To Guarantee or Not to Guarantee?
“The Ricoh is a much-loved community asset that every one of us is proud of.
“No one here has ever been prepared to sell the Ricoh Arena or the leasehold unless we can be completely satisfied our original aims can be met and include a home for the football club.
“We have always had the interests of the people of Coventry, taxpayers and local residents at the heart of any decision about future ownership of the stadium or ACL.
“Let me be clear, any deal around the future of the Ricoh Arena must not happen if it threatens the future of the Sky Blues or Coventry Rugby Club.
“We have been working with Wasps to make sure their aspirations for the club, the Ricoh and the community are right for Coventry.” Ann Lucas, October 2014
That statement by the Council Leader, on the day that the deal with Wasps was completed, has been grasped recently by CCFC Management as a drowning man grasps at straws.
It is backed up by Council Minutes of 7th October which state:
“The commitment that any deal relating to the Ricoh Arena would not be approved unless the following three tests were satisfied:
A good deal for the City
The security and future of Coventry City Football Club
The security and future of Coventry Rugby Club” Coventry City Council, October 2014
In an Open Letter to Fans published on the CCFC website, the Sky Blues Chief Executive wrote:
“It was appropriate and correct for the leader of Coventry City Council to put forward these requirements at the time of selling the Ricoh Arena to Wasps. The Council’s covenant of commitment to Coventry City Football Club was designed to reassure fans.” Dave Boddy, December 2018
He goes onto add:
“However, the future of Coventry City Football Club is now under threat.
“At the time of announcing the deal with Wasps, the Council failed to minute or present to Coventry City fans, Coventrians and the media that the Council’s covenant to secure the future of the City’s then 131 year old football club would have an expiry date and time limit of just four years…
“The council point to a ‘No deal’ outcome being a “direct consequence” of legal action by the football club owners.” Dave Boddy, December 2018
Dave makes a fair point in quoting the assurances given by the Council at the time the deal was signed off. Unfortunately, he then completely overplays his hand by references to a ‘covenant’ which Collins English Dictionary defines as: “A formal written agreement between two or more people or groups of people which is recognised in law.” According to the Legal Dictionary it is usually: “An agreement, contract, or written promise between two individuals that frequently constitutes a pledge to do or refrain from doing something.”
To the best of my knowledge, a Covenant, in that sense of a legally binding guarantee, was not created by the Council in 2014. What was stated were considerations made by the Councillors when approving the deal, intended to give comfort to fans of Coventry City and Coventry Rugby Club.
Even if such a formal arrangement had been constructed, it would not grant freedom and indemnity to a poorly behaved tenant for its own reckless actions or protection from the consequences of those actions. In this instance, it is the behavior of owners and directors of the tenant that have put a continued tenancy at risk, by:
- Attempting to distress the Landlords business to extinction through legal action;
- Repeatedly stating, over many years, that alternative solutions for a home ground are the preferred choice for the Tenant;
- Only entering into a deal at the Ricoh in 2014, immediately prior to the Wasps takeover, that was 2 years firm and 2 years optional, because the Football Club would not be staying for the long-term.
It is this third point that explains why the ‘Council’s covenant’ had ‘an expiry date and time limit of just four years’. Because that was all the time that the Sky Blues’ owner and directors had deemed necessary.
The Open Letter continues:
“What is being painted is a false choice – it does not have to be a case of the Owners dropping the legal action or there is no deal, and it is not a case of “cannot enter discussions”.
“In previous years a deal has been achieved by the football club whilst the Owners pursued legal action and that CAN be the case again.
“Regardless of the current situation between football club owners, stadium landlord and council, the Club would like to extend an offer to meet with the landlord and the Council with the intention to resolve the issue of the football club having nowhere to fulfil its fixtures from the beginning of next season.
“The Club will engage in a constructive and positive manner – with the single aim of saving our football club. The Club entirely agrees with our landlord Wasps wanting to move the situation forward for the good of Coventry City, its supporters, the Ricoh Arena and the City as a whole. The club looks forward to continuing to work together, based on the excellent day-to-day operational relationship we already enjoy.
“Equally, we extend an invitation to Coventry City Council to sit and hold constructive discussions to understand how the Council might help resolve the situation for the good of everyone involved. It would be an unmitigated disaster if the club was to fold and disappear in the very year that Coventry holds the title of being the City of Sport. We will work together with the Council to ensure that this does not happen.
“The Club is ready to sit at the negotiating table – we want to do a deal. A deal that preserves the football club. It is now time for all parties to work together for the good of Coventry City Football Club, its supporters and our community.” Dave Boddy, December 2018
There is much that I can agree with in terms of sentiment. The problems arise at a practical level:
- While it may be the owners driving the legal action, it is taken partly in the name of the club’s legal entity, Otium whose sole Director is the Club Chairman, Tim Fisher. He is also one of only two directors of another applicant, SBS&L.
- It is naive to expect Wasps to negotiate another deal when it was a condition attaching to the existing deal that court action would have to be stopped for further discussions to commence. Just because Joy Seppala and Tim Fisher have rarely lived up to their public statements, it would be foolish to expect others to be similarly spineless.
- The Council no longer has “a dog in this fight”. Any actual power to influence decisions ceased with the sale to Wasps in 2014. It would be embarrassing for the City to lose its major football club while Coventry is European City of Sport but events are beyond control of the politicians. The best that supporters could hope for is that Councillors may try to influence Wasps to a conciliatory position. However, that is a process that MPs and Government Ministers have already taken on board in respect of all relevant agencies in this dispute.
- Mr Boddy’s letter appealed for leeway from other parties yet fails to ask anything from the party with most responsibility for the impasse, Sisu Capital. The simple solution would be to desist from litigation which so far has benefited no one other than the legal profession and is seemingly hopeless, based on the available evidence.
In a subsequent Match Day Programme referring to his Open Letter, the CEO stated that:
"There was some criticism that the letter did not point to the actions of the Owners that have contributed to this impasse. The Football Club has regular communication with the Owners and we make strong representations on the current situation to them. Everyone is aware of the consequences of a no deal scenario.” Dave Boddy, December 2018
At the time of writing, it is unclear what the ‘strong representations’ consist of or whether any response has been received from Ms Seppala.
To be fair to Dave, his latest Programme notes do recognise that the owners as well as landlords have the destiny of CCFC in their hands:
“I know fans and the wider community are growing weary of the continued disputes around the club, and the jeopardy that the club finds itself in. That has been a regular state, and is even more urgent than ever this year.
“While those who made decisions through this period, even back to 1997 when plans were first presented for ‘Arena 2000’, will have made the decisions based on their best judgement of the best interests of the Club at the time, the Club is consequently now in a position where it is reliant on others – be it decisions of owners or landlords - for its future and its very survival.
“A long-term solution to provide stability to the Club and to its fans and the community needs to the aim for everyone involved, so that this same issue does not rear its head every year and the Football Club can move forward with long-term stability.” Dave Boddy, February 2019