Coventry City: a club in crisis?
The arrival of Sisu and Ray Ranson felt like a positive move at the Ricoh Arena, but things have recently become a whole lot more complicated in Warwickshire. These are worrying times for Coventry supporters, both on and off the pitch. Mainly off it, though, as Rob MacDonald from the excellent Magic Spongers blog explains.
Even for the most optimistic of Coventry City fans, the faith is proving difficult to keep. A lengthy and well-documented slide down the Championship has seen the Sky Blues win one game in their last 18. The fall from fourth place at the end of October to 20th at the time of writing means that, as is not uncommon in these parts come Easter time, early-season dreams of promotion have long since faded. But more than that, the fight for survival is now the ultimate and concerning reality.
The past decade has been turbulent. Relegation from the Premier League in 2001 saw the club target and invest in a quick return to the top flight. With a new ground to pay for – completed years behind schedule (and still yet to see a league sellout) – and a penchant for starting the season well but falling away at the last, Coventry slipped deeper and deeper into financial mire until, in December 2007, they were facing administration.
Saved from the ten-point deduction and a reported £38m debt almost at zero hour by the Sisu Capital hedge fund group, Ray Ranson was installed as chairman and the club looked forward to increased investment and the ability to hold on to its up and coming stars. Ranson also signed a cooperation agreement with stadium owners ACL for the continued use of the Ricoh Arena and hopes were high that Coventry – a one-club city, after all – was entering a more prosperous era.
But Sisu has become notorious for its propensity to keep secrets behind the scenes and recent goings on at the Ricoh Arena suggest the former knights in shining armour are in fact looking for an exit strategy. Doubtless they are not the first in the Football League to be affected by these austere times and they will not be the last. But the club has reportedly been under a Football League-imposed transfer embargo and both Coventry City Football Club Ltd and its holding company have failed to post accounts. There are a number of creditors.
This has come somewhat out of the blue and has also been prefaced by the departure of life-long Coventry fans Gary Hoffman (as vice-chairman a month ago) and Ranson himself (executive chairman, this week) from the club’s board. Ranson had been expected to stay on in a football consultant capacity until the end of the season, but stepped down from this position, and away from the club, on March 30th. Ken Dulieu, formerly Southampton chairman, has been appointed to the same role at Coventry. Paul Clouting (the former Derby County operations director) has been appointed the club’s new chief executive officer. Coventry’s actions are increasingly focused away from the pitch. Even more so, in Dulieu’s case, as he currently resides in Portugal.
Footballing issues have played their part though. Ranson had already tendered his resignation following the sales of Danny Fox and Scott Dann in 2009 and it appears he disagreed with many of Sisu’s decisions – another starlet, Conor Thomas, has since moved to Liverpool on loan with a view to a permanent deal. Speaking last week, Hoffman stated Ranson felt his hands were tied by Sisu, while the former vice-chairman felt his position similarly untenable as he quit last month. Ranson’s second (and very recent) exit, from his new role as football consultant, suggests he wants little to do with whatever regime is currently being ushered in.
With Sisu’s initial investment, Hoffman has claimed, the original model was “bringing young players in and building a team” to establish a side capable of challenging for Premier League status. This is admirable enough, but it is also idealistic and one that precious few football clubs are able to sustain as competing interests vie for investment and attention. Moreover, clubs need revenue streams to survive and without owning their own stadium – and being unable, for whatever reason, to invest in acquiring it – Coventry’s were scarce.
Sisu took over in 2007 targeting promotion, but have clearly found the going tough and expensive, and while begging the question of what they thought it would be like in football in the first place, their strategy has rapidly become more about breaking even (read: investing little while selling players) and covering costs (read: trimming wage bills). It has also recently emerged that, as well as appointing new board members, the company was forced to take out a mortgage reported to be £1m on the club’s training facilities – the only freehold property the club owns and on which they spent £500,000 revamping in 2008 – to cover costs.
While it would take a fairly big points shift for the Sky Blues to go down, relegation remains a possibility. The new board, meanwhile, have speculated that the club need somewhere in the region of £4-5m in new investment to survive to the end of the season, while stating that Sisu provided £8m on Monday (March 28th) to “stave off administration”. Elsewhere, Hoffman is rumoured to be attempting to seek investors (a venture fans hope Ranson will now join, having severed ties with the current board), but the fact that Coventry don’t own the Ricoh significantly lessens their attractiveness. The new board have promised to push to take full ownership of the stadium and seek investment to take the club to the end of the season, calling for unity and apologising for a “deplorable lack of communication” as they do so. It remains to be seen if this will be enough.
In times like these, there is little the fans can do but wait. A new advisory board is apparently being set up to improve links between the supporters and the board and hopefully it will provide them with better news before too long. However, the ongoing balance in football between the achievement everyone wants and the means available to attain it continues to be a fine one. Huge investment outside the Premier League seems to be a thing of the past, particularly when significant returns are intangible until clubs reach the top flight.
Needless to say, the season has turned on its head for Coventry and rather than a playoff challenge, the fans will no doubt settle for having a Championship club and financial stability when the season draws to a close. Reality has bitten hard.