Crunch time for Sky Blues and Ricoh Arena as talks stall

CRUNCH talks over Coventry City's future have reached breaking point with Ricoh Arena bosses calling the current situation unacceptable.

Stadium bosses Arena Coventry Ltd (ACL) have hit out as the club's unpaid Ricoh rent bill is about to reach £1million.

But Sky Blues chiefs have hit back amid growing tension between the club and the stadium.

Coventry City FC chief executive Tim Fisher, in a strongly-worded statement issued to the Telegraph, accused ACL of playing hard-ball because of its own high debt levels, and drops in stadium sponsorship and naming rights revenue.

ACL declined to comment on rumours its bank has called in external accountancy firm Deloitte to advise on restructuring its debts, due to financial difficulty and fears it will not be able to pay back a multi-million pound loan.

The football club has been refusing to pay rent since March, complaining it is too high. ACL now says the club's arrears are about to hit an unacceptable s1 million mark on Saturday.

It has also emerged months of negotiations have broken down over Sky Blues owner Sisu's bid to obtain a 50 per cent share in the stadium.

Coventry City Football Club, with multi-million pound annual losses, insists buying into the Ricoh Arena would be a vital lifeline for the future.

Confirmation of deadlock in sensitive negotiations over a lower rent arrangement with the two sides seemingly nowhere near agreement indicates hopes of any deal are now in crisis.

Mr Fisher accused ACL of pulling out of rent talks.

It follows this year's relegation to the third tier of English football, and months of speculation over the clubs liquidation.

The High Court in August confirmed Arena Coventry Ltd (ACL) owned equally by Coventry City Council and the Alan Edwards Higgs Charity have a legal right to call in arrears over the current s100,000-a-month rent arrangement.

Jacky Isaac, ACLs interim chief executive, said: "The board of ACL has worked patiently with the club and its owners, the Mayfair-based hedge fund Sisu, for nine months, to attempt to resolve the rent arrears issue.

"During this time no payments have been received. By December 1 there will be more than s1million in outstanding rent if no action is taken. That is unacceptable.

"The board of ACL is continuing discussions with Sisu to find a way in which the club can continue to operate on a sustainable basis.

"This must involve the payment of rent owed and the production by Sisu to the board of ACL of a workable business and financing plan to safeguard the future of the club, a future that is important to the city of Coventry and its residents."

Responding to questions about restructuring ACL's debt, she said: "The Ricoh Arena is a strong asset for Coventry, hosting a range of world-class business, entertainment and sports events throughout the year. The Olympics provided a huge boost to the entire city this summer and we continue to attract leading acts to play at the Ricoh. We have just announced Muse, the upcoming Florence and the Machine concert is a sell-out and our Christmas parties are nearly at capacity."

She also added: "The Board of ACL is continuing discussions with Sisu to find a way in which the club can continue to operate on a sustainable basis. This must involve it controlling all of its costs, and not blaming all of its financial problems on the stadium rent, which is only a small part of its overall difficulties."

Meanwhile, Peter Knatchbull-Hugessen, clerk to the trustees of the Alan Edward Higgs Charity, said talks had now stalled with Sisu over a deal for its 50 per cent stake in ACL. He said: "The charity has an obligation to maximise its assets and it must consider any serious offer for its stake in Arena Coventry Limited, subject to the agreement of an acceptable price and accompanying terms.

"Sisu has never provided these, and no discussions are taking place at this time."

To me, this is simple. Pay up or leave.

If you leave without paying what you owe, ACL ought petition for a winding up order.

Fisher is playing a very dodgy game!

Coventry MP warns of Ricoh stadium 'catastrophe'

COVENTRY MP and former Sky Blues chairman Geoffrey Robinson has warned the dispute between the club and Ricoh stadium is heading for “catastrophe”.

He criticised all parties in an increasingly bitter war of words and warned they could all be heading for “disaster, with no winners”.

He called for a “new spirit of co-operation” between the football club and its owners Sisu, and Arena Coventry Ltd - owned by Coventry City Council and the Alan Edward Higgs Charity.

It comes amid fears the club could be heading for administration or liquidation if funders Sisu pull out, after a breakdown in talks over lower stadium rent and stadium ownership – with Sisu seeking to acquire the Higgs charity’s 50 per cent of ACL shares.

Mr Robinson, who wrote off £20 million of his own money to allow Sisu to take over in 2007 when he left the club, has previously called for Sisu to leave and make way for fresh investors at the Ricoh Arena.

But he said: “I don’t believe Sisu are entirely to blame for this. The charity was never intended to have those shares in the stadium for the long term. It has held onto them for far too long. It should get out at whatever price it can.

“The council should enter into a new spirit of co-operation with the club. The original rent was far too high.

“They abused their position of power and are bringing about catastrophe with short-sighted, extortionate rent that no club can afford, and no club in Division One has to afford.

"It is a disaster, with no winners. Yorkshire Bank, ACL, Coventry City Council, the Higgs charity, Sisu, the football club. All losers.

“They should face up to their responsibilities. Sisu should put forward a sensible restructuring plan to help all those losers.”

It is understood ACL bosses have offered to halve the current £1.2million-a-year rent, and they have a legal right to demand arrears. Mr Fisher insists the Sky Blues have been paying a sixth of its monthly rent in matchday costs.

The Higgs charity says it has not received a serious offer from Sisu for the shares it obtained from Coventry City FC for a reported £6million in 2003, in a sale intended to prevent the club going into administration.

ACL said in response to Mr Robinson’s comments: “Discussions are continuing and we are working hard towards a final decision by all parties.”

ACL could wind up Coventry City Football Club, says leading councillor

RICOH stadium bosses are being left with no choice but to wind up Coventry City Football Club unless it pays its rent arrears immediately, a leading councillor says.

Deputy Conservative leader John Blundell said Arena Coventry Ltd (ACL) in which Coventry City Council has a half-stake may very soon have to seek a court winding-up order against the Sky Blues.

He said he believed ACL had until February before it hit financial difficulties, and fears it could become insolvent, with up to s1million of rent so far withheld since March.

Coun Blundell said ACLs board met yesterday to discuss what action to take after the club missed another deadline for paying up, or striking a renegotiated rent deal.

Conservative group leader Kevin Foster, has expressed concerns that the loss-making football club and its private equity fund owners, Sisu, could be deliberately running down ACLs finances to obtain a stake in the stadium on the cheap.

Sky Blues chief executive Tim Fisher this week escalated a war of words after a breakdown in stadium rent and ownership talks, by alleging ACL could be heading for administration.

ACL bosses did not deny his allegations that its main creditor, Yorkshire Bank, had called in accountants Deloitte to restructure the business amid fears ACL would not be able to service its s21million mortgage.

Coun Blundell, shadow cabinet member for finance, said: "The club have ignored deadlines, and there would be little point giving them another deadline. At some point, things have to come to a head. We are there now, or very soon.

"Unless the football club comes to an immediate arrangement and pays part or all of what it owes, ACL will be left with no choice but to go for a winding-up order.

"It wouldn't be right if ACL became insolvent and unable to pay its liabilities. All it is doing is continuing to undermine the councils investment in ACL.

"The negotiations have already taken up so much council officers' time. Sisu should come up with the goods and come to an arrangement that protects the future of the football club and ACL. It's disappointing a resolution hasn't been found. We want CCFC to continue to play at the Ricoh, but there has been enough shilly-shallying now."

Conservatives raised concerns when the council struck a deal in 2003 to build the stadium, with 50 per cent council shares in ACL, that it was an unviable business model, given the football club's finances.

ACL is understood to have offered to halve the clubs s1.2million annual rent to s650,000, with the club now relegated this year to Division One. The club wants to pay nearer s200,000, which it says would be more in line with market rates.

We revealed negotiations have broken down over the Sky Blues obtaining a 50 per cent stake in ACL owned by the Alan Edward Higgs Charity which the club claims is vital to its financial future.

It wants to access revenue from the Ricoh's commercial activities amid fears that funders Sisu could pull out, and the club could go into adminstration or liquidation.

ACL have hit back, insisting the stadium is a viable and successful business, concert and sporting venue. ACL says the football club should stop pretending its rent is a main part of its budget.

Council leaders say any deal on stadium ownership should include investment for land around the Ricoh earmarked for a hotels and leisure development to boost ACL revenue and potentially bring a return to Coventry council taxpayers.

The football club declined to comment.