SKY Blues’ parent company Sisu were this week tightlipped on whether they will continue with legal action against Coventry City Council’s sale of the Ricoh Arena to then London Wasps in 2014, as many expect.
It follows another court defeat concerning solely Sisu’s claim that the council’s earlier secret taxpayer loan bailout of the Ricoh Arena was an unlawful ‘state aid’. The loan was agreed in private by councillors in January 2013 amid a bitter dispute over stadium rent, revenues and ownership.
It comes as council leader George Duggins last week used his first ‘Leader’s Statement’ at a full council meeting – since he ousted Ann Lucas as leader in May – partly to call on Sisu to drop all legal action. It follows defeats in the High Court, Appeal Court and now the Supreme Court over the ‘state aid’ claim.
Legal action by the Sisu group of companies over the council’s Ricoh deal with Wasps was ‘stayed’ – put on hold – pending the outcome of their action over the loan.
Coun Duggins told the council meeting: “The future is not clear but I remain adament that Sisu should drop outstanding issues and settle the established court costs that the courts have awarded – that’s all three courts.
“Now is the time for the owners of Coventry City to put together a team that the city cry out for and they thoroughly deserve.”
But Coventry City Football Club chairman Tim Fisher has repeatedly re-stated – through publicly minuted recent meetings with fans’ group the Supporters’ Consultative Group – that the club needs more commercial revenues from a stadium to invest in a competitive team, and avoid selling players to balance the books.
He claims there is a ‘political embargo’ against the club – after Coun Duggins repeatedly stated – including in an exclusive interview with this newspaper when he became leader – that there could be no relationship with Sisu until legal action was dropped.
Coun Duggins has dismissed any notion of a council political embargo. It was despite a council leaked email, revealed by this newspaper, which proposed a council block on any prospect of the Sky Blues’ preferred option of groundsharing at an expanded Butts Park Arena with Coventry Rugby Football Club.
The Observer understands protracted confidential negotiations continue between Cov rugby and its chairman Jon Sharp with former Cov player and lawyer Chris Millerchip, over the transfer of Mr Millerchip’s head lease of the Butts site.
Mr Sharp recently re-iterated the lease transfer was needed for his expansion plans, or any groundshare with CCFC which he indicated remained one possibility.
Our investigations revealed Mr Millerchip’s connections with the council, Wasps and the city’s sporting charities through his funding for the ‘Coventry – a city of rugby’ project’. Meanwhile, Premiership rugby club Wasps have cited Sisu legal action as a reason for calling off talks over any long-term deal at the Ricoh – where Wasps need to maximise revenue to tackle mounting losses and debt.
Sisu declined to comment when approached by the Coventry Observer this week over whether legal claims against the Wasps deal in October 2014, the bailout or any other council actions will continue, or be initiated.
The council and Alan Edward Higgs Charity’s shares in Ricoh company Arena Coventry Limited (ACL) were sold to the indebted London Wasps Holdings Limited for £5.5million (plus the ACL loan) on a massively extended 250-year deal not offered to the football club on which the stadium always depended, including its rent.
Recently published accounts for Wasps recorded rising losses of £3.8million and £43million debts, with uncertainty over commitments to bondholders who hold £35million of the debt, as revealed by this newspaper.
Sisu had claimed in court the council’s £14.4million taxpayer loan in January 2013 to the ACL company it half owned was an unlawful ‘state aid’ in which it gained an unfair advantage against commercial competitors – a claim dismissed by judges.
The council maintained it was protecting its stake and investment in the Ricoh company following Sisu’s refusal to pay £1.3million rent in 2012, which key players on both sides later accepted was too high.
The bailout came as talks over the Sky Blues acquiring a 50 per cent share in the stadium and access to more crucial revenues collapsed. A court in 2014 heard ultimately none of the three parties wanted such a deal, which had ‘fallen away’ amid acrimony. Failed attempts to oust Sisu through an administration process – supported by leading council figures – failed in 2013, and wrangling continues today.
So too does a campaign dating back to 2012/3 by some supporters to oust Sisu – including leaders at the Sky Blue Trust who want ‘fans’ ownership’ despite the ongoing absence of a clear plan to achieve it, with no apparent prospect of Sisu selling.
Coun Duggins, in his statement to council last week, added he “never believed for one minute the loan was state aid”. He thanked ‘colleagues’ from across the council’s political divide for supporting the bailout loan.
He said the loan was ‘morally the right thing to do’ and ‘the only game in town’, adding: “It secured the future of ACL, offered the city council an income stream but most importantly meant that an asset that the people of Coventry paid for remained for the people of Coventry.”
In fact, a net £42million of the £118million stadium was financed by a land deal with Tesco – to build the superstore at Arena Park – initiated by the football club.
That was before the council was asked to step in with just £10million and facilitate a £21million bank loan, later repaid. Money also came from European development funds and the now defunct development agency, Advantage West Midlands.
The Coventry Observer’s ‘Save Our City’ campaign has called on all sides to end the multi-party dispute and finally work towards a ‘fair deal’ on a stadium and academy whoever the club’s owners (unless they fail ‘fit and proper’ football rules).