And The New Owners Are…The Old Ones

Last week saw the confirmation of what many saw coming. That SISU have re-gained control over the club following the administration process. Whilst the sale hasn’t been finalised and we remain in administration the Football League seem to be indicating that the sale will be approved. Despite the impending approval of the sale by footballing authorities there are still many questions that remain unanswered vis-a-vis the past, present and future of the club. Here are some that have occureed to me?

Concerning SISU/Otium/Administration process

As has been pointed on a recent blog by Footy Law, the notion that a company who has failed to prevent the club running at a sustainable level should be allowed to remain in charge raises serious questions for the administrator, the directors of SISU and the Football League to answer. The fact that every season since 2010/11 the club has been under a transfer embargo for failing to provide accounts on time perhaps indicates that there is at worst something that the owners are trying to hide or at best uncertainty as to how sustainable the club is as a business.

The track record for SISU’s financial management of the club seems to be fairly poor, regardless of your stance concerning the rent dispute. The failure to address the rent issue earlier indicated a lack of due diligence when SISU bought the club. The consistent transfer embargoes, player downtooling and managerial instability during SISU’s tenure indicates that their focus has been on trying to create a stable business over generating a succesful football club whilst failing to realise that the success of the football team is more important in the creating a successful business. What it all really goes back to is Coleman failing to take the club to the Premier League, which appeared to be SISU’s goal during their first few years.

After Dann and Fox were sold, the emphasis seemed to have shifted from assembling a team capable of promotion to pure and simple cost-cutting, with a few minor successes such as Keogh and Jutkiewicz in between. It seems to me that SISU have been caught between trying to cut costs and become a successful selling team. Whilst signings like Jutkiewicz and Fleck were clearly made in order to regain some transfer value they were made during times where we signed players such as McSheffrey, Wood, King and Carsley who were unlikely to have re-sale value and aside from King didn’t seem to bring anything special to help the team on the pitch. Although it would be dangerous to have a completely young team of promising players all at once it didn’t seem like the notion to develop players at the club to improve their transfer value was fully taken on aside from 1 or 2 signings every summer.

However this issue that I have with the running of the club is nothing that would prevent the Football League from ratifying the sales process. The biggest issue is that given the purely financial side of the mounting debt under SISU should be proof positive to the administrator and Football League that SISU have shown that they cannot run the club in a sustainable manner.

To flip this around though maybe the question that needs to be asked is how poor can these other offers have been that SISU’s was the best available. Perhaps it is better for the club to remain with the devil we know than to take a chance with Haskell or the Chinese consortium.

SISU this season have arguably shown that they want to correct some of their past mistakes, re-negotiating the rent, backing the managers to a fair extent in the transfer market, even the ticket prices seemed just about fair enough. Despite the club currently not having a stadium to play in SISU say they’ve got a plan to build a new one which the club would own. This is surely a preferrable situation to paying an over-priced rent as both attendances and player quality drops which could have happened if the club was sold to a someone who was willing to stay at the Ricoh given current financial fair play rules. Furthermore it could have been even worse under a new owner, who could perhaps not be able to back the team to the required level and we would return to administration at some point with bigger debts and less of an attractive proposition to purchasers.

ACL/Council

It seems to me that for a large amount of fans ACL and the council have come in for far too little of the blame in this situation. Although many say SISU put the club into administration (which is true) it ignores the fact that it was on the eve of the day where ACL asked the High Court to put the club into adminstration for them. It is also ignores the fact that ACL and the council were part of the very negotiations regarding rent that has hamstrung the club financially.

Although ACL made their reduced rent offer to the club this year you have to question how they were so willing to make a significant reduction of the rate of rent so readily. It would indicate that they accept that the club is being over-charged for the rent but also just how vital the club is to their whole business plan. The rumours recently that ACL and SISU have agreed a deal for the club to play at the Ricoh next season although false indicate that for all of the personal animosity having a football team on that pitch at the Ricoh is far more important for ACL.

Home Venue For Next Season

So the recent rumours surrounding a deal struck for the Ricoh next season indicates to me that most likely prospect is that the club remains at the Ricoh. What this means for SISU’s plans to build their own stadium is not clear but I think it makes it more unlikely. Walsall have seemingly been the go-to option but they’ve suggested that this is not something they’d be willing to do. Out of the other options it Sixfields and St Andrews look the most likely, purely down to the Football League’s stadium guidlines effectively ruling out any non-league club’s stadium.

But if it is the Ricoh then what does that mean for club going forward. If the whole administration process hasn’t divided fans then it’s gone further and uniting a large amount against SISU. For many of those the prospect of paying money to support the club now would be a tacit endorsement of everything SISU have done and be unpalatable. How many these people number is uncertain as I’m sure those who have been against SISU really want is to support their football club to success rather than force the owners out.The whole notion of ‘Not One Penny More’ or whatever is flawed in my opinion as it doesn’t really affect SISU as if the club goes to the wall or is sold after another adminstration period they lose very little compared to what the fans will if Coventry City is no more.

It does seem certain though that attendances will take another drop this season. Whether it is down to the SISU-outers or just a general sense of malaise as the club takes yet another downwards step it will be hard to truly decipher. I am sure though that should the team next season look like doing something then the fans will return like they always do when the team looks like being successful.

The Future

Although I touched upon this just above, what does having SISU back in charge mean for both the immediate and long-term future of the club. Personally I was pleased that SISU did re-gain control purely as I believed that this gave us the best chance of returning to something resembling normality at the club. This is because I thought that SISU would give us the best chance of getting out of administration the soonest because I’m sure that the sales process to anyone else would have led to ages upon ages of legal challenges, which would have been detrimental to the team for the next season.

It seems almost certain that the club will be out of administration soon enough and Pressley can get on with signing some of those players that he wants. Whether they’ll be any good is for another day but these signings are going to give us a good indication of where this club is heading. I’m not expecting any block-busting signings or anything but I believe we’ll know more about the current status of our club depending on if we sign some young, ambitious players or a load of cloggers from League 2, but that’s just me.

In the long-term however you have to question whether SISU have learned their lessons and to what end the continue to own the club for. I know little about distressed debt companies so I can’t give you much insight into their long-term objectives. Given that they are trying their best to keep the club seems to indicate that they sense that the club has potential and needs to sort out its business. I could be wrong and that they have some more malicious plans to load debt onto the club and take the first train out but given how much time and money they’ve put into the club it doesn’t seem like they’ve bought their ticket out just yet.

I do have concerns though for the long-term future of the club. This whole process has been nasty and divisive amongst supporters for the club. The crowd at the JPT match against Crewe showed to me just how desparate many are for Coventry City to be successful. The crowds after that game also indicate just how hopeless this decline for the club has felt. It’s getting really hard right now to imagine what a successful Coventry City team looks like. Given that crowds are likely to fall wherever we play then it makes the task of resurrecting the team even harder with smaller revenues.

The continuing losses that the business side makes is even more despairing to look at, it seems certain that the club has to get promoted this year to ease the financialĀ  concerns. More worrying is the sense that the club’s decline is irreversible, this coming season’s going to be tough and perhaps the onus was on the team last season to get promoted and that the financial side doesn’t add up to supporting a successful team.

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