A recent development concerning a football club offers important lessons on setting out terms and conditions.
"This is all about people with a dream of owning a football club. To turn football on its head and take it back to the people … Do you have what it takes to run a real football club? To manage a budget of up to £8.5million? To be a part of making football history?”
Does this sound too good to be true?
Earlier this year, OWNAFC released an app which promised football fans a shareholding in a non-league football club which would be chosen and bought by them. They were offered the chance to be directly involved in the club’s decisions, including signing players and firing and hiring staff members – all they had to do, was pay a one-off fee of £49!
By February, more than 2,500 had signed up to the mobile app in the hope that they would be able to own a football club and vote in its decisions. Through the app, fans voted that they would take over a club in the Midlands rather than in the North West, and were even in discussions to takeover Hednesford Town FC earlier this month.
However, at the last minute, Hednesford Town got cold feet and decided not to go ahead with the takeover. Supporters Direct released a statement regarding the proposed takeover which reminisced on the ultimately unsustainable takeover of Ebbsfleet United by MyFootballClub in 2008. It compared OWNAFC to MyFootballClub and predicted a similar result for any club that agrees to such a takeover experiment.
Since then, prospects for OWNAFC (and those of its founder and sole director, Mr Stuart Harvey) have gone downhill very quickly and it has faced a lot of criticism from its invested customers.
Customers have said that they thought paying £49 meant that they would actually own a share in the acquired football club and some are now demanding refunds. Since the unsuccessful takeover of Hednesford Town, however, OWNAFC have said that the £49 was in fact only to access the app. It has said that the shares would be on offer once a club had been bought.
OWNAFC’s brochure states that “each OWNA will be able to buy 1 share if they choose to, at the nominal share value (subject to age restrictions)”. Customers have claimed that this only became clear after they had paid £49. Clearly, there has been a lot of confusion over the exact nature of the product being bought. Apparently, prior to a successful takeover, customers have bought no more than a licence to use the mobile app! By comparison the MyFootballClub model (which did lead to an initially successful takeover of Ebbsfleet) began initially by seeking expressions of interest and did not take money from participants until the proposals were much clearer.
Customers claim that Mr Harvey also changed the terms and conditions on the website without consultation, removing the reference to refunds for customers who became OWNAs before 6 January should no offer be made to a club before or on 1 March.
The terms and conditions now state: “The price once paid is final and no refunds are offered or given for any reason other than if a takeover is not completed within 3 months of a club accepting our offer. If no offer is made to a football club by 01/06/2019 then refunds will be offered.” (https://ownafc.com/)
One Twitter user compares OWNAFC to “the Fyre Festival of football club ownership”. After the unsuccessful takeover, OWNAs were sent a message via the app informing them that no updates would be made until 12 March, that all emails would be deleted and that the business had ceased trading and would be up for sale. Shockingly, users then received a message last week stating that business would be continuing as normal!
After complaints to OWNAFC about poor communication and a lack of transparency have been largely ignored (in some scenarios, customers have been blocked on OWNAFC’s social media groups), unhappy customers have been applying for refunds through their banks. Watchdog Action Fraud has also confirmed that it has received reports relating to OWNAFC and that it has informed the National Intelligence bureau who will, as part of the process, contact the relevant police force.
OWNAFC’s legal adviser has admitted that it accepts the business needed to be more open with its customers but denies that OWNAFC has done any wrongdoing or has committed any fraud. Attempts to reassure those involved include appointing a non-executive advisory board to OWNAFC and as part of this, Mr Harvey would be stepping aside from the business.
Will these reassurances be enough? Such a PR catastrophe may lead to an emerging mistrust and lack of credibility in the business, which could be fatal. It is clear that both from a legal and commercial viewpoint it is imperative to be clear and upfront with any terms of business.
Brabners’ Sports team and commercial lawyers can provide expert advice on any such start up business to ensure that similar problems are not encountered. We can advise on advertising standards and online selling laws to avoid liability under consumer law, and can also assist with any alternative or fan ownership of football clubs.
