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Football club asks fans to help with funding

IT is a way of getting a business or creative project off the ground that has boomed in popularity since banks began to tighten their purse strings in the wake of the financial crisis.

A FACE IN THE CROWD: East Fife has encouraged fans to take part in so-called crowdfunding, in which people invest in the club in return for benefits such as tickets.
A FACE IN THE CROWD: East Fife has encouraged fans to take part in so-called crowdfunding, in which people invest in the club in return for benefits such as tickets.

And now a football club has become the first in Scotland to turn to crowdfunding as a way to raise the money it needs to improve its stadium facilities and offer a better matchday experience.

Methil team East Fife, who play in League One at Bayview Stadium, aims to raise £100,000 from fans and members of the community in exchange for 'packages' of tickets to games, kits, hospitality days and club merchandise with the innovative financing model.

Crowdfunding has blossomed in recent years as a way of bypassing traditional investment sources to appeal directly to fans or people who would be interested in what is being developed.

It has been used to fund a wide range of projects from computer games to books, short films, plays and even fitness studios, and works by offering those who wish to put up cash the chance to do so in exchange for a reward.

Despite their lowly league position, East Fife are among Scotland's oldest clubs and can boast of being the first to win the league cup three times. They once gave a trial to Sir Sean Connery, before he took up acting, and had former First Minister Henry McLeish on their books.

Numerous websites, such as Kickstarter in the US and BloomVC in Scotland offer crowdfunding services, taking a 5% fee.

The method has been used by two lower league clubs south of the Border, Darlington and Kettering Town, to stave off bankruptcy.

Under the East Fife scheme, fans and members of the community will be asked to invest in one or more of the three individual development projects.

In return they will receive one ordinary share in the club and benefits including season tickets, hospitality packages with access to players and the directors' box and club merchandise.

The scheme is managed by Squareknot, a Glasgow-based crowdfunding company. The group hopes successful implementation at East Fife will prompt other UK clubs to adopt it.

Investment targets will be set for the three projects agreed between the club's management and fans' representative. Raising £25,000 will see the club shop built, £50,000 will ensure development of the bar/café while £100,000 will result in all three facilities completed.

Lee Murray, a local businessman who took over chairmanship of the club last June, said: "The club is operating within a tightly controlled financial budget, and does not utilise any bank overdraft or loan facilities.

"Although the club is operating within its financial means, there is little scope within the budget for capital spend on stadium enhancements and the directors do not believe that incurring significant levels of debt to fund capital projects is the correct approach for the club to take. The model of crowdfunding offered by Squareknot allows us to improve the quality of our facilities and the fan's experience without exposing the club to unnecessary risk."

Derek Bond, managing director of Squareknot, commented: "This is a novel approach to football finance which gives clubs and fans the best of both worlds, first class facilities and financial stability."

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