Plus ça Change: The High Court Damning Of Coventry City
When the verdict was delivered at the High Court in London earlier this week, it couldn’t have been done so in a more emphatic manner. Contrary to the many public statements on behalf of the club over the last few months or so, Mr Justice Hickinbottom ruled that Coventry City Council had not acted “irrationally” in refinancing a loan taken out by the owners of the Ricoh Arena, ACL, at the start of last year, and that this loan didn’t, as the club had previously claimed, breach European State Aid law. These verdicts, however, were not the only bad news to come from the summary of this hearing. The full verdict provided a damning indictment of what the judge perceived as the motives of those that have been running the myriad of companies that have become in the wellbeing – or otherwise – of this football club, a fact that remains hanging in the air despite the club’s predictably bullish response to the judgement.
Justice Hickinbotham could scarcely have been less equivocal in the judgement that he handed down. He found that, as many supporters of the club had come to believe over the preceding year or so, that the witholding of rent payable to ACL under the terms of the club’s lease to use the Ricoh Arena was a deliberate strategy aimed at financially stressing the company with a view to buying a significant share-holding in it at a considerably reduced price. By 2012, the Judge found, “Sisu had no strategy for maintaining a sustainable football club, except one which involved the purchase, at a knockdown price, of at least a 50% share in ACL and thus the Arena.” Contrary to this behaviour, the Judge found that the Council had made decisions that were “well within the ambit extended to public authorities,” and that, “The council was entitled to consider the longer term, as a private investor would.”
The club stopped paying the rent at the Ricoh Arena in 2012, following a financially ruinous three years during which the owners of the club sought desperately to return the club to the Premier League status, but which ended with relegation to League One and with home crowds having fallen substantially. With £100,000 per month being withheld from ACL, the local council refinanced the mortgage held over the stadium for £14.4m in January of 2013, and the club moved out of the Arena without prior warning at the end of that season, subsequently moving to play – with the surprsing blessing of the Football League – to Northampton Town’s Sixfields last summer. Although hit by a points deduction which came about as a result of the club being placed into administration only for new owners to come in which looked suspiciously to many like those that had been running the club beforehand, manager Steven Pressley managed to keep the team’s head above water on the pitch last season, hanging on to a mid-table position and even occasionally flirting with a place in the play-offs before tailing off at the end of the season to finish the season in eighteenth place in the table, just four points above the relegation places.
With the club now exiled thirty-five miles from home crowds plummeted to less than 2,000 people for some matches, but the Football League’s supine reaction to the behaviour of the owners of the club was widely criticised, whilst the findings of Justice Hickinbotham last week seem to have only further strengthened the argument of those who were critical of them. The Football League had issued the club a ‘Golden Share’ – essentially a locence to be one of its members – in return for the club accepting a tenpoint deduction for last season and agreeing a ‘membership agreement’ which included agreeing to the payment of a £1million bond as a signal of intent to return to Coventry, as well as paying ACL the £590,000 it would have received had a proposed CVA – which was rejected by both ACL and HMRC – been agreed. This amount, at the time of writing, remains unpaid, even though the dealine for this amount to be has now passed. The club, somewhat predictably, disputes this amount, claiming that an amount of £300,000 recently paid to ACL by two former directors of the club should be deducted from this amount.
The Football League’s statement on last week’s judgement was as unfocussed as we might expect. Its opportunity to act decisively on this matter has long passed, so it is perhaps unsurprising that, while those hoping for it to act in a way which actively forces the movement of the club back to its home city might take some succour from comments expressing “deep regret” over the way that things have worked out at the club, its conclusion that, “The Football League will now continue working with the Administrator and Otium to achieve an exit from Administration in line with the Board’s Insolvency Policy” can only be interpreted as even more of the wishy-washy middle-management speak that effectively facilitated so many of the events of the last twelve months. It had its opportunity to act over this matter, and it dropped the ball and there seems little scope for them to be able to set this straight, now.
Somewhat extraordinarily – although not particularly surprisingly for those with any knowledge of their previous chutzpah in this respect – the club’s reaction to the judgement was to state that it believed that the judge had got the judgement wrong, with Chief Executive Tim Fisher – a man widely charged by the club’s supporters as being one of the main architects behind its recent fall from grace – making the somewhat extraordinary claim that: “Given the evidence and submissions we were very surprised by the judgment. We believe it is wrong in law and in fact. I have no doubt that this will be heard in the Court of Appeal in front of three very senior judges.” Fisher also confirmed that the club’s “Plan A” is now to buil a new stadium, but this is a course of action that the club has been claiming for a considerable amount time with precious little evidence that this is happening having been forthcoming other than the release of some artist’s drawings at the start of the year. The ultimate, overarching question of why the club would ever need to build a new stadium when there is a perfectly serviceable one available to use in Coventry that could be used were there nany apparent will on the part of the club to do so remains unanswered.
In July 2013, Fisher told a meeting the club’s London Supporters Club that, “Sisu is a distressed debt fund and therefore batters people in court.” These are words that must surely have come back to haunt him and those otherwise involved in the appalling way in which this football club has been treated of late, this week. The motives of those running Coventry City Football Club have been laid bare in the starkest possible terms, with little room for ambiguity. It has certainly giving the impression of trying to maintain this facade over the last twelve months, with the pursuit of its court cases against Coventry City Council having been as relentless as they turned out to be fruitless, and legal threats having been made against the Guardian newspaper – over this article written by David Conn in December of last year – and the Sky Blues Trust, but there can be little question that this seemingly deliberately menacing persona has been fundamentally undermined by this week’s judgement. Sisu, it would appear, are as capable of getting battered in court as they are of doing the battering themselves.
Of course, the ultimate losers in all of this remain – as has been the case from its very start – the supporters of Coventry City Football Club, who face the stark reality of a second year in exile in Northampton while the legal cases rumble on and on and the prospect of a new stadium remains little more – on the basis of the negligible amount of evidence seen in its favour – than a pin-prick on the horizon. How many of even that small number of supporters who decided to stick with the club throughout the course of last season will continue to do so again this time around? No-one can say for certain at the moment, but it seems inconceivable at the time of writing that it will be many more than the pitiful number that did so last season. In addition to this, there has been a recent exodus of players from the club which indicates that even hitting the sporadic heights that it did on the pitch last season might be something of a tall order.
The latest to leave was Callum Wilson, who has gone to AFC Bournemouth for £3m. The timing of Wilson’s departure may, of course, be a coincidence, but then again it may not, and for any ambitious player the prospect of playing in front of a handful of supporters was always unlikely to be an enticing one. Perhaps Pressley can continue to exhibit the sporadic alchemist tendencies that he did last season. It’s difficult to avoid the feeling that the coming season is likely to be even more difficult than the last was. The ever-dwindling number of supporters of Coventry City Football Club that have somehow managed to retain their faith in the club have had that faith test to breaking point over the last year or so, how the fate of this absolute car crash of a football can be resolved happily for everybody is this week more distant than ever. And all the while, the owners of the football club continue on their destructive path while the Football League sits on its hands, giving the distinct impression of doing as little as possible to actively assist in getting the club back to the city of Coventry itself. The judgement of the High Court may be damning, but it seems to have had little influence on those at the heart of this most wretched of stories.
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