Newport County want new investment deal agreed by September

The Exiles, who have been owned by a Supporters Trust since 2015, posted a loss of £1.2million for the year ending June, 2022 with accounts revealing liabilities of £393,634.

With the League Two club operating with structural losses of around £300,000 a year, the board have made it clear that a change of ownership model is required.

Former director Colin Everett has been tasked with dealing with potential investors, who would become a majority shareholder with at least 51 per cent of shares, to explain what the club needs and establish their credibility.

There are some leading contenders – and two have been asked by the club if they would be open to joining forces – but nothing is on the table yet.

County are aiming to thrash out a deal and sign a heads of terms agreement by the end of the month.

That would enable a special general meeting of the Trust to be held in September when 75 per cent of shareholders would have to give the green light.

“We are moving quite fast,” said Everett at a meeting for fans. “The couple of lead potential investors, we are looking to firm something up around the end of this month.

“It is moving that quickly because there is an urgency to what we need.”

Rodney Parade, home of Newport County (Image: Huw Evans Agency)

JOINING FORCES

County have signed non-disclosure agreements with interested parties because of commercial sensitivities.

Some have been deemed not to be suitable but there are two leading candidates that could join forces; they are open-minded to that idea but talks continue with them on an individual basis.

“We have one at an advanced stage,” said Everitt. “What we mean by that is we have met them, they are credible, have all the information they need about the club for the financial diligence.

“Over the last 48 hours one of the other potential investors has begun to come through, a little bit behind if it was a two-horse race.

“They both understand the urgency that we really need to be at a stage of heads of terms by the end of August, which is quite an ask.

“They way that we are trying to pitch it to those two is whether there might be a way that they could work together.

“They fully understand, warts and all, where we are and there has been nothing hidden from them. We have made it clear that we need to grow the club as well, there is no point in just dealing with creditors and filling the budget gap.

“Our overall playing budget is in the very lowest group of League Two and we need more than that.

“We need to build background infrastructure at the club – commercial, marketing, chief executive. We have a very light infrastructure behind the scenes.

“We need to invest on and off the pitch to be a competitive League Two club and the people we are talking to get that.”

WHAT OWNERS WOULD GET

County are in a perilous financial position, play at a ground currently owned by the Welsh Rugby Union (soon to be owned by the Dragons) and train at Council-owned Spytty Park.

That does have a positive in that the Exiles have not attracted interest from those who could turn out to be asset-strippers.

“They would be buying a League Two franchise and a club with potential, in our view,” said Everett.

“We’ve got no stadium of our own and the only assets that we have got are very small, including players under contract.

“It’s not an easy sell. We have not been bowled over by interest, partly because we are not an asset-rich club. We would only put something forward if they are credible.

"One other thing to thrown into the mix is that the investment required from for this club is much lower than some of the investments made at other clubs.

"I appreciate there are no assets but for some of these investors they are quite affordable amounts and if they can get us to that even keel then they then have the financial capacity to invest in growth. We are not asking somebody to put in £3million or £4m up front."

County supporters at the public meeting at Rodney Parade (Image: Newsquest)

THE TRUST

If County succeed in getting fresh investment then it will mean that the Trust, who currently have 79 per cent of shares, would no longer be entitled to a say in the running of the club.

This is where the term hybrid model comes into it – new owners would be keen to maintain the relationship with the Trust so that they could help with the structural losses.

“Potential investors still expect the Trust to punch its weight financially and put in each year,” said Everett.

“It’s likely that they would still want [a relationship with] us but in return they would want a financial contribution and are likely to want an increase on the £100,000 that is currently raised a year.”

The Trust currently has 1,105 members while a fans-led players fund to boost Graham Coughlan’s transfer budget has raised £20,000.

However, the board believe the ownership structure must change if County to avoid slipping out of the Football League and sliding down the pyramid.

“There is no point in talking about things without realism. We believe the club can thrive and prosper but we are not in a great place financially at the moment, everybody knows that,” said Everett.

“We need to talk realistically about what we can do to survive this season and then grow the club again.

“We believe it was the right thing to do to buy the club out in 2015 but the Trust model isn’t going to work at this level of football anymore, in our view.

“There are League One, League Two, National League clubs with much, much bigger budgets than us and that’s because they have a financial reach we haven’t got.

“It’s great being democratically owned but the only people we’ve got to draw in money is us and that’s not going to generate £2 or 3million.

“For us, the Trust model as it was has probably had its time but it can still have a role working with a potential owner.”

Everett said that if the hunt for a new investor didn’t come off then the Trust would need to raise twice as much as it did 2015 to buy the club just to meet the financial demands of the year.

“We would have to be raising something in the region of £500,000 or so to help clear the creditors,” he said, with the Dragons the primary creditor.

However, County are hopeful of having a proposal to put in front of supporters before the autumn.