Inside story: How Coventry City took on their 'vulture fund' owners - and won
The Championship club, which has been playing at Birmingham City's St Andrews for last two seasons, is finally returning home to the Ricoh
By Jim White 12 March 2021 • 2:46pm
Coventry City are going home. Or at least back to the city that bears their name. The Championship club, which has been playing at Birmingham City’s St Andrews for the last two seasons, signed an agreement this week that ensures it will stage its fixtures at the Ricoh Arena once again from August. And this time, the intention is to hang around. At least for a while.
“It’s been a long and winding road with a lot of bumps along the way,” Dave Boddy, the club’s Chief Executive told
Telegraph Sport this week. “But we’re back, we’ve signed a deal for 10 years. And now we have a real opportunity to build revenues and the supporter base.”
Boddy is not exaggerating when he describes Coventry’s recent history as bumpy. It is story of dispute and distressed assets, of relegation and administration, of the locally-elected mayor finally being obliged to step in and act as referee in the negotiations. It is also a tale of the economic effects of lockdown concentrating a few minds.
“Possibly so,” said Boddy, when asked if Covid had changed the approach of those involved.
“Though I will say discussions had started before the pandemic struck.”
At the story’s heart is the place where the club will play next season: the Ricoh Arena. Opened in 2005 on the site of an old gasworks in the Rowley’s Green area of the city, the 32,000-seat stadium was central to a new leisure zone, alongside a conference centre, shopping mall, hotel and casino.
It was built and owned by the local council rather than the football club, whose old stadium at Highfield Road had been modernised into a housing development. Given City did not own their own home, many could not understand why in 2007, when the club was apparently within 20 minutes of folding, it was rescued by the Mayfair-based hedge fund Sisu, an organisation with no history of involvement in football.
After all they weren’t picking up any bricks and mortar assets, they were buying a fading team and its training ground.
Indeed, in the early days of Sisu’s ownership there was little to suggest these were owners with the ambition to restore the club to the FA Cup-winning, top-flight status engineered by its pioneering erstwhile manager Jimmy Hill. Supporters were disturbed by the manner in which the board was constantly falling apart and being reorganised, despairing that their club was being steered by an endless succession of mysterious directors, many of whom lived abroad, most of whom were never seen at matches, and few of whom stuck around for long.
But despite appearances there was a rationale at work. As the club’s then CEO Tim Fisher told supporters in 2013, Sisu is “a distressed debt fund which therefore batters people in court” - also known as a ‘vulture fund’. Distressed debt is a deliberate corporate strategy which seeks to bring down the value of assets in order to buy them on the cheap. Sisu was after the Ricoh, but was not prepared to pay anything like the price the council insisted was its bottom line. The plan was this: assuming they were the only possible tenant, by constantly agitating and disputing, they hoped to bring the price of the asset down and offer to buy it for less than market value.
Part of the strategy was to engage in constant rent disputes. As Mr Justice Hickinbottom summed up at the end of one of the many court cases Sisu had brought against the council: they had deliberately engineered a rent strike in order to purchase the Ricoh “at a knockdown price”.
In 2013 the owners went one stage further in their attempts to force a fire sale: they left Coventry altogether, staging matches at Northampton Town’s Sixfields, the Ricoh abandoned as an empty shell.
The fans, however, were not amused. A boycott was organised: more supporters would turn up for away matches than those staged in Northampton; marches and demonstrations were frequent. Seeing their matchday revenue squeezed, the board decided to return to the Ricoh after just a year away.
A month after they had returned, however, the council called their bluff and sold the stadium to another sporting entity: Wasps Rugby Union Club.
Not that that changed things. Cue another endless round of disputes between owner and tenant. In truth, the football club had some cause for complaint about the deals they were offered in terms of revenues from food and beverage sales and car parking (an essential part of the matchday experience for many fans given the risible service provided to the stadium’s railway station). And in 2017 it was announced the club was to leave the Ricoh once again for a
new stadium built in conjunction with the University of Warwick.
The announcement came just as Mark Robins was installed in the dugout. Even as the club sank towards League Two, propelled by ever-shrinking playing budgets, he demonstrated its huge marketable potential by winning the Checkatrade Trophy in front of 42,000 Sky Blues fans at Wembley. After just one season in the fourth tier, he bounced them back into League One, only to be told that matches would be conducted at Birmingham’s St Andrews ground for the near future. Instead of 42,000, he was soon organising home games in front of 6,000.
“A lot of fans found it difficult to follow the club to Birmingham,” explained Dave Eyles, the chair of the Sky Blue Trust supporters group. “I didn’t go, it just felt all wrong. When we went to Northampton, there was a united fanbase, a concerted boycott.
This time there was silence and a split in the fanbase between those who refused to go and those who reckoned you were being disloyal not to. It was horrible to see.”
Crowd numbers remained suppressed despite Robins, with a budget significantly lower than most of the clubs in the division, steering his side to the top of League One. Then Covid struck. But Coventry were so far ahead, they were promoted last May on points per game. It did, however, mean they began the new Championship season behind closed doors.
“I think the pandemic made it easier to accept that we were in Birmingham,” said Eyles. “After all, if you can’t go and watch, it doesn’t really matter where you are playing.”
As the lockdown fried revenues not just for Coventry but for their old landlord Wasps, the West Midlands mayor Andy Street felt it a good time to bring the parties together in an attempt to find resolution. And, after nearly a year of negotiations, Boddy and Wasps’ CEO Stephen Vaughan this Wednesday staged a shirt swap on the Ricoh pitch to announce a new arrangement had been signed.
“It is the best-ever deal for the football club at the Arena,” said Boddy. “I know our supporters previously had been quite reticent to spend money in the stadium because they felt we weren’t benefiting from it so hopefully we can get that message across to them that it’s not the case now moving forward. This is a real opportunity to put more money into the football budget.”
So it is that Robins and his team will start the new season at the Ricoh, on a pitch that will be relayed over the summer in order to host both football and rugby games. Whether they are still in the Championship will be decided over the next 10 games. But Boddy for one anticipates he will still be able next season to benefit from matches against teams like Derby and Nottingham Forest and their significant travelling support.
“I’m not even going to talk about relegation,” he told
Telegraph Sport. “It isn’t on my agenda, nor is it on the manager's.”
www.telegraph.co.uk
