20th Jun, 2019

Coventry City off to Birmingham City as Ricoh Arena talks collapse

Les Reid 7th Jun, 2019 Updated: 7th Jun, 2019

COVENTRY City are to announce they are off to Birmingham City for next season as Ricoh Arena talks have collapsed, our sister paper The Coventry Observer has exclusively revealed.

The club and its owners Sisu believe Ricoh owners Wasps rugby club’s final conditions as an ultimatum for extending tenancy arrangements are “undeliverable” – and could bankrupt the club.

A statement is expected later today.

The Coventry Observer revealed on May 26 that the club had agreed a one-year deal to play at Birmingham’s St Andrew’s as an unwanted fall-back position, if stalling Ricoh talks ultimately failed.

We also revealed last month that Wasps’ conditions included insisting that Coventry City/Sisu must underwrite – and pay for – any Wasps losses that could potentially flow from Sisu’s complaint to the European Commission concerning Coventry City Council’s 2014 deal to sell the Ricoh Arena to then London Wasps.

It was sold on a massively extended 250-year deal not offered to the football club for which the stadium was built after the Highfield Road ground’s sale – amid a protracted multi-party dispute.

We understand Wasps were also seeking in the collapsed confidential talks other indemnities and protections against other potential losses for the rugby club – and related parties.

Coventry City had – before last month’s agreement with Birmingham City – faced an English Football League (EFL) extraordinary general meeting in which member clubs could have voted to expel the club – if it had no ground to fulfill its fixtures next season.

The club said this week it was facing an imminent EFL deadline for confirming where it will play its home games next season.

It is not known if any arrangements could conceivably allow for a quick return to playing at the Ricoh Arena – should the deadlock ultimately be resolved.

The club had unexpectedly returned from Northampton Town’s Sixfields stadium shortly after the start of the 2014/5 season after a one-year sojourn – when the council had been secretly negotiating to bring Wasps in as owners behind Coventry City’s backs.

The timescale is not known for the EC’s investigation – which cannot be simply pulled – into whether the Ricoh sale was ‘state aid’, an unlawful use of taxpayers’ money which broke EU rules designed to ensure fair market competition.

The highest domestic courts – including the Supreme Court in April – have ruled against the case, which could have potentially forced Wasps, already £55million in debt, to pay back £28million to the council.

The football club said in a statement last month its owners had agreed during the Ricoh Arena talks that it would not take any legal action directly against Wasps.

The Ricoh Arena had remained the club’s priority, where a commercial deal had been agreed weeks ago to extend the Sky Blues’ tenancy for a further two years – until talks hit deadlock over the EC Complaint, initially lodged in February.

Playing outside but near Coventry in Birmingham has not been considered desirable for the club or fans. Some fans have said one compensation is that it has a better football playing surface than the rugby-affected Ricoh, which Mark Robins and players repeatedly said last season hindered their fast attacking game.

Last month, Wasps had returned to public threats to lock out Coventry City from the stadium built for it.

A statement last month on CCFC’s website said that in mid-April, SISU “signed an undertaking to irrevocably cease all proceedings against Wasps relating to the sale and lease of the Ricoh Arena, in order to allow talks about extending our agreement at the Ricoh Arena to take place.”

It continued: “Wasps stated their position publicly yesterday, reiterating their previous opposition to legal action and now adding their opposition to any other action around the sale of the stadium in 2014, and their opinions surrounding the EU complaint.

“Nick Eastwood (of Wasps) said yesterday: ‘Regrettably, this means that the condition set out above for us to enter or continue discussions with CCFC has not been met.’

“The condition referenced yesterday by Nick has not been broken, but instead yet more onerous and undeliverable conditions have been added by Wasps to their pre-existing conditions to enter talks.”

Wasps have alleged they entered the talks in good faith but the EU complaint had potentially the same risks and outcomes as the previous legal action upon which they had refused to enter talks for months.

The case is that the council shortchanged city taxpayers with an undervalue stadium sale totalling around £20million (including buying out a £14.4million loan).

Should it ever be established that the deal was indeed a ‘state aid’, it might arguably pave the way for separate compensation claims affecting the council and Wasps by parties damaged by the state aid.

The October 2014 sale of the Ricoh management company Arena Coventry Limited by former joint owners the council and Alan Edward Higgs Charity – with the council remaining freehold owners – came with public commitments by council leaders and then London Wasps that the security and future of Coventry City Football Club would be protected.

* More to come.

 

UPDATE: 12.17pm.. Coventry City have now confirmed the news by publishing the following on their website..

“Coventry City Football Club can confirm that it will groundshare at Birmingham City’s St Andrew’s Trillion Trophy Stadium for the 2019/20 season.

The Club has delayed any stadium announcement in the hope that a deal could be agreed with Wasps to play at the Ricoh Arena. The deadline has passed and unfortunately there has been no agreement. To ensure we fulfil our home fixtures and therefore retain our place in the EFL, CCFC will be groundsharing next season.

We know full well that this is a very sad day for Coventry City Football Club, the City of Coventry, Coventrians and most importantly Sky Blues supporters.

We are incredibly disappointed and extremely frustrated that continuing differences between our owners SISU and Wasps, and also Coventry City Council, could not be set aside to allow for a deal to play the Club’s home games at the Ricoh Arena. The Ricoh Arena is the stadium built to be the football Club’s home, and our fans should be able to watch their team play in the City that we are proud to represent.

We have said previously and continue to state publicly and clearly, the Club’s willing intention to do a deal to stay at the Ricoh Arena. However, in order for a deal to be agreed between landlord and tenant, the conditions for the deal need to be deliverable by the tenant. What the landlord requested of CCFC’s owners and ultimately, the Club, was simply not deliverable. It can be argued that the landlord was fully aware of this.

As such, after much hard-work behind the scenes to avoid this by staff at the club and friends of the Club in our community, we now find ourselves in a groundshare situation. This is beyond regrettable.

Supporters of Coventry City Football Club are now facing, for a second time, the prospect of enforced groundshare and the decision to attend matches or not – a situation and decision that no football fan should have to ever face.

We understand the strength of feeling in regard to a groundshare. We wholeheartedly share your feeling that Coventry City should play in Coventry. This decision was our last resort and was made to ensure the Club can fulfil its fixtures next season.

We would like to thank Birmingham City and their staff for their continued support in this situation, and the wider football community and other sporting clubs who have reached out to offer their assistance.

Moving forward, we want as many fans as possible to come and support the team while we are playing our matches in Birmingham. However, we recognise that fans will make their own choices to come to games or not – and we encourage every fan to respect the decisions of all other Sky Blues supporters. As a Club we fully understand and respect the difficult choice our fans face, and we know that those who may choose not to attend, do so with a heavy heart and still in full support of their team. We also acknowledge the fact that fans who do attend may not endorse the groundshare situation, but are there to support their team.

We encourage every fan to come to watch Mark Robins’s team continue to build on the successes of 2018/2019. Mark and his staff have already recruited strongly, with five additions to date and more players lined up to join the squad. After just missing out on the Play-Offs last season, the aim is to have a team on the pitch that all our supporters can be proud of and to push for promotion once more.

Details regarding 2019/20 Season Tickets and other arrangements will be confirmed shortly.”

UPDATE: EFL statement

“The EFL Board accepts that it may be asked on occasions to consider a temporary relocation as a means for securing a Club’s ongoing participation in the competition.

“However, it remains firmly of the view that its Member Clubs should play in the towns and cities from which they take their name.

“Despite ongoing discussions to keep Coventry City playing in the City of Coventry at the Ricoh Arena, an agreement has not been reached and as a result the EFL Board was faced with the real prospect of the Club not being able to fulfil its fixtures for 2019/20 season, which would inevitably have called into question the Club’s continued membership in the League.

“This situation has placed the EFL Board in an unenviable position and as a result, it has reluctantly agreed to a ground-share option at Birmingham City’s St Andrew’s Trillion Trophy Stadium for 2019/20.

“This is a decision that has not been taken lightly and it is regrettable that the parties involved have been unable to find a suitable and sensible solution. The EFL Board calls on all parties to resolve this matter at the earliest convenience for the benefit of the City of Coventry, the Club and people living in the local community.

“A number of conditions have been placed on the Club to ensure progress is made in regard to finding a solution to getting the Club back playing in Coventry at the earliest opportunity including the payment of a £1m bond and a quarterly review in order for the Board to be updated on developments ahead of season 2020/21.

“The EFL has also received an undertaking from the Club’s ownership that they will not put forward an application to the EFL Board to permanently relocate the Club to anywhere outside the Coventry area.”

UPDATE: Birmingham City statement..

“BIRMINGHAM CITY AND COVENTRY CITY HAVE AGREED A GROUNDSHARE FOR THE 2019/20 SEASON.

The Sky Blues will play their home games at the St. Andrew’s Trillion Trophy Stadium.

“The move is necessary to ensure Coventry City fulfill their fixtures and therefore retain their status in the EFL.

“Coventry’s situation in regard the Ricoh Arena is a complex one and we have every sympathy for their plight, and that of their supporters.

“Birmingham City has been in talks with Coventry City for a number of weeks about the groundshare and we always felt it important to try and help and support our neighbours, as part of the wider footballing family in this region, however we could.

“We will work closely with Coventry City to ensure the matchday experience at the St. Andrew’s Trillion Trophy Stadium is as enjoyable and welcoming as possible in the coming season.

“Further details about the groundshare will be released in due course by the clubs.”

UPDATE: Statement from Sisu on CCFC website..

“As previously reported, Wasps insisted SISU sign a legal undertaking before they would participate in discussions with CCFC.  SISU signed this undertaking in April to irrevocably cease all proceedings against Wasps relating to the sale and lease of the Ricoh Arena.   Wasps then entered into commercial discussions with CCFC to allow the Club to continue to play for a limited time; however, not the five years we wanted.

“Following agreement on commercials, Wasps demanded a further agreement to be signed both by the Football Club and SISU.  This agreement introduced conditions that would unreasonably restrict the Club and SISU’s basic legal rights and would commit the Club and SISU to underwrite Wasps’ costs and any future damages.  This would put the Football Club at great risk and jeopardise its future and in so doing, undermine the hard-work and success the Club has achieved over the past few seasons.  Importantly, we were willing to provide an indemnity to confirm we have acted in good faith to the extent Wasps were willing to provide the same; they would not agree to such a clause. Additionally, as negotiations continued, Wasps repeatedly moved further away from their previous stances, indicating they had no desire to agree a deal.

“This is regrettable but under the circumstances an unavoidable position for CCFC; however, SISU remains committed to the long-term success of the Club.  Playing in Birmingham is not a decision we would choose or want to make; sadly the decision was made for us.  We sympathise with and sincerely apologise to all Coventry City supporters for this and the heartache caused.  We have had numerous discussions with Mark Robins to ensure the short-term ground share will provide him with a suitable location to build on last season’s success.

“Unfortunately, the Council’s decision to sell the stadium to Wasps and prevent CCFC from participating in the sale process has empowered Wasps to take this position against CCFC.

“Until Coventry City owns its own stadium, it will be at the mercy of a conflicted landlord, imposing onerous demands and conditions as a requirement for any deal.

“SISU remains committed to providing CCFC with its own stadium in the Coventry area.  We are grateful to the EFL for their support and patience in this matter and will continue to work closely with them throughout the planning and development process.  We will provide CCFC with all the assistance required to enable the Club to return to the Coventry area, in a stadium it and its fans can again finally call home.”

UPDATE:

Nick Eastwood, Chief Executive of Wasps Group, said: “This process has been as frustrating for us, as it has been desperately sad for Coventry City supporters, and as damaging as it is to the city as a whole.

“As everyone is aware, we made it a pre-requisite of talks that the owners would stop pursuing proceedings around the ownership of the Ricoh Arena. We understood the owners shared that desire based on the letter it sent to us.

“Talks began in April and we entered those discussions in good faith. Since then we have been working to get that deal over the line and we did not halt discussions even when it emerged that the owners had filed a complaint to the European Commission as far back as February but not informed us of that.

“Despite significant progress being made in the discussions, we have unfortunately been unable to reach an agreement with the owners which, putting aside the complaint to the European Commission, would deliver the fundamental principle that there would be no further proceedings about the ownership of the Ricoh Arena.

“We have talked to Coventry City supporters groups to underline our position and our desire to keep the club at Ricoh Arena. We would be prepared to continue discussions at any time if the owners are prepared to agree to the principle on which we began these discussions.

“The club wanted to stay at Ricoh Arena, we wanted them to remain here and all supporters’ groups wanted to secure their future here. This is a very sad day for Coventry.”

UPDATE: Coventry City Council statement..

Joint statement from councillor George Duggins, Leader of Coventry City Council and councillor Gary Ridley, Leader of the Opposition Conservative Group, Coventry City Council:

“We share the bitter disappointment of Coventry City fans with today’s announcement by the football club.

“The Council like everyone was hopeful that April’s Supreme Court judgment could lead to a license extension.

“While Coventry City Council has not been party to the negotiations, we understand the endless litigation in its various forms by the football club’s owners remained the barrier for a deal to be agreed.

“It is extremely disappointing that after six years of legal action – that has been tested numerous times in the courts and has been comprehensively dismissed every time – cannot now be dropped to secure the club’s future.

“We urge the football club’s owners to address this situation promptly to ensure the return of the football club to the city at the earliest possible date.”

 

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