CITY AND THE COUNCIL - AN UNFAIR PARTNERSHIP
Coventry City Council are being urged to invest some of the £30m they could make from sale of land and shares in ACL if a take over of Coventry City FC were to go ahead, to help the Sky Blues out of its current financial situation.
In what is supposed to be a partnership with Coventry City Council, the Sky Blues have become second class citizens.
Here are some of the reasons why City have been reduced to again begging the Council to help.
The move to the Ricoh Arena started the problems back in 2001. The then Sky Blues Board pumped in £20m for the land option and then sold 50% to Tesco's for £64m. That option was then lost and City were forced to buy and agree a 50/50 joint venture with Coventry City Council.
At Highfield Road, City were paying out £2.2m a year to Arena 2001 Ltd by way of Partner Revenue Contributions.
This included car parking,stand sponsorships,catering (worth around £500k a season), pouring rights and barrelage, six executive boxes,six perimeter adverts,room sponsorships, religious concerts,stadium advertising and naming rights, plus an annual rent of £1m.
Arena 2001 Ltd Partner Capital Contributions saw City put in £2m with the Council £10m. However, the ownership of the land went all to the Council under the joint venture partnership
The agreement to proceed conditions saw a return of land for leisure purposes to the Council thus wiping out the £10m,they had put in.
Arena Coventry Limited then came into being with both CCFC and the Council having initially 50% shares.
Part of this was the Value Of Revenue Contributions and meant that City have to pay just of £3m a season to cover car parking,stand sponsorships,catering (worth around £500k a season), pouring rights and barrelage, six executive boxes,six perimeter adverts,room sponsorships, religious concerts,stadium advertising and naming right. Add to this,an annual rent of £1m a year.
ACL are to pay dividends to its shareholders unfortunately, the loan to Yorkshire Bank has to be paid first and wont be paid up until 2025.
City were forced to sell their share in ACL to the Higgs Trust for £6.5m in 2004.
They were given a grant by the Football Foundation of £500,000 but Coventry City Council have demanded that this money sits in an Escro account just in case the Sky Blues don't pay their rent. Geoffrey Robinson and others have had to give personal guarantees that City will pay their rent of £1m + RPI a season.
City did try to sort out a deal over the rent offering £500k a year whilst in the Championship and £1.5m in the Premiership. This was met by ACL saying: "If you do not pay in fourteen days,we will wind you up!".
The Council's Residents Parking Scheme and the problems getting to the ground have hindered attendances at City's home games with estimates of 3,000 supporters not buying season tickets and the same number of match ticket buying supporters staying away.
This means a loss of £1.5m a season and with one partner in the partnership some £67m better off than the other, you get the picture of why City is in so much debt when the amount they have to be pay out and why the Council's help in the short term,will benefit the club and enable them to find new investors who can benefit the club,the council and the City of Coventry.
The Council called on City on Friday to sort out their debts. To help, the soon to be ex Acting Chairman Geoffrey Robinson has written off his debts but has kept his guarantees. The last thing we want is administration and the risk having to let Iain Dowie plus others in the club seek employment elsewhere.
As to what we can do to help. The club have a number of meetings with the Council,ACL,Higgs Trust etc this week and it is best to leave those in charge to get on with it. If a campaign is needed, we will all be informed.