COVENTRY’S Wasps-owned Ricoh Arena stadium has an ‘uncertain’ future after recording further operating losses of £1.4million, its directors state in newly published accounts.
The new accounts for Arena Coventry Limited (ACL) are for the year up to June 30 last year, and cover the first six months of Premiership rugby club Wasps’ ownership.
Newly published accounts for Wasps Holdings Limited for the same period, formerly London Wasps Holdings Limited, also report ongoing massive debts, with £35million owed to retail bondholders, in a scheme first revealed in the Coventry Observer; and operating losses of £2.4million.
But, unsurprisingly, Wasps’ directors point to turnover trebling to £21million in their first six months at the Ricoh, compared with the previous year when they rented Wycombe Wanderers Football Club’s Adams Park ground.
The debt is due to be paid pack to bondholders in 2022, and in the meantime Wasps has to pay out more than £2million each year in interest payments.
Wasps’ group operating losses were £2.4million last year. Increased turnover for Wasps is set against the increased costs of running such a large stadium venue.
Wasps and ACL have claimed evidence of an upward trend includes reported average 11,401 ‘home’ gates in 2014/5 (which included tens of thousands of giveaway Ricoh Wasps tickets); investment in upgrading hotel facilities; and securing major events such as MTV Crashes, Bruce Springsteen and Rihanna this summer.
But the estimated value of ACL of £48.5million on which the bond shares were issued is based on forecasts and assumptions of uncertain trading performance in the years ahead, as the accounts statement accepts.
The £48.5million valuation by independent firm Strutt & Parker sharply contrasts with the former Ricoh owners – Coventry City Council and the Alan Edward Higgs Charity – sale of their ACL shares to Wasps for a reported £5.5million.
It has caused many angry Coventry City football fans to protest the stadium, which was always part financed by the club, was sold ‘on the cheap’ in October 2014 by councillors behind closed doors – on a hugely extended 250-year lease not offered to the football club.
ACL’s operating loss of £1.409million was a slight improvement on the previous year’s operating losses of £1.429million, which partly coincided with the football club switching ‘home’ games to Northampton amid a legal dispute following Ricoh Arena ownership talks and rent non-payment.
The statement of ACL’s trading ‘uncertainty’ and reliance on the bank from ACL’s then directors – including Wasps’ David Armstrong, Nick Eastwood and Derek Richardson – contained in the newly published ACL accounts, states: “The company meets its day-to-day working capital requirments through its bank facilities.
“The current economic conditions continue to create uncertainty over (a) the level of demand for the company’s products; and (b) the availability of bank finance for the forseeable future.
“The company’s forecasts and projections, taking account of reasonably possible changes in trading performance, show that the company should be able to operate within the level of its current facilities.
“After making inquiries, the director have a reasonable expectation that the company has adequate resources to continue in operational existence for the forseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.”
The accounts also state that ACL’s Wasps owners remain optimistic of securing significant sponsorship, potentially worth several millions of pounds, from the naming rights to the stadium, an announcement on which was expected months ago.
ACL’s forecasts are also based on the hope that Coventry City Football Club will remain as Ricoh Arena tenants.
The football club’s owners continue to insist its future lies in a new stadium to bring in vital revenues from commercial stadium activities 24 hours a day, seven days a week, while – somewhat incongruously – the club’s new managing director Chris Anderson has not ruled out striking a deal over revenues with Wasps to remain at the Ricoh.
Some Coventry City fans, disappointed with the club’s collapse from a promotion-pushing position earlier this season, are now protesting to the club’s owners Sisu for more investment in the team next year than the estimated £2.5million spent on players this season.
But Mr Anderson and the owners have spoken of the need for the club to be ‘self-sustainable’ – a position which has been backed by many other fans on forums and social media- without gambling on promotion by outliving the club’s means.
Mr Anderson and the club’s owners have spoken of how being deprived of stadium revenues continues to put Coventry City F.C at a competitive disadvantage with other clubs who own their own grounds.
Some fans are now renewing their calls for a change of CCFC ownership. But there remains no clear sign of any credible investor.
Neither does there appear to be any more willingness on Sisu’s part to sell the club than when a ‘Sisu Out’ campaign, and attempts to oust them amid administration proceedings, failed in 2013, when administration cost the club 20 league points.