My main thought following today’s revelation that SISU are taking the council/ACL to the High Court over the mortgage deal is that we are far from the end of this bitter dispute. Like most fans I would like to take every single person involved to somewhere in Siberia so that I never have to see their faces again. Unfortunately this isn’t really that possible and we would still need to find someone to run the club and stuff. I profess no intricate knowledge of business law and I also do not possess a degree in business or anything like that. What I can offer is a basic guide to the key points/players in this dispute. I also don’t proclaim that these are the ‘facts’ as every 5th post on Sky Blues Talk seems to do, the choice of what I post is subjective and is thus informed by my opinion and not an objective truth.
Why are the council involved in the stadium of a football team anyway?
Mainly because the club got relegated from the Premier League whilst the project began. The cost of clearing the contaminated site at Foleshill gasworks was larger than expected and the club also began paying rent to play at Highfield Road after selling the stadium. Relegation meant that these costs were prohibitive to the club, they were no longer able to afford this and were already essentially locked into building the stadium. The plans for a 45,000 seater stadium with a slide-out floor and retractable roof were scaled back and an identikit 32,000 stadium was built instead. This was only possible due to the council making up the gap in funding, they now had a 50% stake in the arena with the other 50% being sold to the Higgs charity who I believed also helped out in the building project. The problem being that the club now had to pay rent, and had no access to match-day revenue aside from ticket sales, which has now twice threatened to put the club into liquidation.
Why don’t SISU pay the rent though?
Firstly because it’s too high, with financial fair-play restrictions next season it would mean a fire sale and no replacements (basically almost certain relegation). Secondly because it’s a negotiating tactic which gets ACL to the table. If SISU continued to pay the rent ACL would have been happy to carry on as normal and not listen to pleas for re-negotating of the current terms of rent. Finally though it’s also down to sheer bloodymindedness, SISU don’t want to back down now due to the amount of mud that has been slung from both sides and paying the rent would represent a defeat for SISU, with the consequences likely to be paid for by the club.
Why don’t ACL accept a reduced rent deal with access to match-day revenues?
Firstly because it would seriously threaten their business model, the rent itself makes up a large proportion of their turnover and then you have to take into account food and drink sales and income from parking, the casino etc. Secondly because the deal SISU want wouldn’t be good for ACL and vice versa as well. Finally I go back to the bloodymindedness point, ACL/the council don’t appear likely to back down easily, it’s a test of nerves.
Why don’t SISU just buy the stadium?
Because the council don’t want them to. The council’s 50% stake is under their control, given their relationship with SISU, there simply won’t be a sale there. Also the council allegedly also have the right to veto the sale of the Higgs Charity’s stake meaning that the council have the power to sell the stadium to whomever they so wish. Additionally I imagine the stadium won’t come cheap and it’s not really in SISU’s nature to invest that much, especially when ACL appears to be struggling even with the virtue of receiving over £1m in rent a year.
Who’s this Preston Haskell IV character and is he the saviour of our club?
Not entirely sure, his father is a property developer and I believe he does something similar. Also he has business interests in mining in the DR Congo which I find quite unethical given that the mining regions in that country are largely run by warlords with somewhat questionable interpretations on human rights. Say what you like about SISU but they aren’t responsible, directly or indirectly, for potential human rights abuses. However mining is a lucrative business and Preston has an estimated fortune of around £120m, plus can probably ask for a fiver or two from his father. That being said, with club debts over £60m (and on what!) £120m won’t go too far and he is unlikely to pilfer away his wealth (which is different to having actual money mind you) on an unsustainable football club somewhere in England. The council believe though that he will help develop the area around the arena and seem willing to allow a sale of 50% of the arena to him, so he clearly isn’t in it (if indeed he is) to have a massive splurge in an attempt to reach the Premier League.
Where will Coventry play next season?
If all things fail then Coventry will not be playing at the Ricoh. It would take the council backing down and renegotiating a rent deal which works for the club but is unlikely to work for them or ACL. This means that there is a large likelihood that Coventry will not be playing in the Ricoh, or indeed in Coventry at all. Stewards have apparently been told there’s only a 20% chance of staying, so it’s not looking good. The already mooted alternatives are Nene Park, which was vacated by Rushden & Diamonds who went out of business, then Kettering who also are in severe financial difficulties and also have been unable to fulfil a few fixtures due to a lack of electricity at the ground. In all honesty it sounds like a horrible place, let alone the distance it would be from Coventry. The Bescot Stadium in Walsall has also been talked about quite strongly, has an 11,300 capacity, which would fit the number of fans still bothered to go to games next season, and has a very nearby train station. St Andrew’s, Birmingham City’s home ground, has been mentioned, capacity 30,000 so I imagine there might be one or two empty seats next season. The only other one that has been talked about seriously has been Hinckley’s De Montford Park Stadium (Greene King for those who like a bit of advertising) which seats 630 with an additional standing room of 4,000. It seems a bit too small and far away for those fans who remain loyal and is probably a bit of a non-starter.
For me I’d prefer to remain at the Ricoh, or at least in Coventry and Warwickshire, it seems like the natural homeland of the club and would feel eery and awkward to venture outside it, especially to a rival club’s home ground. Although Inter and Milan do it, they are at least in the same city and that’s largely what the fans have known. It would feel alien to suddenly rock up in those red seats at Walsall.