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After sorry saga of infighting, moment of truth arrives for Coventry City
In the high court on Friday Coventry could be put into administration, which would result in a 10-point deduction and the end of the team's promotion dream
Coventry moved to the Ricoh Arena in 2005 but unpaid rent on the stadium of £1.3m has led to a high court hearing. Photograph: Tony Marshall/Empics Sport
"Coventry was alive when the team paraded through the city after we won the FA Cup and Coventry was alive today," said the former Sky Blues defender Kirk Stephens in 2007, after the official opening of the Ricoh Arena. "I arranged for a meeting of 60 former Coventry City players last week and saw two 70-year-old men cry because they are so pleased with the changes they've seen."
Those comments came a year after Coventry had been playing in their new home, but one wonders what Stephens thinks now, six years on, with City due to appear at the high court on Friday when a judge will decide whether to place the club into administration, resulting in the deduction of 10 points and an end to the team's hopes of promotion from League One this season. A penny also for the thoughts of Steven Pressley, the manager appointed only two weeks ago who has guided his new side to two wins from three and within grasp of a play-off spot.
For those unfamiliar with City's plight, it is a sorry tale that is sure to depress any football fan who believes the game has lost touch with reality. This sepulchral saga has been driven to the brink of implosion by two parties that have endured a bitter relationship over the past six years. Inevitably, something has had to give.
Coventry city council and the Higgs Trust both hold a 50% stake in Arena Coventry Ltd, the company that owns the Ricoh Arena. ACL have been at odds with the club's owners since 2007, when the Mayfair-based hedge-fund Sisu, run by the American-Scandinavian Joy Seppala, took control of Coventry with the help of Ray Ranson. The outgoing chairman, Joe Elliott, said at the time: "I am sure that Ray Ranson and Sisu Capital will help drive Coventry City forward into a brand new era for the club."
It has certainly been a new era, but perhaps not the one that Elliott would have expected.
Previous mismanagement meant the club was forced into renting the stadium instead of owning it, despite Sisu's attempts since to purchase a stake in ACL, with the stadium owners last week issuing an administration order to the high court over £1.3m in unpaid rent since April last year. ACL, which issued third party debt orders against the club in February having previously issued a statutory demand, offered to reduce that annual rent to £400,000. The club agreed to that offer but a row over who would retain matchday revenue at the stadium led to a breakdown in negotiations and a stand-off.
The club's chief executive, Tim Fisher, told the Guardian last week that unless the negotiations recommenced there would be "no option" but to file for administration. "The only thing I will say at this stage is that ACL and the council have got their own purpose and their own agenda for putting us into administration," Fisher said on Wednesday. It remains to be seen how Sisu responds to the administration order in court, although it could still pay the £1.3m before a hearing and potentially avoid a doomsday scenario. It could also make its own representations in court and an adjournment is another possibility
.
James Powell, a partner for Walker Morris, who will represent ACL, said: "Based on experience, the business and assets of the club are more valuable if there is certainty to what has happened with the points, that's why if unfortunately there was to be a deduction we would prefer that to happen this season so that a potential purchaser has the certainty of knowing it's happened.
"I think you've got to look at the facts the best you can. Action had to be taken because the danger of going into liquidation was so high that we had to act. The Guardian's article of Monday last week was supportive of the decision to go down this route. The opposition's interest may be to fight but is that in the best interest of the club?"
Preston Haskell, a potential new owner, has been lined up by ACL for a future takeover should the club enter administration and Brendan Guilfoyle is ACL's choice to be the administrator. Haskell, an American property tycoon who was interested in a deal with Leeds United last year, has reportedly been shown around the Ricoh Arena by ACL's interim chief executive, Jacky Isaac, and has an estimated worth of $250m (£157m).
Fisher and club director Mark Labovitch, told the Guardian last week that they did not expect a wealthy backer to come in for the club and that alternative arrangements for playing away from the Ricoh Arena were already in place. They had been in lengthy discussions with the Football League about building a new stadium nearer to Coventry's city centre and in the meantime planned to ground-share with a League club in the west Midlands.
"The council seem to be quite naively hopeful that there is a Russian oligarch or a sheikh waiting to take over," Labovitch said. "I think that's unrealistic. I do a lot of work in the Gulf and know a lot of the sheikhs who are interested in football quite well, they want trophies. They don't talk to another Gulf royal and say 'I've bought Coventry City'.
"I was staggered when they first mentioned building a new stadium but when you look at the way we are denied revenues that we used to have at Highfield Road, that were given away and had nothing return, it is strange that the economics of building a new stadium actually stack up. It is ridiculous and wasteful because what would happen to the Ricoh Arena is that weeds would come up through the cracks in the concrete and it would become a white elephant."
Fisher said: "What I've found, whether I'm in Tesco car park holding two bags of shopping on a Friday night or walking around in the city centre on a Thursday morning, is supporters stopping you and saying 'just pay the rent, Tim, just pay it and we can all move on'. Then, when I unravel the argument in front of them, they then say 'for god's sake, you've got to get the right deal for the club, we've got to think long-term, Tim'."
The question of which side is in the right has been much debated by frustrated supporters, who have seen their team slide deeper into a gaping abyss since relegation from the Premier League in 2001, after 34 years in the top flight.
Jan Mokrzycki, spokesman for the Sky Blues Supporters Trust, believes the club had to move from their old stadium. He said: "People say 'we should never have moved', but we had to move. Highfield Road needed so much money spending on it, there was no room to expand because it was surrounded by housing and it only held 20,000 people. Looking back on it that's all we need now but had we stayed in the Premiership or Championship we would have been at capacity sometimes. The reasons for moving at the time were extremely valid." He continued: The whole thing has got so stupid, it's now no longer about contracts, finance or anything else – it's just personal."
Stephens may argue that, at Coventry City, that used to be a good thing.
In the high court on Friday Coventry could be put into administration, which would result in a 10-point deduction and the end of the team's promotion dream
Email- James Riach
- The Guardian, Wednesday 20 March 2013 20.10 GMT
- Jump to comments (0)
"Coventry was alive when the team paraded through the city after we won the FA Cup and Coventry was alive today," said the former Sky Blues defender Kirk Stephens in 2007, after the official opening of the Ricoh Arena. "I arranged for a meeting of 60 former Coventry City players last week and saw two 70-year-old men cry because they are so pleased with the changes they've seen."
Those comments came a year after Coventry had been playing in their new home, but one wonders what Stephens thinks now, six years on, with City due to appear at the high court on Friday when a judge will decide whether to place the club into administration, resulting in the deduction of 10 points and an end to the team's hopes of promotion from League One this season. A penny also for the thoughts of Steven Pressley, the manager appointed only two weeks ago who has guided his new side to two wins from three and within grasp of a play-off spot.
For those unfamiliar with City's plight, it is a sorry tale that is sure to depress any football fan who believes the game has lost touch with reality. This sepulchral saga has been driven to the brink of implosion by two parties that have endured a bitter relationship over the past six years. Inevitably, something has had to give.
Coventry city council and the Higgs Trust both hold a 50% stake in Arena Coventry Ltd, the company that owns the Ricoh Arena. ACL have been at odds with the club's owners since 2007, when the Mayfair-based hedge-fund Sisu, run by the American-Scandinavian Joy Seppala, took control of Coventry with the help of Ray Ranson. The outgoing chairman, Joe Elliott, said at the time: "I am sure that Ray Ranson and Sisu Capital will help drive Coventry City forward into a brand new era for the club."
It has certainly been a new era, but perhaps not the one that Elliott would have expected.
Previous mismanagement meant the club was forced into renting the stadium instead of owning it, despite Sisu's attempts since to purchase a stake in ACL, with the stadium owners last week issuing an administration order to the high court over £1.3m in unpaid rent since April last year. ACL, which issued third party debt orders against the club in February having previously issued a statutory demand, offered to reduce that annual rent to £400,000. The club agreed to that offer but a row over who would retain matchday revenue at the stadium led to a breakdown in negotiations and a stand-off.
The club's chief executive, Tim Fisher, told the Guardian last week that unless the negotiations recommenced there would be "no option" but to file for administration. "The only thing I will say at this stage is that ACL and the council have got their own purpose and their own agenda for putting us into administration," Fisher said on Wednesday. It remains to be seen how Sisu responds to the administration order in court, although it could still pay the £1.3m before a hearing and potentially avoid a doomsday scenario. It could also make its own representations in court and an adjournment is another possibility
.
James Powell, a partner for Walker Morris, who will represent ACL, said: "Based on experience, the business and assets of the club are more valuable if there is certainty to what has happened with the points, that's why if unfortunately there was to be a deduction we would prefer that to happen this season so that a potential purchaser has the certainty of knowing it's happened.
"I think you've got to look at the facts the best you can. Action had to be taken because the danger of going into liquidation was so high that we had to act. The Guardian's article of Monday last week was supportive of the decision to go down this route. The opposition's interest may be to fight but is that in the best interest of the club?"
Preston Haskell, a potential new owner, has been lined up by ACL for a future takeover should the club enter administration and Brendan Guilfoyle is ACL's choice to be the administrator. Haskell, an American property tycoon who was interested in a deal with Leeds United last year, has reportedly been shown around the Ricoh Arena by ACL's interim chief executive, Jacky Isaac, and has an estimated worth of $250m (£157m).
Fisher and club director Mark Labovitch, told the Guardian last week that they did not expect a wealthy backer to come in for the club and that alternative arrangements for playing away from the Ricoh Arena were already in place. They had been in lengthy discussions with the Football League about building a new stadium nearer to Coventry's city centre and in the meantime planned to ground-share with a League club in the west Midlands.
"The council seem to be quite naively hopeful that there is a Russian oligarch or a sheikh waiting to take over," Labovitch said. "I think that's unrealistic. I do a lot of work in the Gulf and know a lot of the sheikhs who are interested in football quite well, they want trophies. They don't talk to another Gulf royal and say 'I've bought Coventry City'.
"I was staggered when they first mentioned building a new stadium but when you look at the way we are denied revenues that we used to have at Highfield Road, that were given away and had nothing return, it is strange that the economics of building a new stadium actually stack up. It is ridiculous and wasteful because what would happen to the Ricoh Arena is that weeds would come up through the cracks in the concrete and it would become a white elephant."
Fisher said: "What I've found, whether I'm in Tesco car park holding two bags of shopping on a Friday night or walking around in the city centre on a Thursday morning, is supporters stopping you and saying 'just pay the rent, Tim, just pay it and we can all move on'. Then, when I unravel the argument in front of them, they then say 'for god's sake, you've got to get the right deal for the club, we've got to think long-term, Tim'."
The question of which side is in the right has been much debated by frustrated supporters, who have seen their team slide deeper into a gaping abyss since relegation from the Premier League in 2001, after 34 years in the top flight.
Jan Mokrzycki, spokesman for the Sky Blues Supporters Trust, believes the club had to move from their old stadium. He said: "People say 'we should never have moved', but we had to move. Highfield Road needed so much money spending on it, there was no room to expand because it was surrounded by housing and it only held 20,000 people. Looking back on it that's all we need now but had we stayed in the Premiership or Championship we would have been at capacity sometimes. The reasons for moving at the time were extremely valid." He continued: The whole thing has got so stupid, it's now no longer about contracts, finance or anything else – it's just personal."
Stephens may argue that, at Coventry City, that used to be a good thing.
