Notes of the Coventry City London Supporters Club Q&A meeting with Tim Fisher held on Thursday 31 July at the Calthorpe Arms.
Ian Davidson opened the meeting by thanking CCFC CEO Tim Fisher (TF) for attending the latest CCLSC Q&A. There were 25 members present.
Given the short notice, school holidays and work commitments a number of members were unable to be present this evening. Several, including some SBI members from around the world, had sent in questions they wanted to ask. Rather than take away the thunder of those in the room, Ian had grouped these questions into various themes. The topics were shown on the flip chart on the wall. Ian asked Tim to cover these during the meeting tonight if at all possible.
In line with our policy at CCLSC meetings, notes from the Q&A would be issued to all our members. Ian asked that those in the room did not send emails, texts or twitter messages to others about what they have heard until after these notes have been formally issued. He thanked everyone for their co-operation in this matter.
The intention of the meeting was not to go over the historical events but to concentrate on the current situation and the future of our football club. Tim said that no question was “out of bounds” and in answer to various questions from the floor covered the following:
- Situation Today
CCFC were clear that they wanted a short term deal to return to the Ricoh whilst they built their own stadium. There was a sense that a deal could be done and any perceived stumbling blocks could be overcome.
It was critical that the club has access to its own revenue. CCFC is the only football league club which does not have access to match day revenues beyond ticketing.
If it was the will to do a deal then it was 100%/0% but skewed logic and local politics meant that the likelihood of achievement reduced to say 70%/30%.
- Legal action
The judge had made a number of damming comments about SISU in his judgment which cannot go unanswered. The appeal was out of the club’s hands. It was explained that a new governance structure had been established for the Portfolio Company and Otium was subsequently at arm’s length from the legal case. In effect Chinese walls had been put into place between the Club and the creditor/investor.
The issue on the £590k payment to ACL was discussed. The £590k figure is wrong and arose from the non agreement of the CVA. The gross figure had been determined by Mr Appleton (the Administrator) and is less than the figure claimed by the Council. The net figure – accounting for the cost of the liquidation means that the monies owed to ACL is significantly less than the figure quoted by ACL.
The Football League (FL) has its own insolvency laws and the gross and net figures need to be considered. This gross figure has been deposited with the FL, as an act for good faith, in an escrow account. It is frustrating to all that the decision on the amount will not be known until the 7 or 8 August.
Why did the Council vote down the CVA? The logic was still not clear. As Steve Waggott said in the press earlier this week the psychological effect on the club of losing 20 points in the last two seasons should not be underestimated.
Hopefully, once the amount agreed by the FL is paid to ACL they will then enter into a commercial deal for the 3 years it will take to build the new stadium.
- Long Term Deal
The new stadium will happen. The club must own its own revenue streams. Financial Fair Play (FFP) is at the very heart of the development of the club. FFP is a rule and not a nice to have. The cost of the squad is driven by a simple equation which is driven by the quantum of revenues.
Two pieces of land of land are under consideration for the stadium. One is to the north of the city and the other to the south. Both have different economic drivers. Discussions with the land vendor have been protracted, because at one time, the vendor put the deal on hold because they wanted to see through the outcome of the judicial review. They are now fully re-engaged. Discussions with transport consultants are currently taking place.
We did bid for land at Ryton (the old Peugeot site) but were out bid because of the site value for Prologis. The land sold for £650K per acre which is extraordinary.
Planning permission would require the club to demonstrate a need. TF was asked how confident he was on this. TF talked through the inward investment, employment and community uplift to the area.
- Short term deal
The Club must maximise match day revenues in any short term deal. Northampton Town FC have been very supportive and a good landlord. It was likely that the club will kick off the season at Sixfields, but the Club recognised that the emotional and economical rationale of a short term deal to play this season at the Ricoh, whilst the new stadium is being built. Healing and reconciliation is the driver.
The various revenues that were available were discussed. Match day food, beverage, match day car parking and other in bowl commercials.
On F&B, Compass has a long dated contract with IEC Experience, but this was for ACL to resolve as the club is not a counterparty to the deal between ACL and Compass. It was reasonable for the club to have access to F&B generated by its supporters on the days the Club was renting the stadium.
Why not just buy the Ricoh and not build a new stadium? You must take into account the intrinsic and the extrinsic value. The extrinsic value is driven by the fact that the club wouldn’t have to be a tenant of such a council. The freehold is not for sale. A 125 lease was discussed in the original deal proposal with the Council but their view was that they “will simply not deal” with a hedge fund. Inward investors to the City are generally not encouraged by this stance by a local Council.
The Council have announced redundancies and other cost cutting measures and could not the Club go back on this basis? This has no impact on the Council considering a deal – as they were offered such a deal two years ago. Nothing has changed. TF was clear that “the Club would be looking beyond recent relationship challenges and be working hard to agree a deal with the Council and ACL for the overall betterment of Coventry City Football club”.
- Players
The playing budget needed to take account of FFP. The squad could use 60% of allowable revenues and any equity injections. An example of the money from the Arsenal game last season was given.
There was discussion about how the money from Wilson, Christie and others who had left the club was used. The Football budget was discussed and it was noted that it is not only about getting players in and supporting the wage budget but about financing players leaving. Those leaving often had to agree a compromise agreement. The budget Steve Pressley had for this season could be used for transfer fees or wages.
The Clubs player wages this season was slightly up on last season.
Other Clubs were discussed and a comparable of Sheffield United was given. Big club, big stadium and Sheffield United’s turnover was hugely in excess of CCFC’s likely turnover even at the Ricoh. This gives Sheffield United a material competitive advantage. If we returned to the Ricoh with extra crowds, this would help towards FFP, but after an initial spike it was anticipated average crowds of 11 to 12k would still only generate a turnover of something like 2/3 of that of Sheffield United and hence the Club needs access to all revenues beyond ticketing.
TF was asked if we were to look forward 12 months and we had no Callum Wilson to sell, and no deal to return to the Ricoh, what would the budget be? The objective was for the club to be cash flow neutral and living within its means before selling any players. Overall there is a deflationary cycle in League One wage bills. You are getting much more for your money these days.
Also the academy, which the Club funds, is producing good talent which is progressing to the first team.
- SISU Business plan
Joy Seppala was ambitious and wanted success for the Club. SISU had funded the club to date and the club is in the long term business plan of the SISU/AVRO portfolio. The rumour that SISU were previously trying to get control of the Ricoh Arena and co-joining the football club and immediately flipping the combined business for some huge uplift was nonsense.
The meeting ended with one member saying that it had been widely reported that ACL didn’t need the club. TF was confident that we could strike a deal that was best for the club.