October 1st, 2016

Deal with Wasps set to keep Coventry City at Ricoh for two more years

Deal with Wasps set to keep Coventry City at Ricoh for two more years Deal with Wasps set to keep Coventry City at Ricoh for two more years
The Ricoh Arena
Updated: 10:24 am, Dec 23, 2015

AN agreement to keep the Sky Blues at the Ricoh Arena for two more years is set to be announced, the Observer can exclusively reveal.

Sources say the deal – which was expected to be signed and announced yesterday – would keep the club’s medium and long-term options open over building a new stadium or staying at the Ricoh.

The Observer understands Ricoh owners Wasps and Coventry City Football Club have reached agreement, pending signing of documents, to extend the current Ricoh rental arrangement for a further two years beyond next year.

The deal would simply see the Sky Blues taking up an existing option of extending the initial two-year rental deal struck last year – on the same terms – for a further two years up to the end of the 2017/18 season.

It comes as Coventry rugby club chairman Jon Sharp yesterday publicly confirmed our exclusive story last month that the Sky Blues have been in talks over moving to the rugby club’s Butts Park Arena city centre home in the medium term.

We also reported last month the club was likely to seek as short term a Ricoh rental arrangement as possible, while it was understood owners Wasps were seeking to tie the football club to a longer deal, possibly for 10 years.

As we have reported elsewhere on our website today, Mr Sharp yesterday faced questions concerning our story last month from BBC Coventry & Warwickshire’s Phil Upton.

Mr Sharp publicly admitted for the first time that Coventry City have looked at the Butts, that “there are discussions” and he could not speculate “what the future holds”. But he said there were no current “specific plans” for a Butts groundshare, and he listed potential hurdles that could “restrict” a groundshare arrangement.

The option of an extra two years was included in the Ricoh rental agreement in place since Coventry City returned from playing in Northampton last year. It followed a bitter legal wrangle over Ricoh Arena rent, revenues and ownership with the then Ricoh owners including Coventry City Council.

It is understood the same terms will apply, with the football club paying around £100,000 rent. The arrangement also includes the same percentage of match day car parking, and around half of match day food and drink sales on the stadium concourse.

It excludes other revenues from the stadium’s commercial activities including events and conferences, which goes to Wasps who have around £35million debt with £2million-a-year interest payments alone; and catering arrangements for which revenues go to another company, Compass.

The Sky Blues have said for years they need to own a stadium rather than rent just as Wasp have said – to add value to the business and obtain more crucial around-the-clock commercial revenues to support the team.

League rules prevent spending on players beyond a percentage of any club’s revenue, so the Sky Blues emphasise they are losing out to other clubs which own their own stadium.

New Sky Blues managing director Chris Anderson said last month the club was keeping all options open for the short, medium and long term, including building a new stadium or seeking a sustainable long-term deal at the Ricoh. He has repeated that message in the last week in an interview with popular fans’ podcast The Nii Lamptey Show/Sky Blues Blog.

Mr Anderson had told BBC Coventry and Warwickshire last month the club had identified a potential site for a new stadium “in Coventry” which had been inspected and provisionally backed by the Football League, but could not be identified for commercial reasons.

Promotion-chasing Coventry City are currently fourth in League One and are enjoying their best season for years under team manager Tony Mowbray.

Saturday’s crowd for the home game against Oldham was above 15,000, and the Sky Blues would hope for higher gates if promoted.

The club has long said the plan for a new stadium would be to begin with a capacity of around 12,000 to 15,000, and to add extensions if and when needed to above 20,000.

Coventry City Council remains the freehold owner of the Ricoh Arena. The stadium’s management company, Arena Coventry Limited, was sold to traditionally London-based Wasps in October last year by then joint shareholders the council and the Alan Edward Higgs Charity.

The deal saw Wasps move from their temporary home in High Wycombe with a hugely extended 250-year lease at the Ricoh under terms not offered to the football club.

UPDATE: December 23, 2015. The deal has now been signed and announced.

A joint statement said the deal “allows both clubs to plan ahead with certainty over the next two and a half years.”

David Armstrong (Wasps Group CEO) said: “Naturally we are very pleased that Coventry City will continue playing at the Ricoh Arena until at least the end of the 2017/18 season.  We have always said we are keen to work alongside the football club and for the Sky Blues to stay at the Ricoh Arena, which continues to be their home as well as Wasps’ home.”

Chris Anderson said: “We are pleased to reach an agreement to stay at the Ricoh Arena for the foreseeable future. I have already said on several occasions that it is important for us to have security about where we are going to play football next year and know our supporters and stakeholders join me in looking forward to an exciting second half of the season. I would only add that I appreciate the cooperative spirit in which we have come to an agreement with Wasps. I will continue to work with David and his colleagues to make the Match Day experience enjoyable for all Sky Blues supporters and visitors and productive for both of our businesses.”