Questions to Coventry City Football Club via the SCG
At the previous meeting of the SCG, Mr Jonathan Strange who chairs the group, repeatedly stated that very few questions are received from Supporters in relation to club affairs. The Jimmy Hill Way campaign team and other supporters who have contacted us, therefore sent a total of 18 challenging questions on a wide variety of matters which are of concern to fans. Other people also sent enquiries independently.
Rather than dealing with this correspondence at the SCG meeting, supporters’ questions were relegated to a Q&A article posted on the CCFC website. This seems to be contrary to the purpose of the Supporters Consultative Group. If this group are not participating in discussions regarding valid concerns and enquiries from fellow-fans, then exactly what is their purpose?
Of the 18 questions sent by members of the JHW campaign team, only 8 were actually addressed and of those 8, 4 were modified to change the context. SCG member Ray Stephens’s recent call to the BBC Coventry & Warwickshire phone-in (26/11/16) stated that minutes of SCG meetings are subject to editorial influence by CCFC Directors / management. We did not expect that censorship would extend to communication from supporters.
4 answers of the 8 supplied were inadequate, 3 of them largely avoiding the issues raised. The JHW Campaign does not intend to be fobbed off by such evasions. Some of the other answers provided in the club Q&A only raise further questions, so we will follow-up before their next meeting.
The full versions of the questions raised by our group is shown at the end of this briefing. We have identified where questions were abridged (deleted text), despite the fact that we requested that all questions were asked in completeness. Against each question actually answered, the response from the club has been shown, followed by observations from the Campaign team in most instances.
The last 10 questions detailed below are those to which no answer has yet been received. It is possible that some of these have been dealt with in the SCG meeting but in the absence of the latest minutes being published, we cannot know. As some of these queries were raised over a month ago, we feel that now is a reasonable time to go public.
We hope that the SCG will re-visit this matter and ensure that all questions are properly dealt with as a matter of urgency. Our football club has rarely been in such deep crisis yet Mr Strange, admittedly a competent violinist, seems content to fiddle while Rome burns, as do some others on the SCG.
This is a pity because supporters need a robust and effective mechanism that represents our interests, now more than ever. Sadly, the SCG in its present format does not appear capable of fulfilling that function.
Questions for SCG answered via Club Website
Otium (“CCFC”) Accounts – Going Concern
The Accounts to 31/05/2015 Note 1 refer to written confirmations that the group shareholders currently intend to continue to provide support to the company …. to enable the company to continue as a going concern.
These accounts were signed off in February 2016 by Mr Fisher. Would he please answer the following questions:
1. Are these assurances still in place and if so, how long until they expire? The accounts note suggests that they may expire before the end of the current season.
2. What form do these written confirmations take? Are they legally binding guarantees or merely a non-binding Letter of Intent?
Answer: The written confirmations provided to the Board of Otium and SBSL are private and confidential. The Board and the club’s auditors are satisfied with the letters. [4]
Comment: The question does not ask for disclosure of the contents of these written confirmations. It merely asks that the form of the assurances is made clear. The question regarding the expiry of these assurances has not been answered. Recent case law has cast doubt on the effectiveness of comfort letters that are not legally binding, so perhaps the club’s auditors should review the position.
http://www.onhandcounsel.co.uk/index.php?option=com_content&view=article&id=66:what-comfort-is-a-comfort-letter-recent-case&catid=7:doingbusiness&Itemid=29
Current Trading Performance
Mr Fisher recently referred to Financial Performance “heading in the right direction”. From this it would be inferred that revenues have increased and losses reduced. Please would he indicate how the performance for the year to date (from 1st June 2016) compares to the equivalent period in the previous year in terms of:
a. Revenue?
b. Operating Loss (before player trading)?
Given the commercial confidentiality of these numbers, +/- x% would be a suitable response. It is noted that attendances have fallen considerably in the early part of this season compared to the same period in 2015, so if revenue has increased, please would Mr Fisher explain how that has been achieved?
A: The provisional numbers for the year ending 31 May 2016 show that the operational loss was £1.7Mio (a YoY improvement of over £2Mio) and after player trading a profit of £700K (a year on year improvement of around £400K) was achieved. [5]
C: The question asked was in relation to the current financial year. The answer just re-states information given re last financial year and doesn’t address whether performance is improving or not.
A: As has previously been noted, the club and its staff have worked hard to put the company on a stable footing, by reducing costs and improving efficiency where possible. Revenue growth remains a challenge, one that the club is completely focused on at the moment. [6]
C: Again, the question has been ducked. Is revenue increasing or not? If so, how? If not, what specifically is being done about that?
Damian Collins’s mediation proposal
Mr Damian Collins MP, Chair of the House of Commons Select Committee for Culture, Media and Sport, has recently offered to mediate in the dispute between Coventry City and Wasps over the renewal of playing arrangements at the Ricoh Arena. These talks have broken down because of potential legal action by Sisu that may involve Wasps.
While it is totally embarrassing to Sky Blues supporters that such mediation should be necessary due to actions of the club’s owners, Sisu, any prospect of resolving this situation must be grasped without delay.
Has Mr Fisher responded to Mr Collins’s offer and, if so, what is the current position on the mediation process?
A: On 19 October, following the parliamentary debate Mr Fisher emailed Mr Collins on his official MP email address. In that email Tim offered that both he and Mark Venus meet Mr Collins in Westminster at his convenience. Tim Fisher has yet to receive a response. [7]
C: Did Mr Fisher make any attempt to chase that response? Considering the importance of this issue, it would be sensible to move matters forward with all speed. Simon Gilbert of Coventry Telegraph got a reply from Mr Collins via Twitter in 2 hours (02/12/16).
Transfer budget for January 2017
Please will Tim Fisher confirm that sufficient monies will be made available to the First Team Manager (whoever that maybe) in January 2017 to strengthen the playing squad, so that the club’s position in League One can at least be assured and to give a reasonable chance of promotion this season?
A: The first team manager has complete flexibility to work within the budget set at the beginning of the year. He has some budget still available for January. [c2]
Player Sales
In January 2016, Sky Blues supporters were appalled that James Maddison was sold just before the transfer window closed. There has been no apparent use of those funds to strengthen the playing squad since then.
Please would Mr Fisher give assurances that there will be no repeat of that occurrence by the sale of emerging talent, such as Ben Stevenson and Cian Harries, without making funds available for adequate replacement?
A: The club tries, wherever possible, to retain players to allow them to develop to their full potential, and provide much needed input into the first team. The reality of a League One club is that some players are offered greater opportunities in the Premier League/top Championship clubs.
Most importantly, the club cannot run at a loss. Any operational losses are therefore covered with a player sale. [c3]
C: Answer much as expected … though not as hoped for. Not only are Sisu not investing, the club are having to disinvest, turning assets into revenue stream. This process may be necessary but is at risk if the Academy does not produce the required talent or, worse, if the Academy is lost in 2017.
Falling Attendances
You [Tim Fisher] must be concerned about falling attendances at home games as it appears that support is significantly below last season and the budget target. Will this failure to hit required attendance levels and consequent income result in a transfer embargo, either self-imposed by the club or arising from the EFL regulations on player spending?
A: The club has enough headroom under SCMP to increase the squad in the January transfer window should the right players be available. We have no reason to think we would be placed in transfer embargo. [c10]
Sky Blue Trust “Offer”
Mr Fisher is quoted in the minutes of 12th October: “For the record and it is really important – you [the Sky Blue Trust] have sent a letter to SISU to offer to take control of the club…”
Please would Mr Fisher confirm the scale of that offer. Was it in the region of:
a. less than £5,000?
b. between £5,000 and £500,000?
c. more than £500,000?
d. No value mentioned?
In fact, were any terms proposed in the letter from the Trust to Ms Seppala?
Did the Trust actually state that it was proposing to be the Purchaser of Coventry City Football Club?
For the record and it is really important – for an “offer” to be made in this context would require clear terms to be stated, one of which would need to be a value. If the letter does not fulfil those criteria then it is not an “offer” and Mr Fisher would have been willfully misleading the SCG and Coventry City fans generally in his statements on this subject at that meeting.
A: On 7 October, SISU received a letter from a lawyer on behalf of the Sky Blues Trust. In the letter the SBT requested a meeting to discuss ‘a proposition which could enable SISU to achieve an orderly exit and in turn enable conversion of the club into a fan owned entity…’
It is unclear why it is claimed, therefore, that there was no offer made for SISU to sell the club to the Trust/another fan ownership organisation, and what other agenda could possibly have existed were any such meeting to take place. [c11]
C: The question posed was doctored and not answered. No terms and no value were mentioned in the letter, therefore it is not an “offer”. It is unclear why Mr Fisher continues to claim otherwise and to propagate misinformation in this manner.
Unanswered Questions to SCG
Political embargo re BPA
Tim Fisher has referred to a “Political Embargo” applying to possible development of the Butts Park Arena by Coventry Rugby Club, in partnership with Coventry City.
Coventry City Council have made it clear publicly that they are not applying such an embargo and that normal planning procedures would operate should a planning request be submitted.
What therefore is the real reason that this proposal is not moving forward? Is it, in fact, just another “red herring” in the continuing saga of failure by the owners and directors to develop a secure long-term home for Coventry City?
Tim Fisher’s position as Chairman
Since Mr Fisher became a Director of Coventry City Football Club and Chairman since 2014, the fortunes of the club have continued to decline. The current position includes the following matters of serious concern to supporters:
- Temporary day-hirers at the Ricoh Arena, comes to an end in 2018. Talks with landlords, Wasps, have broken down because of impending legal action by Sisu. This raises the possibility of the club, once again, moving out of the City.
- No tangible progress on a new ground despite past promises that it would be operational by now.
- Potential loss of the much-prized Academy in 2017.
- Ryton Training Ground identified for future sale for housing.
- A team struggling at the wrong-end of League One (18th position at the time of writing), although recent results have seen some improvement, when most fans were encouraged to believe that we would be pushing for promotion this season.
- A squad that lacks depth and quality in several areas.
- Loss of Tony Mowbray as manager and a club director, Mark Venus, serving as interim manager until January. (No disrespect to MV, this is just not an ideal situation and has the potential to become untenable if results take a downturn.)
- Supporters voting with their feet, meaning dwindling attendances (eg just 2,175 at the FA Cup replay on 15th November, the lowest ever for an FA Cup tie at the Ricoh) …… and very many season-ticket holders saying currently that they are unlikely to renew for next season.
Given the record of failure and mediocrity under Mr Fisher’s direction, why does he feel that it is appropriate for him to continue as Chairman?
Independence of SCG Members
According to Jonathan Strange in the minutes of 12/10/16: “the function of the Supporters Consultative Group is to represent all supporters”. It is clear that in order to represent supporters’ interests and views, members of the SCG need to maintain an appropriate degree of independence from the Directors of Coventry City.
It appears that some members of the SCG have particularly close relationships with the club Chairman, Mr Fisher. One member is regularly seen in the Directors’ Box at away games, yet attendance by this person at SCG meetings is among the worst on the Group.
Would Mr Strange agree that, for a person who is supposed “to represent all supporters”, the acceptance of hospitality arranged by Directors of the club clearly compromises their position?
Conflict of Interest
At the SCG meeting of 12th October, Ray Stephens raised the question of continuing legal action by Sisu, correctly pointing out the damage that these proceedings are doing to Coventry City Football Club. Ray referred to allegations made by Tim Fisher of a political embargo re Butts Park Arena resulting from “the legal work stream”.
Whether that is true or not, it is certainly known that negotiations for an extension of match day facilities at the Ricoh have broken down because of impending court action by Sisu against Wasps and that arrangements for the current Academy site have been adversely impacted because of the animosity caused with the Higgs charity and Coventry Sports Foundation.
Jonathan Strange responded: “So you think Joy should drop legal proceedings that she feels are legitimate?” That appears to be the Chair of the SCG defending the actions of the club owner, even when those actions are directly harming Coventry City FC.
Ms Seppala is of course entitled to make decisions that she feels to be in the interests of Sisu and its anonymous investors. However, there is a clear conflict of interest with her role as steward of our football club when her decisions have such negative impact on the prospects of Coventry City.
Surely Mr Strange and other members of the SCG must recognise that relationships between Coventry City Football Club and key partners in the City of Coventry have been severely damaged, in some cases beyond repair, by Ms Seppala’s reckless pursuit of legal action and that there can be no salvation for the club while Sisu retain ownership?
Will they support what the vast majority of supporters are demanding - with almost 20,000 signatures on the Coventry Telegraph petition - that it is time for Ms Seppala and Sisu to “Sell Up and Go”?
Otium (“CCFC”) Accounts – Interest Charged to P&L
In the minutes of the Conference Call with the SCG on 6th October, Mr Fisher stated that the club had made a profit after player trading before interest and tax in the year to 31/05/16 of £700k. Of course, this does not tell the complete story. How much interest will be charged against this profit (2015 = £1.37m), whether paid out or not, in arriving at Profit or Loss on Ordinary Activities?
Otium (“CCFC”) Accounts – Debt
What is the value of debt owed to Arvo Master Fund at 31/05/16 and currently (2015 = £10.5 million)? Has there been any:
a. further capitalisation of debt into preference shares?
b. repayment of debt, either capital or interest?
c. further issue of preference shares?
d. any increase in loans?
either in the year to 31/05/2016 or in the current financial year.
Sisu Financial Assurances
The last published accounts for Otium (CCFC) carry a statement in Note 1 that Sisu have given assurances that they will support the club financially as and when required.
As Sisu have recently downsized their operations, occupying smaller premises and reducing employee numbers, do they actually have the financial capability to meet this commitment?
Protests against Sisu
At the last SCG meeting, Tynan Scope observed that protests against the owners were largely absent last season when the club were doing well. He implied that they have only become noticeable again because the team is struggling.
“The political and legal environment hasn’t changed from a year ago – what has changed is that we’re bottom of the table.
“For the most part, no-one cared because we were doing well. Bottom of the table and everything is the end of the world.
“Are we saying if the football is good, the club is fine?”
It is not only playing matters that have deteriorated significantly since last season with problems emerging in other areas of club functions.
Will the SCG, both supporters and club staff representatives, recognise that fans generally are deeply concerned about many areas of the club:
The Academy
Ricoh Arrangements
Ryton
A club director standing in as manager
Squad inadequacies
Poor performances as well as poor results
Attendances falling drastically etc
and that our beloved CCFC has become a shambles both on and off the pitch, across the whole spectrum of club activity?
Moz Baker
I have today seen your [Jonathan Strange’s] letter in the Coventry Telegraph which indicates that you do not recognise a place on the Supporters Consultative Group for the new Chair of the Sky Blue Trust, Moz Baker.
It is my understanding that since its formation, the membership of the SCG has always included the Chair of the Sky Blue Trust. The Trust has approaching 3,000 members and is by far the most well-represented and constitutional organisation of Coventry City fans.
Please explain to me by what authority or rule of the SCG you propose to exclude Mr Baker. I do not think that you have any such mandate.
Would it not be perverse for the Chair of the SCG, a person who remained on the SCG despite relinquishing the role as Chair of the London Supporters, for which he was appointed to the SCG, to be blocking the inclusion of Mr Baker?
C: Following Jonathan Strange’s letter to the Coventry Telegraph, out of courtesy and to avoid detracting from SCG business on the night with a confrontational situation, Mr Baker twice asked JS by email whether he intended blocking his attendance .... no reply was received.
Conduct of last SCG Meeting
You [Jonathan Strange] question Simon Gilbert’s description in the CT of the “rocky relationship” between the SCG and the Trust, yet it appears from the minutes of the last SCG meeting that you sided with Tim Fisher in an attack on the Trust, Steve Brown in particular, on matters which frankly were not the remit of the meeting and were certainly irrelevant to the Agenda item under discussion. As Chairman, it was your duty to keep the meeting on point and certainly not to allow Mr Fisher to use it as a platform to pursue what I believe to be his own misleading and disingenuous agenda. Please explain to me why the meeting was not properly maintained in accordance with the Agenda rather than allowing tangential discussion that did nothing to serve the interests of supporters of CCFC. For the sake of clarity, interests = matters which are objectives, not matters in which they may have idle curiosity.
Damian Collins’s mediation proposal
Mr Damian Collins MP, Chair of the House of Commons Select Committee for Culture, Media and Sport, has recently offered to mediate in the dispute between Coventry City and Wasps over the renewal of playing arrangements at the Ricoh Arena. These talks have broken down because of potential legal action by Sisu that may involve Wasps.
While it is totally embarrassing to Sky Blues supporters that such mediation should be necessary due to actions of the club’s owners, Sisu, any prospect of resolving this situation must be grasped without delay.
Has Mr Fisher responded to Mr Collins’s offer and, if so, what is the current position on the mediation process?
A: On 19 October, following the parliamentary debate Mr Fisher emailed Mr Collins on his official MP email address. In that email Tim offered that both he and Mark Venus meet Mr Collins in Westminster at his convenience. Tim Fisher has yet to receive a response. [7]
C: Did Mr Fisher make any attempt to chase that response? Considering the importance of this issue, it would be sensible to move matters forward with all speed. Simon Gilbert of Coventry Telegraph got a reply from Mr Collins via Twitter in 2 hours (02/12/16).