Only paid-up members will be allowed to vote on the change of status under rules set by the Registrar of Industrial and Provident Societies which require two meetings. The first meeting to be held on 11 September needs the approval of a 75 per cent majority of the members voting, to be followed within four weeks by a simple majority.
Members would be given five free shares but the club hopes to raise up to pounds 3m in the autumn to finance further increases in the capacity at its Welford Road ground, which is currently limited to just under 17,000, and to build up the professional playing staff. The terms of any capital- raising exercise have not yet been decided but members will be given preference if there is a public offer for sale, according to Peter Wheeler, the former England and British Lions player who is now Leicester's chief executive.
Several other top English clubs have already converted to limited companies, to allow leading backers to take controlling stakes, but if the Leicester plan is approved, the Tigers will be the first fully quoted independent rugby club. If only half the likely membership subscribed pounds 500 each they could meet the club's initial capital needs without ceding control to a single shareholder.
The Tigers need new capital to support a substantially increased wage bill and to buy players to support their stated ambition of establishing themselves as the top club side in Europe. The club's total revenue last year was around pounds 3.1m including season ticket sales, gate admissions, merchandising and sponsorship deals, while total expenditure was around pounds 3.4m, including a wage bill of pounds 1.5m for the playing staff.
The club has signed several top professionals who were out of contract elsewhere during the close season and now has a squad of 28 players including six British Lions, and an annual wage bill in excess of pounds 2m. All the leading rugby players were now under contract, Mr Wheeler said yesterday, and further signings would require the payment of transfer fees.
The plans include more executive boxes and conference, banqueting, sponsorship and merchandising facilities to generate income seven days a week all year round. Sponsors include Alliance & Leicester, Next and Tetley's and a major new sponsorship will be announced soon.