22nd Mar, 2017

EXCLUSIVE: Mediation talks under way to keep Coventry City in city involving MPs

Les Reid 19th Mar, 2017 Updated: 19th Mar, 2017

MEDIATION talks are taking place with MPs’ involvement between parties in the long-running dispute surrounding Coventry City Football Club with the aim of keeping the club in the city, we can exclusively reveal.

Chris Heaton-Harris, Conservative MP for Daventry, is understood to be involved, and reporting to sports minister Tracey Crouch.

Coventry South Labour MP Jim Cunningham had suggested in a Parliamentary debate in October last year that the sports minister could appoint a suitable mediator, which she said she would consider.

Mr Cunningham had called for an eminent figure to get all sides together to resolve the crisis engulfing the Sky Blues.

Coventry City have already taken part in preliminary discussions and have set a three-point remit in notifying the MP they are calling for “active not passive support from Coventry City Council” regarding…

  • “Putting Coventry City front and centre-stage in the community.”
  • A future stadium solution for the football club, with the club’s preferred option remaining a return to an inner-city home at an expanded Butts Park Arena, groundsharing with Coventry rugby club in a stadium of potentially 15,000 to 25,000 capacity.
  • A future home for the club’s ‘lifeblood’ youth academy,  with one potential aim of relocating it next to a new training facility.

It is understood the Football League, Coventry City Council, and the football club’s parent company Sisu have agreed to take part in the process.

It is not known if Ricoh Arena owners, rugby club Wasps, have agreed to take part in the discussions. Last year, Wasps called off talks over a fairer long-term deal on stadium revenues with their tenant the Sky Blues, citing ongoing legal action by the football club’s parent company Sisu as the reason.

Coventry City’s current three-year tenancy deal to play home games at the Ricoh Arena – the stadium built for them which always depended financially on the club – expires at the end of next season, 2017/8.

The stadium was controversially sold to then London Wasps by Coventry City Council and the Alan Edward Higgs Charity in October 2014 on a massively extended 250-year deal not offered to the football club, following a bitter dispute over Ricoh Arena rent, revenues and ownership.

The Sky Blues have long insisted the club needs more commercial and matchday revenues from a stadium to invest in the team and make the football club more valuable, viable and competitive with other clubs. They say they received just £75,000 last year in matchday revenues, and nothing in non-matchday revenues, with Wasps benefiting from 24/7 revenues including from conferences, concerts, a hotel, and a slice of corporate catering money.

Last month, Labour council leader George Duggins – who last year ousted previous leader Ann Lucas who had once stated “hell freezes over” before a Ricoh deal with Sisu – backed protests by some fans against the club’s ‘owners’. He also last month repeated the stance he outlined to the Coventry Observer when he became leader in May last year – that there would be no talks or relationship with Sisu until the legal action was dropped.

Minutes of the October 7, 2014 meeting of Coventry City Council – in which Labour and Conservative councillors in private approved the deal to sell the Ricoh to then London Wasps Holdings Limited – show one condition of the deal had been that the football club’s “future and security” would not be compromised.

The Coventry Observer’s Save Our City campaign has called for talks to try and help resolve the multi-party dispute involving the Sky Blues, which threatens the 134-year-old club’s future.

We have since last year been calling for a Fair Deal for Coventry City Football Club on vital stadium revenues and its lifeblood youth academy whoever the owners (barring them failing ‘fit and proper’ rules).

Mr Cunningham last October made clear to the Coventry Observer he was calling for ‘any and all parties’ including the council to come together for talks involving a mediator.

We revealed last year a leaked council email which proposed to block any professional football and associated training activities for 125 years at the Butts as a condition of the transfer of the head lease, required for the expansion plans.

We also exposed then Butts head lease holder Chris Millerchip’s connections with the council and Wasps, including through his funding of the ‘Coventry – a City of Rugby’ project. It was thought he had been threatening a similar clause in any transfer of his head lease to the rugby club, now transferred.

LEGAL ACTION

The Sisu group of companies is pressing ahead with High Court action to sue Coventry City Council over the Ricoh Arena’s sale to Wasps. Wasps Holdings Limited are a named party, as are Sisu related company Arvo Master Fund, and the football club’s companies Sky Blue Sports & Leisure and Otium Entertainment.

Pressing ahead with the judicial review (known as JR2) was anticipated after the Sisu group of companies in December lost their latest appeal against a previous judicial review (JR1) judgement against them. It concerned the council’s earlier secret £14.4million taxpayer bailout, in January 2013, of the Ricoh Arena’s management company Arena Coventry Limited (ACL), which it then half owned with the Alan Edward Higgs Charity.

JR2 – which was stayed (postponed) during JR1 appeals – contends the Ricoh Arena stadium company was unlawfully sold at ‘undervalue’, given the extension on the lease from 41 years – without the council conducting all relevant prior valuations.

Wasps bought the ACL shares for around £5.5million from the council and charity, while agreeing to also pay back nearly all the £14.4million loan, minus £1million, which is contended represented the value placed on the 250-year lease.

Yet an independent valuation by Strutt & Parker for ACL had valued the Ricoh under the terms of the deal at £48million.

Multi-million pound compensation could still be sought, which could affect the council and Wasps, who in the last annual accounts were reported to be £43million in debt.

Some fans’ groups campaigning for the London hedge fund Sisu to end all association with the club after nine years have called for all legal action to be dropped.

The football club insists decisions over legal action are taken separately by Sisu, and do not involve club money.

Sisu say they have invested tens of millions of pounds in the club, which said last week there have been no credible takeover bids where proof of funds or transparency of investors. Takeover attempts failed in 2013 when administration cost the club 20 League points – and the Sisu group of companies retained control.

COVENTRY CITY COUNCIL

Coun Duggins, asked last month whether such a ‘hardline’ approach of ‘no talks’ was preventing negotiations over finding a solution – as happens in all walks of life to stop impending legal action – said: “I’m not prepared to talk with Sisu. I don’t believe I could enter into conversations with people who are about to take you to court.

“…It’s their right to pursue a Judicial Review. It’s also my right to take the stance which I believe is best for Coventry City Council, the people of Coventry and in the longer term the football club.”

Coventry City Council stands to financially benefit from Ricoh Arena profits, via a so-called ‘super-rent’ arrangement.

Coun Duggins also alleged the FA and Football League had been “utterly useless” in failing to intervene.

But football authority insiders have long recognised the role of many parties – including the council – in the dispute, which has resulted in a lack of ‘security of tenure’ of a stadium for the Sky Blues to play. And there has been no illegal or improper behaviour found for CCFC’s directors or owners to fail FA rules.

Coun Duggins was deputy leader alongside then leader John Mutton in 2012/3 when talks collapsed with Sisu over joint ownership of the Ricoh Arena, in which Sisu would have purchased the Alan Edwards Higgs Trust’s 50 per cent shares. In 2012, Sisu had withheld £1.3million rent payments which all sides accepted was too much, a factor cited in JR1 judgements which found the council had acted lawfully in bailing out ACL to protect its shares in the company.

Justice Leggatt ruled in 2014 any potential for a deal ‘fell away’ amid acrimony as no side ultimately wanted one, noting the council also had the power to block any deal over the Higgs shares.