J
Jack Griffin
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This revelation about SISU threatening to pull the plug seems to have made it into the media at the time.. http://www.theguardian.com/football...ort-blog/2012/apr/26/coventry-city-relegation
Coventry City dice with death as relegation sets out a bleak future
An ill-fated move to a new stadium they could not afford to rent even in the Championship leaves the Sky Blues in dire danger
David Conn, guardian.co.uk, Thursday 26 April 2012 15.58 BST
Coventry City's fall from the Championship on Saturday prompted reflections immediately on the club's 34 years in the top flight, from the 1967 promotion managed by Jimmy Hill, to relegation under Gordon Strachan as recently as 2001. Yet it is partly a legacy of overspending on players to stay in the Premier League, just as wages were becoming galactic, and debts run up after relegation that have landed the Sky Blues in this genuine crisis.
Coventry have been relegated to League One with a threadbare team. Merely tenants in their Ricoh Arena home, they have defaulted on the rent, and the club's venture capitalist owners, Sisu, are considering pulling their funding. Coventry city council, which funded the arena's construction and is its 50% owner, is rejecting Sisu's requests to reduce the £1.2m annual rent, and calling on the financiers to sell the club if they cannot improve its calamitous fortunes.
"Sisu have allowed experienced players to leave, losing the backbone of the team, there is constant change of executives running the club, they say they are losing £500,000 a month yet identify the £100,000-a-month rent as the root of their problems," says John Mutton, Labour leader of the council. "If they cannot return Coventry City into a successful club, they should go now and let others pick up the pieces."
Tim Fisher, the latest chief executive hired in December by Sisu to try to salvage £30m lost since buying the club as a planned Premier League-returning investment in 2008, accepts that selling more seasoned players last summer – including the centre-half Ben Turner and midfielder Aron Gunarsson, both to Cardiff City – then having to overplay promising young players this season under Andy Thorn as manager has been self-defeating. The club lost £6m in the year to 31 May 2010, its most recently published accounts, and the accounts for 2011, statutorily due on 29 February, have still not been filed. This, explains Fisher, is because Sisu are pondering whether to continue funding the club as a going concern.
That is prompting anxiety not only among fans jaded by a decade of decline, but City's staff, who have seen the swingeing job cuts when clubs fall into administration, while players' wages are protected. Fisher sought to rally the staff after the 2-0 home defeat by Doncaster Rovers that consigned Coventry to relegation, and says he is striving to keep Sisu committed.
"My key role is to convince the owner to finance this asset," says Fisher, who is a banker specialising in financially "distressed" companies. "Coventry City is a fallen angel, a Premiership brand now in the third tier. The club has an incredibly loyal fan base and I am confident in telling the owners that if they continue to fund it, it will bounce back to the Championship."
Fisher says he withheld the £100,000 rent for last month in an effort to "focus minds" on what he claims are its "unsustainable" terms. City not only pay the hefty rent to play in the arena, but receive none of the income from the advertising, food, drink or other events at a venue of sufficient quality to be hosting Olympic football matches this summer.
Mutton painstakingly recites the grim history of the club's botched move to the Ricoh when City had debts of more than £50m and were shipping further losses. After 2001's relegation coveted players including Craig Bellamy and Chris Kirkland were sold but still the debts swelled. The money from selling Highfield Road was not huge and the club could not ultimately finance either buying the land it had identified for the arena, nor building it. Asked to provide necessary funding, the council did so, for a 50% share in the arena management company. The club could not even buy the other half, so a charity associated with a director, Derek Higgs, bought 50%, and the club, when it finally entered the stadium in 2005, did so as a tenant, always on these same terms. The club still has the right to buy the Higgs charity's stake, but has never exercised it.
Fisher says he needs the rent and terms reduced to give the club a chance of firm foundations, with £1.2m a year very difficult for a League One club to pay, but Mutton derides that idea as half-baked and would lead only to the arena becoming loss-making as well. He argues that local businessmen Gary Hoffman and Joe Elliott are prepared to take over, if Sisu pull out, depending on the state the club is in.
"If Sisu cannot invest to enable the club to be successful again, they should cut their losses now," says the council leader, uncompromisingly. Sisu, silent at present, are considering whether to stay involved at all.
In the meantime Coventry, whose survival in the top flight warmed the soul of sentimentalists, are down in the third tier for the first time since promotion in 1964.
