takings, sponsorship and donations alone to pay the Club bills. To date the Club has managed to meet these obligations but there is a strong likelihood that this may not be the case for much longer unless any of the existing funding streams increase or the overall situation changes and a new owner is found.
DHST Funds
DHST has three main sources of income. They are:
1. Membership subscriptions
2. Profits from merchandise sales (70% of which are retained by the Trust, the remaining 30% given to the Club)
3. 100 Club
The total funds held by DHST as of 27 February 2018 is £75,761.86 (comprising 100 Club funds of £34,554.42 and Trust funds of £41,207.44)
DHST has always intended for the 100 Club money to be used in consultation with the 100 Club contributors. Ultimately the Supporters’ Trust Board have the final say, however, contributors would be invited to express their views (and the Trust Board would listen).
Therefore, any initial requests from the Club to the Trust will be made against the Trust Funds. If the request for funds extends to the 100 Club ‘pot’, then the Trust will consult further with the current 100 Club contributors.
The total amount of Trust Funds may be sufficient to enable DHFC Ltd to continue to operate until the end of the season (assuming no unexpected, additional costs are identified).
However, it is important to highlight some longer-term considerations.
· The Club is very unlikely to be playing at Champion Hill beyond the end of the season, possibly before if Meadow Residential chooses to evict the Club early. Therefore, revenue from gate takings may reduce.
· Debts against DHFC Ltd are significant and reported at circa. £750,000. The majority is believed to be owed to Meadow Residential or its subsidiary companies. Terms of these debts are unknown and represent a risk to short term funding.
· Meadow Residential have issued a back-dated rent invoice for circa. £121,000.
· If the debts are called in, it is likely the Club would be forced out of business.
· We understand DHFC Ltd has an outstanding VAT bill of circa. £30,000.
· Other four-figure bills have been identified in recent weeks and months – there could be more.
· We have the second highest average attendance across step 3 in the English pyramid. If promoted although this average would keep us in the top 10 average attendances for step 2, our rivals would be more competitive and would be spending more on players than our competitors in step 3 are now.
