Campaign update from the Jimmy Hill Way Campaign Group.
Coventry City FC were featured on yesterday’s BBC Radio 1 Newsbeat Programme, with supporters lamenting a “dying club”.
The feature also included comments from Tim Fisher, CCFC Chairman, who denied that description but stated that the club was “at real risk of having a downward spiral”. He also spoke on behalf of the owners, Sisu, stating: “Of course they care about the fans and they care about football. But I wouldn’t confuse caring for the football fans with wanting a break-even business.”
Now, I’m not sure what parallel universe Tim is currently inhabiting. In the one occupied by supporters who were featured on Newsbeat, we are already plummeting down that spiral at an alarming rate.
* Rock-bottom of League One;
* A playing squad that needs urgent strengthening to avoid relegation;
* The Academy in danger of closing within months;
* No long-term agreement at the Ricoh and discussions broken off by the landlords;
* No ground and no progress towards finding a site;
* Falling attendances;
* Many season ticket holders stating that they will not be renewing after this season.
The club may be “breaking even” but it is also “breaking apart” under the unfit stewardship of Joy Seppala and Tim Fisher.
In fact, the impression conveyed that Coventry City (Otium Entertainment Group Limited) is at a break-even level requires scrutiny. From previous statements by Mr Fisher, it is clear that he is referring to a financial outcome:
* BEFORE Interest has been charged on the debt owed to Arvo Master Fund; and
* AFTER taking into account profits on player trading, eg. the sale of James Maddison.
As an experienced accountant and businessman, I recognise that balancing the books is vital in any company. Ensuring that cashflow is positive over the medium term has to be a high priority. In the case of Coventry City, that objective is only being achieved by disinvesting in the playing assets of the club.
There is nothing intrinsically wrong with that process of producing young talent and cashing in on those efforts, so long as you can maintain the flow of youth development. The problem for Coventry City is that the club’s business model is dependent on being able to repeat that process year after year, as we are told that Sisu are no longer investing. Therefore, if the Academy facility closes, as seems probable at the moment, that “cash cow” will no longer be available to cover losses on day-to-day operations.
Additionally, if a significant number of season ticket holders do take the decision not to renew in Summer 2017, those normal trading losses will deteriorate, at best there will be a delay in the expected cash receipts. Far from achieving “break-even”, the future financial model for Coventry City appears challenging, to say the least.
The downward spiral that we are already in, will only get worse. Tim Fisher has openly stated that he will offset revenue reductions by cutting the playing budget. So more talent is sold, replaced by lower cost alternatives which is likely to equal poorer quality. The downward spiral becomes a vicious circle.
Had additional investment been made into the football team during summer 2016, which was what fans had been led to expect when the season ticket marketing drive was launched, we may have been challenging for promotion again and perhaps attendances would have justified that investment as the season progressed. That would not have resolved many of the off-field issues, but the overall crisis at the club would not have been so serious.
Working towards a break-even position at the expense of customer interests is a poor strategy for any company. Alienating the people that provide the major sources of revenue is almost guaranteed business suicide, commonly called “killing the golden goose”. Break-even achieved by breaking apart the club is unsustainable and can only end in tragedy for Coventry City.
That’s why supporters referred to the Sky Blues as a “dying club” and why many of us will continue to voice our complaints via protests at the way that Coventry City has been operated, until Sisu Sell Up and
Additionally, if a significant number of season ticket holders do take the decision not to renew in Summer 2017, those normal trading losses will deteriorate, at best there will be a delay in the expected cash receipts. Far from achieving “break-even”, the future financial model for Coventry City appears challenging, to say the least.
The downward spiral that we are already in, will only get worse. Tim Fisher has openly stated that he will offset revenue reductions by cutting the playing budget. So more talent is sold, replaced by lower cost alternatives which is likely to equal poorer quality. The downward spiral becomes a vicious circle.
Had additional investment been made into the football team during summer 2016, which was what fans had been led to expect when the season ticket marketing drive was launched, we may have been challenging for promotion again and perhaps attendances would have justified that investment as the season progressed. That would not have resolved many of the off-field issues, but the overall crisis at the club would not have been so serious.
Working towards a break-even position at the expense of customer interests is a poor strategy for any company. Alienating the people that provide the major sources of revenue is almost guaranteed business suicide, commonly called “killing the golden goose”. Break-even achieved by breaking apart the club is unsustainable and can only end in tragedy for Coventry City.
That’s why supporters referred to the Sky Blues as a “dying club” and why many of us will continue to voice our complaints via protests at the way that Coventry City has been operated, until Sisu Sell Up and Go or the inevitable consequences of their mismanagement have come to pass. Unfortunately, that day appears to be sooner rather than later.
PUSB
David Johnson