Plus ça Change: The High Court Damning Of Coventry City

10 By Ian  |   The Ball  |   July 5, 2014  |     85

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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Ian

Ian began writing Twohundredpercent in May 2006. He lives in Brighton. He has also written for, amongst others, Pitch Invasion, FC Business Magazine, The Score, When Saturday Comes, Stand Against Modern Football and The Football Supporter. Ian was the first winner of the Socrates Award For Not Being Dead Yet at the 2010 NOPA awards for football bloggers.

Comments
  • July 5, 2014 at 3:57 pm

    Dave

    The football league must act and protect football fans, their support of SISU in itself promotes the fact that they are not fit for purpose, their vision is football for football fans and yet they sit back after making a statement of agreement with SISU which has been broken.
    SISU have not paid what they owe, they have not provided enough progress to move the club back to Coventry in the time scales stated, they have not taken up the offer of a rent free term back at the RICOH. For these reasons alone the football league in a court of law would win any case against the financial might of our Cayman island landlords, I call upon Greg Clark of the football league to follow his organisations vision and give football back to the community of Coventry City, you hold the key Greg all you have to do is turn it and let us all back in i’ve been away for twelve months now all I want to do is go back home.

  • July 5, 2014 at 9:29 pm

    Paul

    KCIC have extended an olive branch to SISU and offered to pay rent & match day cost as long as crowds don’t exceed 5000 ( a significant number above those attending Sixfields) but this has been rejected out of hand by SISU Chief Exec Tim Fisher who was quoted as saying “this was never about rent” and that the club “was capable of paying” – so why was rent withheld if not to distress ACL (The owners of the stadium)???

    Explain one legitimate reason the club have to not to return to the Ricoh Arena given the offer that been put to them? Tell the fans why they cannot watch their team at their home stadium? Why is it in the best interest of the club to stay away when the MAJORITY of the fans are boycotting ‘home’ matches? Why are the owners allowed the golden share when their activities are not in the best interests of the football club? Etc etc.

  • July 6, 2014 at 8:00 am

    Bill Smith

    Sisu are the experts. It has pointed the way. Deny one’s opponents of funds. Not one penny more should be extended to all areas, including away games, website, merchandise, radio commentary,etc. Sisu is heartless. The only way to hurt it is through its pocket.

  • July 6, 2014 at 12:19 pm

    Orca

    One of the most galling things is that if the new Stadium is ‘Plan A’, why do SISU persist in trying to win court cases against the Council? What purpose does it serve? If SISU and Otium have ‘moved on’, well according to Tim Fisher they have, why would a Court victory be so important?

  • July 6, 2014 at 3:54 pm

    Robert Leslie

    SISU made commitments to the Football League in order to get sanction to play City’s ‘home’ matches in Northampton. SISU has not honoured these commitments.
    The Judicial Review has shown that SISU have no grounds for dispute with either ACL or Coventry City Council.
    Given these facts how can the Football League possibly sanction CCFC playing at Sixfields next season? The FL need to give SISU an ultimatum – the club plays in Coventry at The Ricoh or it doesn’t play at all.

  • July 6, 2014 at 7:03 pm

    john unitt

    I suggest 3 things
    1) We get all supporters to ask their full extended families to turn up and bring the WHOLE COVENTRY COMMUNITY out to Saturday’s Rally. We got 250000 out after we won the Cup, why cant we have a massive turn out of that same community on Saturday saying clearly NO MORE
    2) Fisher and Labovtich MUST be voted out with a vote of no confidence. They have proven an inconsistent joke with absolutely NO CREDIBILITY WHATSOEVER!
    3) Sorry guys BUT WE MUST HAVE AT LEAST ONE RECORD BREAKING ‘NIL ATTENDANCE’ FOR A SELECTED HOME GAME’. A chosen match WHERE NOT -ONE TURNS UP AT ALL To show a united front that if necessary we will cease ALL financial input till they GET OUT OF OUT CLUB!!

  • July 6, 2014 at 7:06 pm

    Rich H

    The Football League are letting Coventry City down badly. It has been stated by the Judge in a court of law that SISU withheld rent in order to financially distress ACL and buy a share of the Ricoh on the cheap. The Football League allowed SISU to have games played in Northampton on the understanding that they intend to return. Time to order them back.

  • July 7, 2014 at 6:17 am

    Tim

    The “nil attendance” idea is great in theory but we know in practice there will be a few hundred people whose selfish desire to attend football matches means more to them than the future of the club, as well as a few hundred more who have been given free tickets by SISU.

    The FL will do nothing – any attempt to interfere will be decried as “regulation” and capitalists don’t like regulation – until things stop going their way, at which point they run to the courts.

    I can see no other way forward than leaving CCFC to rot with SISU in charge – let them lose their 70m while we start a new club in Cov playing at the Ricoh. It won’t have the CCFC name but it will have its soul.

  • July 7, 2014 at 12:31 pm

    Mike Watson

    I have written to the Football league and received a pathetic response to which I in turn responded – see below.Somebody in high authority in government needs to order the Football league to act.

    Andrew,

    Thank you for your quick response to my email. However it is extremely disappointing that the Football League has not responded to the article and has hidden behind mealy mouthed previous statements and the likes of ” can make no further comment at this time”.

    You make no reference to the article concerned. A high court judge states that SISU have “seriously mismanaged the club”. I would like a statement from the football league explaining why, in the light of this statement from the high court judge, they can justify SISU/OTIUM being fit and proper persons to run a football club. RESPONSE please.

    The article also states “the dislocated club a blight on the Football League, which unfathomably allowed Coventry City to be moved by a hedge fund seeking to “distress” the operating company of an arena built for the club’ owned by the local council and a charity”. Can you provide a response to this overt criticism of the Football League. RESPONSE please.

    I would suggest that the Football league could have threatened expulsion at the time that SISU wanted the “temporary move”. It would have been straightforward to have made staying at the Ricoh in Coventry a condition of giving SISU the golden share. That could still be done now if the Football League had any conviction, guts or integrity.

    If you fail yet again to act in the best interests of the true fans of Coventry City anybody in the Football League with any management responsibility should hang their heads in shame!

    Regards
    Mike Watson

    Sent from my iPad

    On 4 Jul 2014, at 09:25, Enquiries wrote:

    Mike,

    Thank you for your email, we note your comments.

    As you may have read a Football League spokesman recently said, “The Football League will continue with its efforts to resolve what is a complicated and hostile commercial dispute and we remain in dialogue with all the relevant parties.

    “Our overriding aim is the return of Coventry City to the Coventry area within the timescale set out in the Club’s membership agreement.”

    Aside from that, we can only provide the following information regarding the situation, which we have publicly stated previously.

    The Board of The Football League has received updates and the situation continues to be closely monitored, with discussion ongoing regarding progress in returning the Club to the Coventry area. You will understand that it is not always possible to make every detail of these meetings public, but as with all cases of clubs looking to move grounds, The League will continue to emphasise to the Club that supporters should be kept up to date as often as is practically possible.

    Whilst The League has publically urged Otium and ACL to resolve the dispute, The League has no jurisdiction to force any Club (or landlord for that matter) to come to an arrangement over land or rental agreement. With no agreement in place to play at the Ricoh Arena, reluctantly, the Board of Directors approved the application to relocate on a temporary basis only.

    The Board has given Coventry City permission to play its matches at Northampton Town for the next three seasons, with no agreement in place regarding the Ricoh Arena. Obviously if an arrangement is reached by the club to return to Coventry at an earlier point then this is desirable for all. The League has previously stated that ideally an agreement can be reached between parties to enable this to happen. This term can be extended for two further periods of 12 months, provided the club can demonstrate sufficient progress towards the building of a new stadium in the Coventry area. Should the club not comply with this timeframe, the matter will be considered by The Football League Board at the relevant time with reference to both the permission to relocate and the membership agreement entered into in August 2013. Expulsion from the League would be a realistic outcome at that stage.

    The stadium dispute between Arena Coventry Limited and Coventry City is ultimately one which must be resolved by the two parties themselves, if they are prepared to do so. However, The League is continuing with our efforts to get the Club playing back in the Coventry area as soon as possible.

    The League is unable to provide further comment at this time.

    Thank you for contacting The Football League.

    Regards,

    Andrew Pomfret
    Customer Services Officer
    The Football League Limited
    http://www.football-league.co.uk

    Celebrating 125 years since it was formed in 1888 by its twelve founder members, The Football League is the world’s original league football competition and is the template for leagues the world over. With 72 member clubs, it is also the largest single body of professional clubs in European football and is responsible for administering and regulating the Sky Bet Football League, Capital One Cup and Johnstone’s Paint Trophy, as well as reserve and youth football. To find out more click here.

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    From: Mike Watson [mailto:mikejwatson@sky.com]
    Sent: 03 July 2014 16:10
    To: Enquiries
    Subject: RE: Ownership of Coventry City FC

    Please read the guardian article below about my beloved Sky Blues:-

    http://www.theguardian.com/football/2014/jul/03/coventry-city-sisu-ricoh-arena

    This is an article written by a respected journalist, David Conn of the Guardian.

    Isn’t it about time that the Football League stepped in to resolve the terrible problems at CCFC caused by SISU?

    You have a responsibility to the fans to bring this debacle to an end. “Real football for real fans” remember.

    Despite all of the Coventry fans protestations you have done absolutely nothing to force SISU to get us back to the RICOH.

    Could you not remove the golden share from them?

    Regards,

    Mike Watson
    e-mail: mikejwatson@sky.com

    From: enquiries [mailto:enquiries@Football-League.Co.Uk]
    Sent: 18 June 2013 12:02
    To: ‘mikejwatson@sky.com’
    Subject: RE: Ownership of Coventry City FC

    Mike,

    Thank you for your email.

    Please view The Football League’s latest statement regarding Coventry City on our official website here http://www.football-league.co.uk/footballleaguenews/20130618/statement-on-coventry-city_2293334_3212923.

    The League is not able to comment further at this time.

    Thank you for contacting The Football League.

    Regards,

    Andrew Pomfret
    Customer Services Officer
    The Football League Limited
    http://www.football-league.co.uk

    The Football League Ltd. Registered Office – Edward VII Quay, Navigation Way, Preston PR2 2YF. Registered No: 80612. Tel: 0844 463 1888. Fax: 0844 826 5188.
    London Office – 30 Gloucester Place, London, W1U 8FL. Tel: 0844 826 3099

    Follow us on Twitter: http://www.twitter.com/football_league

    This e-mail and any attachments are intended only for the individual to whom it is addressed. It may contain privileged and confidential information. If you have received this message in error or there are any problems, please notify the sender immediately and delete the message from your computer and any copies. The unauthorised use, disclosure, copying or alteration of this message is forbidden. Any views set out in this e-mail are the views of the individual sending it, and not the views of The Football League Limited unless otherwise stated. This e-mail should not be seen as forming a legally binding contract unless otherwise stated. Although we believe this e-mail and any attachment are virus-free it is your responsibility to ensure this on receipt.

    From: mikejwatson@sky.com [mailto:mikejwatson@sky.com]
    Sent: 15 June 2013 12:20
    To: enquiries
    Subject: Ownership of Coventry City FC

    I would like to express my deep concern regarding all of the events around the administration of Coventry City Football Club. SISU the owners, as you are aware, put the club (CCFC Limited) into administration and have destroyed our club over the last few years. The Football League declared that the golden share was with CCFC Ltd (even though all of the players contracts were with Coventry City Football Club (Holdings) Limited) and docked 10 points from the club due to the administration and we lost any chance of the play-offs.

    The Football League has the power to transfer the golden share to a new owner – I ask you to intervene and refuse to transfer the golden share to Otium Entertainment Group Limited (a SISU company) and to transfer it to another buyer who has the best interests of the football club and the CCFC fans at heart. SISU have no interest in the football club and seem to relish ignoring the fans – for example a petition to keep the club at the Ricoh arena has been signed by over 13,000 fans and they are completely ignoring it. SISU are not “fit and proper persons” and therefore the Football League should not allow them to own the football club on this basis.

    I would be grateful for a response.

    Regards,

    Mike Watson
    e-mail: mike.watson@mwpms.co.uk
    telephone: 07946 684557

    The Football League Ltd. Registered Office – Unit 5B. Edward VII Quay, Navigation Way, Preston PR2 2YF. Registered in England & Wales. Reg No: 80612. This email message has been delivered safely and archived online by Mimecast.
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  • July 10, 2014 at 7:52 pm

    MoeTheBarman

    What a mess. Good luck to Coventry and its fans. Fuck sisu.

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