26th Jun, 2019

BREAKING: Coventry City agree groundshare with Birmingham City and EFL meeting cancelled with Ricoh talks stalling

Les Reid 26th May, 2019 Updated: 26th May, 2019

COVENTRY City have finalised an agreement for a groundshare with Birmingham City as a backstop to stalled Ricoh talks – and Wednesday’s English Football League (EFL) meeting has therefore been cancelled.

The rescheduled meeting could have seen a vote of league clubs on whether to expel Coventry City if it had no ground to fulfil fixtures next season.

With that potential fate in mind, the Coventry Observer has learned the club has in recent days agreed a one-year deal at the St Andrew’s home of the Championship side as a fall-back position to the Ricoh.

The club is expected to make a statement later today about the EFL meeting being cancelled.

But the Ricoh Arena remains its priority, where a commercial deal had been agreed weeks ago to extend the Sky Blues’ tenancy with Wasps for a further two years – until talks hit deadlock.

Playing outside but near Coventry in Birmingham has not been considered desirable for the club and many fans. Some fans have said one compensation is that it has a better football playing surface than the rugby-affected Ricoh, which Mark Robins and players repeatedly said last season hindered their fast attacking game.

Two weeks ago, Wasps returned to public threats to lock out Coventry City from the stadium built for it – unless the stadium’s rugby club owners are protected from a complaint by the football club’s owners Sisu to the European Commission.

It concerns Coventry City Council’s deal to sell the Ricoh to Wasps in 2014, the subject of prior legal action upon which Wasps had previously refused to enter talks – until the Supreme Court rejected the case last month.

A statement two weeks ago on CCFC’s website said that in mid-April, SISU “signed an undertaking to irrevocably cease all proceedings against Wasps relating to the sale and lease of the Ricoh Arena, in order to allow talks about extending our agreement at the Ricoh Arena to take place.”

it continued: “Wasps stated their position publicly yesterday, reiterating their previous opposition to legal action and now adding their opposition to any other action around the sale of the stadium in 2014, and their opinions surrounding the EU complaint.

“Nick Eastwood (of Wasps) said yesterday: ‘Regrettably, this means that the condition set out above for us to enter or continue discussions with CCFC has not been met.’

”The condition referenced yesterday by Nick has not been broken, but instead yet more onerous and undeliverable conditions have been added by Wasps to their pre-existing conditions to enter talks.”

Wasps have alleged they entered the talks in good faith but the EU complaint had potentially the same risks and outcomes as the previous legal action upon which they had refused to enter talks for months.

As we have reported, we understand the conditions for a Ricoh deal include indemnities for Wasps against any losses flowing from the EU complaint, and underwritings to cover any related costs for Wasps.

We also understand there has been further communication with ‘talks’ ongoing between the two sides and their lawyers this week, but the deadlock continues.

The Sisu related companies’ case – dismissed by domestic judges including the Supreme Court last month – is that the council deal broke European ‘state aid’ laws designed to prevent unfair market competition. The case is that it did so by shortchanging public taxpayers with an undervalue stadium sale on a 250-year lease term totalling around £20million (including buying out a £14.4million loan) not offered to the football club amid a protracted dispute.

The legal action had included claims Wasps – already £55million in debt – should pay back £28million to the council.

Should it ever be established that the deal was indeed a ‘state aid’ – despite rejection of that case by some of the UK’s top judges – it might arguably pave the way for separate compensation claims affecting the council and Wasps by parties damaged by the state aid.

UPDATE.

The CCFC website has now published the following statement..

Coventry City can confirm that the planned English Football League (EFL) EGM and vote regarding the club’s place in the EFL has now been cancelled

This is because the Club has met the EFL’s criteria regarding ensuring a venue for matches next season and the ability to fulfil fixtures, by now having a groundshare venue and agreement in place.

This groundshare is in place to make sure the Club has somewhere to play in the scenario of a deal to play at the Ricoh Arena not being agreed.

We can confirm that talks with the aim to achieve a deal to play at the Ricoh Arena are continuing between Coventry City Football Club, its owners SISU and Wasps Holdings Limited.

Our focus and desire is to agree a deal at the Ricoh Arena – this is everyone’s preferred option, and the right option for Coventry City. While the backup of a groundshare exists to ensure the future of the Football Club continues, another groundshare is not something anyone wants to happen.

Details of the agreed groundshare and of our ongoing discussions with Wasps Holdings Limited remain confidential, due to mutually signed confidentiality agreements.

We understand the frustration that fans are feeling, and have expressed to us, at not knowing where their Club will be playing next season, not being able to plan for next season and supporting Mark Robins and the team, and the time that this is taking.

We will provide a further update to supporters as soon as we are able to.

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