Coventry City's owners Sisu have issued a statement about Coventry City Council trying to block them at every turn.
The statement reads:
“The owners of Coventry City FC were extremely disappointed but unsurprised to read the recent press report concerning the Council’s on-going campaign to block the development of the Club at every turn. To use its position as a freeholder to try and block a move to Butts Park Arena is a direct assault on the private ownership of the football club in any form.
“The Court actions have exposed the hypocrisy of the Council and were entirely necessary to break the stranglehold that the Council has had over the Club since the ill-fated stadium deal in 2003. SISU are not the first owners to suffer at the hands of the Council.
Contrary to its public statements, the Council was a net beneficiary from the payments made by Tesco for the land. The £21m loaned by the Council for the building of the Ricoh Arena in 2003 was repaid in full by ACL through its loan with Yorkshire Bank. The high cost of the loan to ACL, both in interest and loan repayments, meant ACL was hampered from reducing the extortionate rent that the football club had been forced to pay since 2005. One has to ask, if the loan to ACL paid for the construction and Tesco paid for the development, what did the Council actually invest and why did it end up owning 50% of the stadium in the first place?
In 2003, the Club’s then board of directors admitted that it could not afford legal advice and had no option but to accept the Council’s onerous terms.
The Club started by owning the land and should have benefitted from the overall development deal. Tesco may surely wonder where the money they paid ended up and one thing appears clear, the 50% ownership of the stadium was a windfall to the Council.
The deal in 2003 committed the Club to a lease it could not afford in a stadium it was expected to own and took the rights to F&B and non-match day revenue from the club. Since that time, Compass have made advance cash payments to fund the on-going ACL deficit, and continue to do so, most recently with an £8m received as described in the 2015 accounts.
To be successful, the Club must have a stadium where all the revenue from matches goes towards the success of the football club so the club will benefit from its own success. Even the Council has accepted this as a simple economic truth; so why the Council has repeatedly accepted this principle and blocked its achievement at every stage is a major point of concern.
Why did the Council sell its interests to WASPS, but never offer that deal to the Club? Why would it loan £14,400,000 to ACL when the Council had no capital invested (fully repaid)? And, why was ACL sold to WASPS for £5.6m with the benefit of the 250 years lease for which they paid £1m, promptly revalued to £48,500,000 and used as security to repay the £14,400,000?
It is true that early discussions have commenced to explore the potential of Butts Park as a real possibility. This site would have significant benefits for the fans and keep the Club in the City Centre. It would also bring development to an area which needs it and whilst the owners realise no site or solution will be perfect, the advantages to the future of the football club are obvious.
… Legal action has been and continues to be essential because that action is the only check on this Council’s abuses. The question whether the Council should act the way it has and whether it has gone beyond its legal mandate was always going to test the edges of the law, which it has. The hope is that the Supreme Court will recognise the public importance of this issue and review the Court of Appeal decision (that the council’s January 2013 loan of £14.4million to ACL was not unlawful). The transparency created by the proceedings is its own justification.
Those who run businesses in Coventry are entitled to do so without Government using its commercial power and resources to advance ideological or political aims or simply to destroy businesses they disapprove of. The principles which underpin the court proceedings are relevant to every business in Coventry. SISU can defend itself; others may not be able to do so.
Since the Club was acquired, three leaders have taken over an organisation that has been secretive, undemocratic and heavily influenced by executives whose advice to the Councillors has been less than full or independent. Councillors have been forced to sign confidentiality agreements and decisions, which whilst clearly of public interest, have been made behind closed doors.
A forced sale of the Club to a new owner would have perpetuated all of the same problems suffered by the Club in 2003, and it would have played into the hands of those who have caused the problems. A successful club is good for fans and owners alike and the first half of the 2016 season has demonstrated what the Club can do.
The owners will challenge the past conduct of the Council relating to the sale of ACL to the WASPS and the extension of a long 250-year lease for £1m which was then re-valued the following day for £48,500,000.
There are two separate components of this challenge. The first is to call the Council to account on what is an obvious abuse. The second is to shed light on the motives and expose the damage to the Club. The owners are very likely to refer the matter to the European Commission to request investigation.
The owners will pursue the future ownership of a stadium where the Club has the security and revenue potential to justify significant investment.
…If the decision made behind closed doors to sell to WASPS and extend the lease to 250 years for much less than the independent company Strutt and Parker valued the extended lease was lawful, then the Council should have no qualms about justifying it before a court. It should certainly not be seeking to prevent that review by exercising its commercial power to restrict future development.
The fans and people of Coventry should question the motives of any elected Council seeking to prevent public review of its past decisions by blocking the future development of the Club."
More on this - http://coventryobserver.co.uk/news/exclusive-interview-new-council-leader-coventry-city-butts-sisu-speak/