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If you were to look for a microcosm of everything that is wrong about English insolvency law in the twenty-first century, you couldn’t find a much better example than the short period in administration of Coventry City Football Club Limited. A company which owed money effectively to itself put the company into administration, therefore getting their choice of man in the job. The administrator then fielded bids from elsewhere – a matter which will have cost those tabling the alternative bids both time and money – but then announced that another arm of the same company that lent itself the money which was a part – not the most important part, but a part nevertheless – of the chain of events which led to that company entering into administration in the first place were the successful bidders to take the club back out of administration. SISU, it seems likely this evening, will be keeping hold of their grip over Coventry City Football Club.
What’s more, there was likely never any question that this was to be the outcome for the club, all of which likely goes at least some of the way towards explaining why CEO Tim Fisher continued to speak as if he was still in charge of the club while it was supposed to be being run by the administrator. Every legal loophole going has been exploited by a hedge fund which has consistently acted in a manner which has been the epitome of every predatory instinct so prevalent amongst the über-capitalist robber barons of twenty-first century British football. What the future now holds for the club is as uncertain as it was before, though. Interviewed earlier this week, Fisher stated that “the boat has sailed” on the notion of the club returning to The Ricoh Arena and this means that it is now likely – indeed, unless something dramatic were to happen over the next few weeks or so, almost certain – to be starting next season homeless, with Walsall still the favourite amongst the list of lodgings for next season. The company may have been, to quote the vernacular of the insolvency business, “rescued as a going concern”, but for how long it will be able to compete as the Football League’s SCMP (Salary Cost Management Protocol) rules kick in is a different matter altogether.
The legal entity that will buy CCFC Ltd is called the Otium Entertainment Group Limited, so allow us to take a moment to look at the new custodians of the club. The company was incorporated on the twenty-first of November 2011 and describes its own sphere of activity as holding companies not elsewhere classified. For a company that is only a little over a year and a half old, it has already had an eventful time of things. It has had seven company directors during this period of time, three of which are still registered with it. One former director of OEG is Ken Dulieu, who acted as the chairman of Coventry City Football Club from the 28th of March until the 2nd of December 2011 and was a director of OEG Ltd from the 21st of April 2011 until the 29th of November 2011. Another is a certain Timothy Fisher, who was appointed as a director of OEG Ltd on the 4th of January 2012 and remains one to this day, as well as holding other directorships, including both Coventry City FC Ltd and Coventry City FC (Holdings) Ltd., as well as Sky Blue Sports & Leisure Ltd, who were Ray Ranson’s partners SISU Equity at the time of the take-over of the club in 2008 and against whom there has been a Proposal to Strike off registered at Companies House since the 2nd of June 2013. Meet the new boss, same as the old boss, then.
So what exactly is the Otium Entertainment Group Ltd, then? Shortly before Dulieu left the club in 2011, he was questioned by the Coventry Telegraph about what role the company played in the structure of the football club at that time, and his response was to state that it was “set-up as a vehicle to allow the ultimate shareholder of Coventry City FC to provide the football club with working capital at a time when such an injection was vital”, before adding that, “At no time has OEG been viewed as anything other than a vehicle for raising new money for Coventry City” and that “The directors are the same as those at the ultimate holding company Sky Blue, including the corporate secretary who also acts as secretary to the whole group of companies, including Coventry City Football Club Limited and Coventry City Football Club (Holdings) Limited.” On the 23rd April 2013 a first notification of strike-off action in the journal of record the London Gazette, though a proposal to strike the company off was discontinued four weeks later.
The reaction of many Coventry City supporters has been predictably incandescent, and whilst it remains difficult to say to what extent crowds will be adversely affected by those who have been left disillusioned to the point of disinterest, it is difficult to look at the reaction and imagine that the continuing SISU ownership of the club will be anything but ruinous for it. There is talk of protest, and now is surely time for the Sky Blue Trust, which has two thousand members and the potential to create exactly the sort of fuss that needs to be created right now, to step up to the plate and coordinate the fan-base. There are, as there are so many clubs, those that will be implacably – and usually loudly – opposed to the Trust and who see nothing good in anything they do, but to adopt this position is to misunderstand, most likely willfully, what the Trust is about. To go into that matter in greater detail is for another time, but the basic principle goes something like this: the Trust is not “them,” a third party entity with an “agenda” entirely of its own. The Trust is a representative of the club’s support, and those unhappy at the way that it is running itself – for the record, we have seen little to suggest that they are doing anything but an excellent job at present – should join it, become a part of it and make their voices heard. It is (or should be), if you are a supporter of Coventry City, “us.” It’s an argument that has played out many times before in recent years, and the substance of these arguments is no close to a facsimile as to prove the old adage that history doesn’t repeat itself, but people do.
This purchase still needs to be ratified by the Football League and the Football Association, but on balance it seems likely that they will give it the go ahead. It is also possible that ACL, the owners of The Ricoh Arena, may seek to challenge this exit from administration, and even if they don’t there is the small matter of the court case brought by SISU over the renegotiation of the mortgage for the stadium, which has been interpreted by many as little more than an attempt by SISU to starve ACL into insolvency in order to pick up The Ricoh Arena on the cheap. SISU have never either explicitly or implicitly acknowledged anything like this. Even this court case seems to be, if Tim Fisher is to be believed, being fought because of some hitherto unseen matter of principle – “What about the £100,000 the council will have spent on this? How many jobs would that have saved?” was one comment from a recent forum – but few seem to be persuaded by this apparent concern. Coventry City supporters are mostly concerned at present at the prospect of their club becoming little more than a husk, a faded facsimile of the club that played three and a half consecutive decades of top flight football, more than once surviving and maintaining that status against all odds. A happy ending for those supporters seems a long way off this evening.
If you were to look for a microcosm of everything that is wrong about English insolvency law in the twenty-first century, you couldn’t find a much better example than the short period in administration of Coventry City Football Club Limited. A company which owed money effectively to itself put the company into administration, therefore getting their choice of man in the job. The administrator then fielded bids from elsewhere – a matter which will have cost those tabling the alternative bids both time and money – but then announced that another arm of the same company that lent itself the money which was a part – not the most important part, but a part nevertheless – of the chain of events which led to that company entering into administration in the first place were the successful bidders to take the club back out of administration. SISU, it seems likely this evening, will be keeping hold of their grip over Coventry City Football Club.
What’s more, there was likely never any question that this was to be the outcome for the club, all of which likely goes at least some of the way towards explaining why CEO Tim Fisher continued to speak as if he was still in charge of the club while it was supposed to be being run by the administrator. Every legal loophole going has been exploited by a hedge fund which has consistently acted in a manner which has been the epitome of every predatory instinct so prevalent amongst the über-capitalist robber barons of twenty-first century British football. What the future now holds for the club is as uncertain as it was before, though. Interviewed earlier this week, Fisher stated that “the boat has sailed” on the notion of the club returning to The Ricoh Arena and this means that it is now likely – indeed, unless something dramatic were to happen over the next few weeks or so, almost certain – to be starting next season homeless, with Walsall still the favourite amongst the list of lodgings for next season. The company may have been, to quote the vernacular of the insolvency business, “rescued as a going concern”, but for how long it will be able to compete as the Football League’s SCMP (Salary Cost Management Protocol) rules kick in is a different matter altogether.
The legal entity that will buy CCFC Ltd is called the Otium Entertainment Group Limited, so allow us to take a moment to look at the new custodians of the club. The company was incorporated on the twenty-first of November 2011 and describes its own sphere of activity as holding companies not elsewhere classified. For a company that is only a little over a year and a half old, it has already had an eventful time of things. It has had seven company directors during this period of time, three of which are still registered with it. One former director of OEG is Ken Dulieu, who acted as the chairman of Coventry City Football Club from the 28th of March until the 2nd of December 2011 and was a director of OEG Ltd from the 21st of April 2011 until the 29th of November 2011. Another is a certain Timothy Fisher, who was appointed as a director of OEG Ltd on the 4th of January 2012 and remains one to this day, as well as holding other directorships, including both Coventry City FC Ltd and Coventry City FC (Holdings) Ltd., as well as Sky Blue Sports & Leisure Ltd, who were Ray Ranson’s partners SISU Equity at the time of the take-over of the club in 2008 and against whom there has been a Proposal to Strike off registered at Companies House since the 2nd of June 2013. Meet the new boss, same as the old boss, then.
So what exactly is the Otium Entertainment Group Ltd, then? Shortly before Dulieu left the club in 2011, he was questioned by the Coventry Telegraph about what role the company played in the structure of the football club at that time, and his response was to state that it was “set-up as a vehicle to allow the ultimate shareholder of Coventry City FC to provide the football club with working capital at a time when such an injection was vital”, before adding that, “At no time has OEG been viewed as anything other than a vehicle for raising new money for Coventry City” and that “The directors are the same as those at the ultimate holding company Sky Blue, including the corporate secretary who also acts as secretary to the whole group of companies, including Coventry City Football Club Limited and Coventry City Football Club (Holdings) Limited.” On the 23rd April 2013 a first notification of strike-off action in the journal of record the London Gazette, though a proposal to strike the company off was discontinued four weeks later.
The reaction of many Coventry City supporters has been predictably incandescent, and whilst it remains difficult to say to what extent crowds will be adversely affected by those who have been left disillusioned to the point of disinterest, it is difficult to look at the reaction and imagine that the continuing SISU ownership of the club will be anything but ruinous for it. There is talk of protest, and now is surely time for the Sky Blue Trust, which has two thousand members and the potential to create exactly the sort of fuss that needs to be created right now, to step up to the plate and coordinate the fan-base. There are, as there are so many clubs, those that will be implacably – and usually loudly – opposed to the Trust and who see nothing good in anything they do, but to adopt this position is to misunderstand, most likely willfully, what the Trust is about. To go into that matter in greater detail is for another time, but the basic principle goes something like this: the Trust is not “them,” a third party entity with an “agenda” entirely of its own. The Trust is a representative of the club’s support, and those unhappy at the way that it is running itself – for the record, we have seen little to suggest that they are doing anything but an excellent job at present – should join it, become a part of it and make their voices heard. It is (or should be), if you are a supporter of Coventry City, “us.” It’s an argument that has played out many times before in recent years, and the substance of these arguments is no close to a facsimile as to prove the old adage that history doesn’t repeat itself, but people do.
This purchase still needs to be ratified by the Football League and the Football Association, but on balance it seems likely that they will give it the go ahead. It is also possible that ACL, the owners of The Ricoh Arena, may seek to challenge this exit from administration, and even if they don’t there is the small matter of the court case brought by SISU over the renegotiation of the mortgage for the stadium, which has been interpreted by many as little more than an attempt by SISU to starve ACL into insolvency in order to pick up The Ricoh Arena on the cheap. SISU have never either explicitly or implicitly acknowledged anything like this. Even this court case seems to be, if Tim Fisher is to be believed, being fought because of some hitherto unseen matter of principle – “What about the £100,000 the council will have spent on this? How many jobs would that have saved?” was one comment from a recent forum – but few seem to be persuaded by this apparent concern. Coventry City supporters are mostly concerned at present at the prospect of their club becoming little more than a husk, a faded facsimile of the club that played three and a half consecutive decades of top flight football, more than once surviving and maintaining that status against all odds. A happy ending for those supporters seems a long way off this evening.
