The following is my take on the goings on at Coventry City Football Club over the last few days. I have no connection with the club, with SISU, Mr Hoffman or any former board members. I am a Coventry City fan and have either followed or supported the club since 1960.
The start of the new season went the way many pessimists thought it would with the young side, drastically reduced in numbers struggling to win points and therefore sitting in a very lowly position near the foot of The Championship table. The fault for the failure to win any games was not laid at the door of the manager or the players, but firmly at the door of SISU who own Coventry City Football Cub.
Judging by the comments made on social networking sites, most fans want SISU to sell up and leave, while others urge them to spend money on strengthening the squad. The current board of directors are seen by most fans as an extension of SISU and are engaged in doing their bidding at the expense of the football club. Now while I have no doubt that the current board want to succeed in taking the club forward, I do have doubts that they actually care about the club, the staff, the players and the supporters. They certainly have not given me the impression that they care about Coventry City Football Club, but I have do get the impression that they care about the business.
Onye Igwe, the man whom SISU put on the board of directors to look after their interests has admitted in an open letter to the fans of the football club that they have realised that running a football club is like running no other business and that it took them by surprise. He has also admitted that SISU made mistakes and would have done things differently had they realised, but more of that later.
In December 2007 when Ray Ranson and SISU took control of Coventry City Football Club, I for one was grateful that the club was secure for the foreseeable future and had high hopes that at last the club might be going forward. However, I did have grave concerns at the time about the club being owned and controlled by a private equity hedge fund company. I thought at the time that a football club was a strange business for a hedge fund to buy into and three and a half years later I am still of the same opinion.
Hedge funds in general and SISU in particular make their money by buying debt ridden and failing businesses very cheaply, then they make efficiency savings by cutting costs and overheads, install what they believe is a more efficient management team, turn the business round and sell it on at a profit. The problem with this model is that football needs huge capital investment in playing staff to be competitive. It is not SISU's fault that quality footballers command huge wages and transfer fees, that is one of the problems endemic in world football today and is partly responsible for the huge debts that many professional football clubs now find themselves in. However SISU should have known this and realised that they would need much more than the £30 million or so that they claim to have invested in the club if they were to make the club a success.
The events leading up up to the last day of the summer transfer window, the deadline day dealings and the open letter to fans from Mr Igwe have had an odd effect on some fans. Yesterday was all doom and gloom. Fans with their heads in hands predicting the loss of more of the better players with few, if any replacements coming in. While it is true there was media speculation that players like Turner, Clingan and Jutkiewicz would be leaving to be replaced by a striker in part exchange that Andy Thorn didn't really want, it didn't turn out that way at all.
We now all know that only Ben Turner left the club and Cody McDonald joined. During the the day Jon Parkin had a medical, but in the end he didn't join the club either because he failed the medical or couldn't agree terms, believe whichever version you want! Of course the fans were not told the size of the fee Cardiff agreed to pay for Turner, but it was widely reported to be £750,000 plus Parkin in part exchange, but Parkin, who has two years left on his Cardiff contract, didn't join so Coventry City get just the £750,000 for Turner. Sounds odd to me and I think it would be to the board's credit to clarify this situation. The actual size of fee need not be made public, but an explanation would be welcomed by the fans.
The addition of a reasonably highly regarded young striker is, of course very welcome news to all long suffering Coventry City fans, but let us not get carried away. At the end of the deadline for transfers, one player left and another joined, not quite back to square one. The club had a surplus of central defenders and a dearth of strikers, so it makes sense to sell the surplus and rectify the shortage, which the club has done. The sale of Turner was, in my opinion the right move. He hasn't played for nearly a year because of injury and the side has learnt to play without his services. He had nearly three years left on his contract so had, or should have had, a substantial cash value to the club, except it is my opinion that £750,000 for a player of Turner's ability and with three years left on his contract is far too low a fee, always assuming that it the correct figure.
The sale by Birmingham City of Scott Dann to Blackburn meant a welcome cash boost to Coventry from the sell on clause when he left the Sky Blues two years ago. If media reports are to be believed, it was the cash raised from the sale of Turner to Cardiff and the sell on fee for Dann that allowed Coventry City to reject overtures from Middlesbrough and possibly Leeds for Jutkiewicz and Clingan respectively. Which brings us on to the open letter written by Coventry City director and SISU representative Onye Igwe.
I think we can pass over the pleasantries and platitudes that open the letter, but he speaks about the Hoffman led takeover bid and to my mind he is being a bit disingenuous. It is certainly true that, as he said the “off the field events at Coventry have sadly dominated the headlines over the last couple of months and I want to use the closure of the latest chapter, namely the recent withdrawal of a much hyped takeover bid, to communicate directly with you all and address a number of important issues.”
He appreciates the frustration of the fans! Well, isn't that nice? What is he going to do about those frustrations? He tells us, again, about just how much money SISU has invested in the club, but that is nothing new and to be blunt, it is getting a bit boring now. We, as fans want to know what the future plans are not what has been done in the past. The fans, this one anyway, are frustrated at the way in which the club is being run by Mr Igwe and his SISU friends. If he really understand the frustration of the fans and wants to do something to help alleviate them, he could start by explaining where and how they are planning on taking 'our' club.
Having witnessed 'our' club be plunged into debt more times than I care to think about and how the club has lurched from one crisis to another, I am happy (if that is the correct term) that the current board are at least trying to run the club as commercially successfully as possible. That has to be the way forward for all football clubs. No business can be run where wages account for over 110% of the annual turnover. I will concede that SISU and their people on the board are, in my opinion, correct in trying to reduce the wage bill and other costs to a manageable and sustainable level, but I question their motive in doing so.
I suspect their motive for reducing costs has more to do with keeping their investment to a minimum rather than for any reason to do with the UEFA fair play initiative as they claim they are working toward.
Now we come to the more contentious issues in Mr Igwe's open letter. He said, “We readily accept that if we had our time again a number of things would have been done differently. Not in the money that we have invested and continue to invest, but in some of the decisions made and with whom we chose in the past to partner with. We have also been too distant, so when the relationship broke down with former executives, we have not been able to put our side of the story.”
What is interesting here is that Mt Igwe is saying that from the start there were differences of opinions between board members, not that it comes as a surprise, but he seems to admit that SISU would have preferred to have run the club from day one without any of the old Coventry directors such as Joe Elliott and Gary Hoffman and if they had done so, that begs the question, what state would the club be in now? This also helps explain the reluctance SISU have in negotiating with Mr Hoffman and thus sounds to me very much like sour grapes and a touch of vindictiveness by SISU.
Mr Igwe admits the board have been too distant and I fully agree with him here, they have been too distant, but what I fail to understand is why, as he claims they have been unable to put their side of the story. Who is preventing them speaking out and why? It takes two sides for a relationship to break down and it is not to his credit to blame the other side. He is claiming that SISU has been unable to put their side of the story but has written an open letter in which he could quite easily have put his side of the story, but either chose not to, or was prevented from doing so.
I particularly like his comment, “We like to empower the management teams to run operations and do not take an active public role. It is clear that this business style does not work in football. Since March the agenda should have been set by the Club and owner, building bridges with our supporters and other stakeholders in the City. Unfortunately our distance has allowed others to promote their own disruptive cause, damaging the Club as a consequence.”
The use of the little word “we” tells us that Mr Igwe works exclusively for the benefit of SISU and not for the benefit of Coventry City Football Club. “We like to empower the management teams to run operations and do not take an active public role.” Yet when they did just that, they didn't like it and engineered to removal of Gary Hoffman, Ray Ranson and Joe Elliott and bought in their own 'yes' men to do their bidding.
“It is clear that this business style does not work in football. Since March the agenda should have been set by the Club and owner, building bridges with our supporters and other stakeholders in the City.” The people they got rid of already knew that running a football club was different to running a capital equity company, that presumably was why they were there in the first place, but SISU wouldn't allow them to run a football club as a football club has to be run if it were going to be able to compete in the league. As for building bridges, getting rid of Joe Elliott was the most spectacular example of what not to do if you want to build bridges and the subsequent anti SISU feeling among fans can be traced back to this incident.
Mr Igwe then went onto say, “Unfortunately our distance has allowed others to promote their own disruptive cause, damaging the Club as a consequence. This has also undermined the good work done by the new management team to recover from past losses.” I think Mr Igwe is getting confused. He seems to be blaming their own inability, as he chooses to call it, to communicate with the fans as the reason that Mr Hoffman elected to assemble a consortium to alleviate SISU of the stress of ruining a football club. It is a bit rich blaming a takeover attempt by concerned fans of the club as being disruptive and thereby causing further damage and undermining the good work by the SISU controlled board when the new board appear to have done nothing to advance the club other than to introduce more board members, a move that has bewildered many fans.
The ignorant fans, and they are ignorant because of SISU' inability to inform them of what has been going on cannot see any sign of good work by the current board. They can see no sign of any of the investment needed to make the club competitive. The fans did see a glimmer of hope when someone who knows the club inside out and cares for it in a way that SISU do not, assembled a consortium of investors prepared to take the club on only to be rebuffed in an underhand manner by the very people currently charged with running the club by apparently leaking to the press details that should have remained confidential during negotiation. The takeover bid may well have been flawed, I don't know, it was almost certainly unacceptable to SISU because they would be lumbered with the debt they have taken on to fund their own takeover back in 2007.
Earlier in the year it was admitted that most of the debt incurred by SISU when they took control of Coventry City, was held by SISU and not the club. The club is operating at a loss and it is this loss that a prospective buyer of the club will be taking on. A new buyer of Coventry City would have to agree to take on the current debt that the club owes as well as extra investment for the manager to use as he sees fit. It would also be welcomed by most fans if a new buyer would agree to fund the purchase of all or part of the Ricoh Arena.
I might be wrong, but as I understand it SISU owe a considerable amount of money from loans taken out to subsidise the takeover of Coventry City Football Club and hold that debt in their own name, in other words it is their problem to sort out and not the football club's, so no buyer would have to, or want to pay off SISU's debts, only those held by the club in order to gain control of the club.
Mr Igwe said in his open letter, “The position of SISU is absolutely clear. We are not looking to sell but have said that we would speak with any credible investors looking to be part of a partnership with us. Talks continue on a regular basis but no truly credible party has come to the fore so far. Let me also be clear that a lot of time has been wasted by having to deal with people and parties who have promised much in public, but have delivered absolutely nothing.”
Of course Sisu are not looking to sell. The club is virtually worthless, it has no assets to speak of and the one they do have, the Ryton training facility, has been partially re-mortgaged. Mr Hoffman's £1 offer is about the value of the club in its current state, but for SISU to accept that would mean the bulk of the £30 million they used to invest in the club would still have to be paid back to their lenders by SISU.
SISU lost money last year and are not about to willingly lose more and that is why they won't sell. I don't know why they cannot find outside investors, Mr Hoffman managed to find people willing to invest, but apparently not in partnership with SISU. Of course if SISU could find outside investors they would have to relinquish some control in the board room and as we have discovered, they don't like sharing. They would also have to share the proceeds should when the time arrives when they do sell up.
The first part of Mr Igwe's letter came across to me as being negative and apportioning blame for the failures on those who no longer have any say in the running of the club. However I would like to point out that Mr Igwe has been on the board of directors at Coventry City since SISU took over, but I see no sign of Mr Igwe censuring himself or accepting any blame for himself or SISU.
Neither does he accept any responsibility later on in his letter. He does claim credit, along with the current board for introducing improvements, but fails to reveal what these improvements are.
He said, “The new Board has been tasked with improving all aspects of the Club's operations. Many improvements have been made, although most of these are not of a headline grabbing nature.” Your guess is as good as mine, I have no idea what he is talking about. Perhaps he would care to enlighten us fans.
I like the next bit though! He says, “I fully appreciate that what matters to supporters is investment on the field. Those who were previously directly responsible for our football transfer policy left the Club in a difficult situation with 11 players out of contract in June leaving us to inherit a dangerously depleted squad of players.” Yes Mr Igwe, you were one of them weren't you? Or are you blaming the manager that you employed then sacked or perhaps the former directors of the club. Maybe the directors at the time were too busy with their boardroom power struggle to take notice of what was happening with the football side of a football business.
Whoever was responsible for allowing up to 11 players run down their contracts and walk away is certainly culpable, but it wasn't all the fault only of those who are no longer involved with the club. I seem to remember it was a SISU decision to sell Scott Dann and Dan Fox as well as sanctioning the loan move of of Conor Thomas all against the wishes of those directors who have now left Coventry City. At least three of the 11 players refused the offers to extend their contracts and who was responsible for awarding one year contracts to some players, Marlon King for instance in the first place? By the time his contract was due for renewal the new board was fully in control of the club.
As for the following comments, “We want to see major improvements on and off the field, but like many of our competitors we are operating within a more practical and long term budgetary structure than in recent years. Money has been available for the club to spend this summer, and I am delighted that as well as goalkeepers Joe Murphy and Chris Dunn, Cody McDonald, a striker, was signed yesterday.”
I think I speak for all Coventry City fans in agreeing with the first part in that we all want to see improvements on and off the field. I also agree and I may differ from some of my fellow supporters here, but I believe that the club should be run in a more commercial manner than may football clubs are these days. I would like to see it run profitably if at all possible and personally speaking I would not be at all keen on having a mega rich owner subsidising the club. I know and respect other fans may disagree with me here, but that is my opinion. However I do have concerns that the way SISU is running the club, as I mentioned earlier, I suspect their motive for reducing costs has more to do with keeping their investment to a minimum rather than for any reason to do with the UEFA fair play initiative as they claim they are working toward.
I can't help wondering why, if money was available did it take until almost the last hour to get a striker if funds have been available all summer. The club had no choice to spend on goalkeepers, after Westwood left and Quirke was told he would have to leave, that only left the seemingly permanently injured Danny Ireland and the youngster Lee Burge. I do realise though that wanting and needing a certain player is not the same as being able to sign him, but I would point out that other clubs in similar financial circumstance to Coventry City did manage to attract new players. I will concede though that it is easier to attract quality players if you have a budget like Leicester City have this season.
It should not come as surprise that I treat the next paragraph of Mr Igwe's letter with a touch more cynicism. He said, “We will hopefully also be successful in attracting some quality loan players later this month to help Andy Thorn. Also, despite a number of approaches, we have declined substantial offers for Lukas Jutkewicz (sic) and, as widely reported, other players, in order to maintain our commitment to compete at this level.”
It is the very least to be hoped for that the club can attract some quality loan signings, but hoping and getting are not the same thing. It was a welcome surprise to most, if not all City fans that the club declined substantial offers for Jutkiewicz, but in reality what would be the point of buying one new striker and then selling one when the club is in desperate need of strikers. It is not necessary to take credit for making the right decision, that is what is expected.
Up until now I have been a touch scathing about Mr Igwe's open letter to the fans, but now I am intrigued by what he has to say next.
A working capital facility has been made available to the Club to support it through the final stage of the turnaround plan and major improvements and innovative ideas are expected in the coming months . Coventry City is the anchor tenant at the Ricoh Arena and it should have at least a partial stake in the ownership of the stadium where we play; everything possible shall be done moving forward to reach the right solution.
Am I correct in thinking SISU are planning to buy a share in The Ricoh Arena? Are they going to find money to fund this? Where is this money going to come from and more importantly and I am afraid I am back to the good old cynicism again, if SISU does buy a share in The Ricoh Arena, who will own it? The club or SISU? And will the Ricoh then be used as collateral to raise yet more funds in much the same way as Ryton was?
Finally Mr Igwe says, “In the coming weeks and months I shall communicate further with supporters and outline a wider vision for the club. This season though is one of transition, as we move towards a Club that is unified from the top down, both on and off the field of play. I and the rest of the Board understand that there is a lot of frustration right now and lots of work has to be done to clear this, so let me finish by reiterating that we are committed to getting it right for the Club for the long term.”
While I welcome the news that Mr Igwe intends to keep us fans informed of future visions, he also claims that this season is one of transition, when has it not been yet another season of transition, oh, I am being cynical again, sorry. I also welcome the news that there is unity throughout the club, I don't personally expect any though, but I do hope one day to be pleasantly surprised.
My last question to Mr Igwe relates to his commitment to getting it right for the club in the long term. Just what is his idea of getting it right for the club in the long term?
To conclude my musings on the recent events at Coventry City. In the transfer market yesterday, there was a tiny improvement. One player in and one out. I was sad to lose Ben Turner, but understand why he was sold and I agree with the decision, perhaps not so happy about the reported fee though. I am delighted the club has attracted a striker as one was desperately needed, I hope he succeeds at the club. However I don't see the replacement of one player with another as the panacea to cure all of the ills. I am happy that at least one director has come out and made a lengthy statement in the form of an open letter, but to my mind he has raised more questions than he has answered.
I am marginally happier in my own mind today than I was yesterday, but I still have grave concerns about the way in which our club is being run. I still don't trust SISU to run the club as a football club should be run and would prefer to see it in the hands of people who do know something about football and more importantly who care not so only about the club and the fans but for the city of Coventry.