Meanwhile At Coventry City....
What exactly has been taking place at Coventry City in recent weeks? And why has the mainstream media failed to provide adequate coverage? Today on the blog Ian King shares his thoughts on what may prove to be one of the greatest ownership scandals in recent memory.
The reaction to the Tahiti national football team's endeavours in this summer's Confederations Cup has demonstrated, amongst other things, what an arid summer this has been for football supporters. Charming though it is to see a team such as this pitting its wits against some of the best in the world and doing so for the apparent love of doing it, there has been a hint of urgency about the love that has been bestowed upon them, a shot of methadone before the full season starts again in a few weeks' time.
More than most years, this has been a quiet summer. This feeling of dislocation has been accentuated by the end of last season, which, in the Premier League at least, was hardly the firecracker that the advertisers and marketers might have wanted. In addition to this, the transfer market has been static - so far - while the flurry of managerial changes that have come about came and went in such a short period of time that they already feel like old news.
A Scandalous Lack Of Coverage
Considering that there has been such a dearth of news over the last few weeks, it is surprising that comparatively little has been offered in the press regarding a story that may well one day come to be looked back upon as one of worst ownership scandals of the age. It has been a long time since the supporters of Coventry City Football Club had a great deal to celebrate. This, after all, is a club that has finished above halfway in whichever division it was playing in on just seven occasions in the last thirty-years, and has slipped quietly down from the Premier League into the lower divisions of the Football League since 2001 with barely a murmur. In 2005 the club left Highfield Road - its home since 1899 - for The Ricoh Arena, a 32,000 capacity stadium on the outskirts of the city, but this didn’t arrest the decline in the club's fortunes on the pitch, and in December 2007 Ray Ranson and the SISU hedge fund group successfully completed the takeover of the football club as it teetered on the brink of administration.
As the hedge fund cut costs left, right and centre, a minority of supporters became angry and started to protest, but even though - or perhaps because - the actions of security guards became increasingly heavy-handed during matches against protestors, the protests started to recede. Last season, however, they returned with a vengeance as the club's finances unravelled amid rumours of at best amoral business behaviour from the owners of the club started to become increasingly apparent. The Ricoh Arena is owned by a company called Arena Coventry Limited, which is part-owned by Coventry City Council and part-owned by a charity called the Alan Higgs Trust, but it has long been believed that the club was paying too much for the rent for the stadium, and a little over a year ago, SISU stopped paying it. This was portrayed by the hedge fund as being a crusade against an exorbitant figure, but others were suspicious, especially after ACL offered to drop the rental cost from £1.2m to an altogether more manageable £400,000 per year and offer revenue-sharing on concessions at the ground. It started to feel as if SISU didn't want to pay anything at all to use The Ricoh Arena.
By January of this year, ACL, starved of their primary source of income, were groaning under the weight of these unpaid rent bills, were on the brink of insolvency themselves, so Coventry City Council used its financial strength to arrange a remortgage which lowered the financial burden on the stricken club, but after a verbal agreement over a rent reduction was reported to have been agreed SISU back-tracked on the offer and continued with their intransigent attitude towards the company. In March, ACL started formal proceedings to recover the money that they were owed, but in March the club effectively placed itself into administration.
Or did it? SISU claimed that the company placed into administration, Coventry City Football Club Limited, only held certain liabilities - including, surprise, surprise, the lease agreement for The Ricoh Arena - while everything else the club owned was in the name of another company called Coventry City Football Club (Holdings) Limited. SISU argued that the club, which was hovering on the outskirts of the League One play-off race, shouldn't suffer any sanction because of this. The Football League disagreed. Each Football League club has one "Golden Share", which acts as its membership card to be a member of the Football League, but no-one seemed to know which company held that share. The Football League, applying the same logic as it did when Southampton attempted to write a football club's debts off without sanction by putting a holding company into administration, deducted the club ten points anyway.
Still, though, there were concerns to be had over what form the administration of Coventry City would take. The role of the administrator in the case of an insolvency event is clearly defined by law, but there have been plenty of concerns in recent years over the independence of administrators when they are appointed by a creditor. There were other groups that were interested in taking Coventry City on, but it came as no surprise when the preferred bidder was confirmed by the administrator as a company called Otium Entertainment Group Limited, who were, well, effectively SISU. Indeed, Coventry City CEO Tim Fisher is a director not only of Otium, but also both CCFC Limited and CCFC (Holdings) Ltd. The administrator, Paul Appleton, stated that Otium's bid was "substantially more than any of the other three bids received." Not surprising, argued sceptics, when they will be effectively paying themselves. Meanwhile, SISU have infuriated Coventry City supporters by confirming that the club will be leaving The Ricoh Arena to ground-share for a period claimed to be two or three years while they build a new stadium "in the Coventry area." Birmingham City's St Andrews, Walsall's Banks Arena and Nene Park, the former home of Rushden & Diamonds and Kettering Town, have all been suggested as possible venues for the club next season, but at the time of writing no-one knows where the club will be starting next season. With season tickets yet to go on sale and many supporters now stating that they will not travel substantial distances for home matches - Walsall, for example, is a sixty mile round trip from Coventry - quite where Coventry CIty go from here is, both literally and metaphorically, a moot point at present. Meanwhile, with no hint of illegality - the matter of amorality is a different question altogether - the Footall League has been left with little alternative but to give the buy-out from administration the green light.
A Familiar Tale Told Quietly
Yet whilst similar stories at other clubs - Portsmouth last season is a every good example - stole the headlines during the season, the mainstream press reaction to the goings-on at Coventry City has been muted, to say the least. This, however, is a club with a long and storied history. In the early 1960s, under the managership of Jimmy Hill, it ascended from the lower divisions to the First Division with a host of innovations, including changing the club's colours to their now-famous sky blue, arranging trains for supporters to away matches, pre-game and half-time entertainment and turning the match programmes into a magazine. The club went on to spend three and a half decades, often heavily against the odds, unbroken in the top division of English football, with its crowning glory coming in 1987 when it won the FA Cup final against Tottenham Hotspur at Wembley.
In 2013, though, the market rules and SISU, no matter how nefarious we may take them to be, are far from stupid. And this is what makes the club's current position so much different to other clubs that have found themselves in this sort of position in recent years. At other clubs in states of financial distress, there has been a perception - which, more often than not, has turned out to be true - that the owners simply aren't very good businessmen and that they don't know what they're doing. SISU, most suspect, do know what they're doing and it is this that makes them so worrying. It is also the reason why those with the access to a mass audience should be bringing this wretched story to their attention.
Coventry City supporters are protesting as loudly as they can, but precious few others seem to care about their plight.
The Odds: Coventry City are best priced with Ladbrokes at odds of 8.00 to win promotion to the Championship next season with Bet Victor offering odds of 3.00 for them to win their opening League One match of the season at Crawley Town on 3rd August.
Follow Ian on Twitter: @twoht
And read more of his work on his TwoHundredPercent.net
- Tag: Football