Questions and answers about talks on a return for CCFC to the Ricoh Arena

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Published: 07 January 2014

Questions and answers about talks on a return for CCFC to the Ricoh Arena

In early December 2013, there were numerous conflicting statements reported in the press about a possible return by Coventry City Football Club to play at the Ricoh Arena. Of course, all supporters of the Club would welcome that but the various claims and counter-claims left everyone confused and, sadly, still in the dark as to what, exactly, was and is going on.

To try to clarify the position, The Sky Blue Trust, on 3 December 2013, wrote to ACL, Coventry City Council, Otium/CCFC and the Football League, asking a number of questions of each. We have now received replies from three of the four organisations and a partial comment from Otium/CCFC.

The questions asked and replies received are all set out below:

ACL

Q1.  Have you ever asked the Football League to broker rental talks with Otium Entertainment Group Ltd? If so, when?

A1. ACL has never requested the Football League to broker rental talks with OEG.

Q2.  Did ACL ever provide proposals for the Football League to put to Otium Entertainment Group that included a rent free period for the 2013/14 season?

A2.  On 5 November 2013, ACL directly handed to Shaun Harvey CEO of the Football League, an offer letter for the Directors of Otium Entertainment Group, which was accepted by the Football League. Mr Harvey later confirmed he had passed the offer letter to Otium’s Directors. The offer provided for a rent free period commencing 1January 2014, to the end of the 13/14 season.

Q3. What period did those proposals cover?

A3.  The proposals covered the period commencing 1 January 2014 to the end of the 13/14 season, and extended to the entire 14/15 and 15/16 seasons.

Q4. Did the proposals conveyed to the Football League include any rights to match day incomes? If not, could these match day incomes be purchased by the club at extra cost?

A4. The proposals did not include any match day revenues given the rental levels offered. A previous deal including match-day revenues was rejected by the club earlier in the year. Any purchasing of revenues would be subject to discussion by ACL/Compass and the IECE JV, which ACL owns 77%.

Q5. What do match day expenses cover?  Please define the costs involved?

A5.  Match-day costs include, contributions towards the groundsman ( previously employed by the club and now by ACL), the pitch treatments, the equipment to maintain the pitch, a contribution towards match-day utilities, hygiene, maintenance
staff, waste disposal, statutory compliance, match-day stadium safety and control room management. The proposal excluded police, West Midlands Ambulance, St Johns Ambulance, medical personnel, ticketing staff, stewards as these remain an obligation of the football club, which has always been the case, and would be a requirement at any other venue. Costs for the remainder of 13/14 season would equate to £8,470 per match and for 14/15 and 15/16 seasons £12,316 per match.

Q6. Are you prepared to discuss with CCFC a new rental deal at the Ricoh Arena even on a short term basis?

A6. The tenure of the proposal is defined as short term, as it covers 2.5 years. We would be receptive to considering longer term arrangements, subject to appropriate
financial guarantees.

Q7. Have you placed any time limits on the possibility of discussions?

A7.  ACL have not imposed any time limits, however ACL continue to secure contracts
for the use of the pitch for the remainder of this season and from August 2014 onwards. In mid November the Football League advised Otium to respond directly to ACL regarding the offer made on 5 November, as of 6 December ACL had not received a response.The Football League have also advised that OEG have stated, “for the first time in over a decade Otium feel that the destiny of the club as a commercial/sustainable entity is in their own hands, which has a value to them that surpasses the lost revenues they suffer playing in Northampton.”

Coventry City Council

Q1. Has the council ever made any rental proposals to CCFC, Otium Entertainment Group or SISU? 

A1. Rent is an issue between ACl and CCFC/Otium. You will be aware already of the various offers that ACL has made.

Q2. Have the council excluded any potential option to settle the dispute?

A2. No. Many options of course would require the consent of the other shareholder.

Q3. Has the freehold interest in the Ricoh Arena site ever been valued by the Council?

A3. Not as far as I am aware, certainly not in the last few years.

Q4. Are the Council prepared to discuss further with CCFC & ACL the return of the club to the City?

A4. Yes.

Q5. Has the Council estimated the loss of revenue to the local economy of CCFC playing outside the City? If so what is the estimate?

A5. No.

The Football League

Questions

1. Were the Football League ever asked to broker talks between CCFC/Otium and ACL?

2. Who asked the Football League to broker talks and when?

3. Did the Football League receive proposals from ACL that included an immediate return to the Ricoh Arena on a rent free basis this season?

4. Were the ACL proposals (including rent free period) put to Otium/CCFC by the Football League?

5. If so, who from the Football League put the proposals to Otium/CCFC?

6. To whom at Otium/CCFC were the proposal put and when?

7. Did Otium/CCFC reject those proposals?

8. If so, what reasons did CCFC give for the rejection?

Answers
As you know, The Football League have made it a condition of continued membership for Coventry City that the Club must return to Coventry.
Throughout the dispute between SISU/Otium and ACL, The Football League has actively encouraged the parties to reconcile their differences so that we can get the club playing back in Coventry sooner rather than later for the good of the Club, its supporters and the wider community.
Therefore to answer your first two questions we took this initiative ourselves and did not need to be asked.
Ultimately, if there has been an offer from one of the parties to the other, I believe it is a matter for them to comment upon rather than The Football League. You will be aware how fraught this relationship has been without us adding to that tension.

CCFC/Otium

Questions

1. Have you ever received proposals from the Football League for them to broker talks with ACL on a rental deal of any kind?

2. If so, did the Football League proposed talks include any offer from ACL of a rent free period?

3. If so, did you inform the Football League that you rejected the proposal for talks and any rental offer? If so on what basis did you reject thoseproposals?

4. What is the business case that makes remaining at Sixfields more viable than even a short term return to the Ricoh?

5. In addition to the rent paid at Sixfields, does CCFC pay match day costs?

6. What, if any,  match day revenue does CCFC receive whilst at Sixfields?

7. Please define clearly the reasons why the only solution is for CCFC to own the freehold of its stadium?  Surely, it is income streams that are of prime importance to the football club? That doesn’t necessarily mean freehold ownership as such receipts could be secured under a leasehold arrangement.

8. Are you willing to look at anything other than freehold ownership?

9. Will Otium Entertainment Group Limited, its directors or owners enter into any discussions with ACL regarding rental agreements?

Answers:
Tim Fisher did not answer the questions. However, the following note was added to the minutes of the Supporters Consultation Group meeting on 4 December 2013:

Additional Note added post meeting following clarification from Tim Fisher.

Can you add clarity to the ‘Free’ Offer from ACL?

ACL are mixing match day costs and rent.

At Northampton, Rent includes; all stadium related first team match day services including pitch maintenance, utilities, refuse collection and covers the following facilities - the pitch, the stadium, the stadium seating, the changing rooms, hospitality suites and banqueting areas, match day staff facilities, media facilities.

The stadium also provide all catering staff, all grounds men. The licensee (the club) separately provide stewards, crowd doctor, crowd ambulance, player ambulance.

The ACL proposal comprised a license fee of per match plus match day costs, defined as charges to maintain and manage pitch, utilities, waste, hygiene, match day stadium maintenance salaries, statutory service contracts. The total is north of 12K per match. This is, of course, rent/facility fee.

What is the financial justification of playing at Northampton?
The original rationale and premise for Sixfields was the ensuring an ability to fulfil our fixtures. Without this the club would have catastrophically failed. The rationale for Northampton is not financially driven in the short term.
Any return to the Ricoh on an interim rental deal would be very difficult. Notwithstanding, the improper purpose, the un-connected creditor put down the club for a mere 200K monies owed - caused a 20 point loss and threatened the club's very existence.

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