Odyssey and the Share Sale

After the Ownerships financial shenanigans in 2006, an opportunity to buy a share in Fulbourne, a historic working boat, was more attractive than otherwise it would have been. So with, at that time, ten weeks on Copperkins, the three weeks on Odyssey each years would be easier to move on from, despite the emotional attachment to the twelve entertaining and eventful years with the boat.


So it was a reluctant decision to offer her for sale. At first we did not give Ownerships the chance to sell our share, but later it seemed the sensible thing to do, given that a buyer would have to sign an Ownerships contract in order to join the group. As the buyback arrangements were primarily cashflow-generating mechanisms, rather than having the interest of owners at their heart. we had never wished to subscribe to these. It was therefore a matter of waiting until a buyer came along. Another share was successfully sold by Ownerships in 2007, so this was not a completely forlorn hope. Against that, Odyssey is unique, and the only seventyfoot boat in the fleet – so buyers either want it or they don't: it's not a matter of trading small differences between similar boats.


We also had the nastiness of the buybacks to contend with. As AllenM created them to help with his cashflow crisis in 2006, he had to discourage owners from using the facility they had just bought into- which he did by halving (or slightly less for newer boats) the insurance value, so making the shares he did have to buy very much cheaper, and having reduced their value, he could created a much cheaper market for them. This was not clearly advertised, but existed in never-to-be-repeated discounts, which was good for buyers of Ownerships shares, and therefor bad for sellers competing with the Ownerships buybacks. AllenM had effectively turned his private-boat scheme into a timeshare, where the only real share purchaser was Ownerships itself.


So we battled on in this biased marketplace through 2008, with a few enquiries outside of Ownerships, but NEVER ANY (never any in 2009 or 2010 either) from the share sale advert on the Ownerships' website. Then cane the Ownerships show in 2009, which we used a prebooked week to be there, and use Odyssey as a tripboat to give her maximum exposure to the buying public. I did the story in a board posting on 16Feb2008:


It's a cold and icy Sunday morning at The Show: I've just returned from bellringing and AnotherOwner is being a NotASalesman with ProspectivePurchaserNo1 as we prepare Odyssey to set off as one of two tripboats. Shorter trips to the Reservoir entrance today, instead of the Turn [because of the ice]. PPNo2 has also arrived and we set off towards the reservoir. Persuade PPNo1 to bring the shorter tiller, so I can more easily steer the boat while PPNo1 sits on the "recently re-upholstered red steering cushion lovingly shaped to the profile of the roof". All is going well ...

...until PPNo2 pops up to enquire if I knew about the smoke coming from the engine. ... I didn't. ... But I can remember the £vast,000 that the nice insurance man contributed to Odyssey's rebuilding after her 2005 engine fire. ... Engine Off. ... Hand tiller to PPNo1 suggesting that a controlled drift into the bridgehole would be good. ... Just the time to send a reassuring message to The Crew's walkie-talkie earphone. "Dunno what's going on, but no flames. How you doing?" ... ... (gap) ... "Sorry waddyousay? Earphone dropped out and trod on it..." _sigh_

Most of PPNo2 and PPNo1 family have by now returned to The Show on the towpath. We await the-coming-of-the-helpline who is hotfoot in the opposite direction: by the time-of-arrival, we have identified the ogre by way of a hot altenator and its partly-melted belt. So soon after Winter Maintenance, too. PPNo1 is enjoying the challenge, and provides the motive power (pulling the rope) to return Odyssey to The Show. [Snowy show pictures here]

We never saw PPNo2 again, but PPNo1 were enthused, and we sent them the the marquee to discuss terms with AllenM. And AllenM sold them HIS buy-back share, at a price which nobody chose to disclose to us – but which was with AllenM's additional incentive that if they didn't like the boat after using it for a season, AllenM would buy-back the share AGAIN at the end of the calendar year 2009 at the same price they had paid for it. Well, it's just not a level playing field, and some acrimonious conversations by email ensued. Paul and his family are wonderful people and fitted into the boat excellently. We met a number of times, and boated together on Fulbourne during the year. Faced with AllenM's offer, we too would have bought his share, but it was hardly fair on his existing customers, and I suppose it was never intended to be.


So it was with mixed emotion that we received the news that Paul was leaving at the end of 2009, taking AllenM's re-buy-back offer and moving to a privately-managed ex-Challenger boat: so Allen had the same share to sell again, and the 2010 show was approaching...


An an advert appeared in Waterways World. And it made me more angry at Allen than ever had I been before: a messageboard posting covering the events of 2009 ensued:


Selling Owners' shares at Ownerships' Show

Before the [2009] show, we were not aware of your “special BUY-and-TRY offer”; those who discussed its detail with you said that it was available on shares owned by Ownerships, but not on shares which you are selling on behalf of your existing customers. With this offer, I cannot see why a sane prospective owner would wish to buy my share rather than yours. Letter to Allen 28February 2009

The "Buy and Try" offer was, indeed, new for the show, and was a one-off experiment. And yes, I held a similar perspective to yours in thinking that prospective owners would be "insane" not to take us up on it, and so owners using the brokerage service in the normal way might well feel disadvantaged. AND we are living through exceptional times at the moment (current financial climate) and I was seriously worried about the cost of maintaining a "core" of bought back shares for another year. ... The Buy and Try offer was therefore a one-off attempt to try to restore normality to the scheme. Allen's reply of 4 March 2009 (my emphasis)

The "BUY and TRY" facility - exclusive to the Ownerships Show - You can buy a share in one of a selection of narrow boats at the 2010 show, use it all year, and then ask OwnerShips to buy it back again at the beginning of 2011 if you prefer.Waterways World January 2010 edition page 13.
_sigh_


which attracted an Allen reply


Whilst the opinions we both offered, above, seem pretty sensible and reasonable in the context in which they were said, it may be of benefit now to look at the realities in retrospect.

The 2009 Annual OwnerShips Show generated a total of 33 share sales, out of which 5 took advantage of the "Try and Buy" facility we offered - by way of a "carrot" (i.e. 15%). Or, in other words, 85% of total share sales were not of the "Try and Buy" variety.

Now, the benefit of dangling a "carrot" is that it increases the overall numbers attending, and if we imagine that 1 in X attendees go on to buy someone's share, then the more attendees we can get, the better it is for those someones.

In fact, looking at the 2009 show, despite the appalling weather conditions during the week leading up to event (no less than two heavy snowfalls in the midlands area) we managed to attract a record attendance. (We don't do a formal head count, but our catering sales were up by almost 30% - which is a good clue).

And looking at your own situation about trying to sell your share of the 70ft trad "Odyssey", Peter, which we have discussed before, I know, the "numbers game" is even more important. In other words, because it is apparent that only a small proportion of prospective share owners consider a 70ft trad boat, compared, say, with a 58ft semi-trad, the more visitors we can get to the show who then view Odyssey, the better it is for you - and, indeed, for all other owners too.

And then from me

As you say, we have both made the points mentioned so far in our private correspondence.

I remain a passionate advocate of the shared-boating scheme we joined in 1992. You brought together hopefully-compatible groups of aspiring owners who were keen to take on the advantages and responsibilities of owning their own boat. It was a six-year commitment at the end of which those-who-wished-to-continue needed to put together a new consortium for the next six years (often the same as the existing one): but any owner who wished to leave had an unassailable right to the return of their investment, either from a new owner in the new consortium, or from the sale of the boat. And the essential point was that once the group was set up, Ownerships never owned any of the boat.

And you, both personally and as the Ownerships' decision-maker, were a passionate advocate of customer service: this was at a level above and beyond what I had any right to expect as a customer. I remember saying just that at our 1995 general meeting when you were being attacked by the disaffected on the subject of Ownerships' finances.

The current business-model of owners taking ownership of their boat's shares only for the time between buying them from you and selling them back to you, is so far removed from the model we joined, that we both need to head our separate ways. It produces the fundamental conflict of interest between you as owner of (previously-owned) shares selling them to new customers, and you as broker and agent selling my share.

Your 15%-carrot-takeup is all very fine: all I know is that at the 2009 Show, 100% of my prospective new Odyssey owners made their way from me to you, bought your 'unmissable' buy-and-try share, and at the end of the year unbought it in favour of an ex-Challenger share, to the advantage of neither of us. Offering incentives on your shares, but not on mine, just makes your conflict of interests worse, to my (your existing customer's) disadvantage.

I ask only that your "one-off experiment" (your words) remains just that, and that in 2010 you treat all the shares-for-sale equally and fairly on their individual merits.

And later on the implications of AllenM having the same share to sell again:


First option is to offer it to existing Odyssey owners at a discount. Hmmmm. The email doesn’t mention my share as an alternative, nor does it offer to fund a discount on it. But then there’s that fundamental conflict of interest between Allen as timeshare-like share-seller and Allen as broker of my share: it’s obvious which role takes priority.

Anyway, to other Odyssey owners, my share being for sale wouldn’t be a surprise, and none of them have needed a second share, so no damage done. …. Except that we do have a new owner who has just bought a special share, and another email arrives to say they have now bought this Allen-share in addition to the special one they already had. _fume_ But the sale is ‘in progress’. Maybe just time to fire off an email saying I’ll sell for ten percent less than whatever bargain-basement price Allen has now come up with. Desperation I suppose. But maybe it was lost in the ether as no reply ever emerged. _sigh_


Allen again:


I'm sure I'm not alone in appreciating your many and varied postings on this forum. I'm only sorry that I seem to be the target of the odd slingshot that gets included. I hope you will know that it is not my intention to upset OwnerShips customers - yourself included.

If I can therefore give you a brief answer to this posting:-

The main cause of your discomfort seems to be summed up in your words: "Allen as timeshare-like share-seller and Allen as broker of my share: it’s obvious which role takes priority."

I am not aware of any owner in the scheme who has been directed towards one share in preference to another. We simply don't operate like that (and I am surprised to read that I am a timeshare-like salesman!). What we do at shows and at any other time is simply to offer prospective customers the details of what is available for sale. If they have expressed a particular interest in a particular boat, they are offered the details of ALL shares for sale on that boat. It is they, not us, who make choices.

And after offering shares, that OwnerShips has just "bought back", to existing owners at a discount (for potentially mutual benefit) we then put each one back on the market at the current market price in order not to compete with individual owners who are selling their own shares, and we thereby remove any conflict of interest.

And yes, we are able to do things like the "Buy and Try" scheme at our annual show, which an individual owner would not be practically able to, but as I mentioned earlier in this thread, I see it as little more than a "carrot" that ultimately benefits everyone (and was taken up last year by only 15% of buyers - the other 85% buying shares in the normal way).

I hope that 2010 brings us all happiness and, more particularly, happy boating!


A poignant conclusion, of course; written by Allen on New Year's day 2010, in reply to mine of Christmas day. Allen died in February having contributed only to one more thread after this conversation. Knowing of his illness I didn't continue with the correspondence.


CONCLUSIONS