The following is from Coventry City Football Club (Holdings) Ltd's annual report for the 31st of May 2005 and provide some useful comments.
The following is taken from the statement that appeared in those accounts by then Managing Director Paul Fletcher.
MOVE TO THE RICOH
"The Club had high hopes on and off the pitch for the move to the new stadium. In financial terms, the Club budgeted broadly in-line with the experience of other clubs moving into a new stadium, to increase its revenue by 50%. This meant that despite the loss of profits from sponsorship, board advertising and catering, the Club would nonetheless have sufficient increase in income from the major sources of revenue with which it was left - season ticket and matchday sales, merchandise and boxes - to generate for the first time in many years an operating profit and positive cash flow. £1m was due to come into the Club.
Sadly, as is now public, these hopeful plans were dashed by two factors. 1) the late opening of the stadium, and 2) our own inadequate preparations to exploit the opportunities afforded by the new stadium. The Club's estimate of the cost to it commercially from the late opening amounted to over £1m. The factors were the loss of a high profile opening friendly; the loss of our opening home fixtures particularly Norwich which would have been our first League fixture; and the loss of merchandising sales which had not been planned around a major drive to take place in the new premises.
There was one other factor that cost us dear, namely the unscheduled changes to Coventry City Council's Section 106 agreement in respect of potential parking areas. This more less doubled the size of the no parking zone and the impact on our season ticket sales was heavily adverse. We were 50% below our budget. Discussions on improving the situation continue with the Council.
However, this is not the whole story. Our own preparations were not professional or thorough enough. Had the Ricoh been ready on time we would have certainly done much better and we would have avoided the short term cash crisis that hit us. But when we look around at other similar clubs, they are better organised and obtain much higher revenues from those activities that are still with the Club.
THE CASH CRISIS
In any event, the outcome, due to this combination of factors, was that by September last year, the Club had suffered a serious cash outflow of £1m in the preceeding months and was in breach of its overdraft limit. After a difficult but constructive negotiation we have reached agreement with the Co-operative Bank to enable the club to trade with confidence for the future. I would like to thank the Co-operative Bank for their support. We have also reached agreement with Arena Coventry Limited who operate the stadium, for compensation amounting to £280,000 due to the late opening of the stadium. Whilst, this is much less than the Club considered it could have legitimately claimed, we recognise that ACL itself has suffered considerable financial losses. Further discussions continue with ACL to agree a two tier rental agreement whereby the Club pays rent of £500k in the Championship and £1.5m in the Premiership. We hope to make an announcement in the near future."