By Paul Nicholson
Published on Tuesday, 28 January 2014 12:06
January 28 – Darlington FC, one of England's oldest football clubs, is staging a financial comeback, allbeit on a small scale. The club has introduced a 'crowdfunding' initiative to raise an initial £50,000 with further targets of £150,000 as the next steps.
Nicknamed The Quakers, the club have had a torrid time, slipping out of the professional divisions, into the conference and subsequently into administration and the club being relegated four divisions to the Northern Premier League Division One on the recommendation of the Football Association.
The crowdfunding model has been organized by Glasgow-based investment firm Squareknot who are running a similar scheme at East Fife FC in Scotland and believe the model is applicable to a number of clubs. Already £26,000 has been raised from 16 investors.
Under the scheme fans and members of the community have been asked to invest by crowdfunding, direct investment or through the DFC Development Fund. Investors receive shares in the club along with a range of benefits including season tickets, hospitality packages and club merchandise.
The club has set an initial target of £50,000 to secure financial stability. Further targets of £100,000 and £150,000 have been set to meet running costs. 2.5% of cash received over £100,000 and 5% over £150,000, will be donated to a local hospice.
The club is currently playing in Bishop Auckland and money will be used to enable it to return to Darlington, most likely in a ground share with Darlington rugby club. The club was left groundless when in 2012 it was forced to leave the 27,000-capacity Darlington Arena which it had occupied since 2003.
The club was once owned by George Reynolds, a convicted safecracker turned successful businessman who had learned how to use explosives working in the coal mines in the north east. On one occasion he took to the pitch in a mock prison suit complete with arrows, with a ball and chain around his ankle. But Reynolds' ran out of cash having spent £30 million on the club.
The precipitous drop from the top fourth division of English football to the ninth tier was aggressively fast. But the club was renamed and reformed and is battling its way back.
Martin Jesper, chief executive of Darlington FC, said of the funding model: "It's a unique opportunity for fans to embrace fan ownership and make a huge difference to the future of their club and the wider community," he said.
"The funds raised are being put towards the specific goals that are outlined and therefore there is enormous transparency for the fans to understand how their money will be used within their club – ensuring that the Return to Darlington and progression through the leagues are built from a robust financial platform and managed in a controlled and affordable manner."
Derek Bond, managing director of Squareknot, said: "This is a novel approach to football finance which gives fans the opportunity to ensure the survival of their club while benefiting from a range of rewards."
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