Coventry City

by Simon Gilbert

  He said: ‘The stadium was terrific and the fans made a tremendous noise, which gave the players the confidence to go out and play.

  ‘There are certain things that need to be addressed but I’m sure they will be. This is a fantastic stadium and I’m sure that in two or three weeks time all the faults will have been ironed out.’

  But despite the excitement, there was a suggestion the club had not made the most of this move and the opportunity it presented.

  There were the obvious issues with the sale of the club’s share in the operating company, but many felt the club had failed to capitalise on the opportunity to attract a new generation of fans to the club and boost attendances in a way that many had hoped for prior to the move.

  John McGuigan said: ‘Notwithstanding their deep involvement right from the beginning and their continued input even when they no longer owned the ACL shares, CCFC never really seemed to understand the scope, scale and opportunities that the Ricoh gave them.

  ‘Even a few weeks before the first game at the Ricoh, CCFC directors and senior officials were being shown round the building as the carpets were being laid and equipment moved in.

  ‘I remember being told by several of them as we walked round the corporate facilities, bars and conference and catering areas in the West Stand “I didn’t know it would be so big.”

  ‘Upon polite questioning from me, it was quickly and surprisingly clear that they’d done very little to increase their season ticket sales, corporate hospitality engagement with the business community in the city etc.

  ‘CCFC seemed, in some ways, to be in awe of the building rather than understanding and maximising their commercial opportunities from it.

  ‘Evidence elsewhere had shown that, on average, new stadiums had delivered a 40 per cent increase in season ticket sales in their first year, but I don’t believe CCFC went anywhere near this.

  ‘Without exonerating CCFC from ineffective commercial management, it always seemed to me that, throughout this process, CCFC directors and senior management were constantly fire-fighting the impact and consequences of their dire financial situation, which had little or nothing to do with the Ricoh, ACL or the council.’

  The Higgs Charity’s Peter Knatchbull-Hugessen, also a director of ACL at this time, was also critical of the approach of the football club. He suggested animosity from the football club had played a part in a less-than-perfect working relationship. He said it had been strained after then-Coventry chairman Mike McGinnity saw his stadium seating company Pell miss out on the contract to fit out the Ricoh Arena.

  Peter Knatchbull-Hugessen told me: ‘McGinnity was invited to sit on the board of ACL but they did absolutely nothing towards the promotion of the place. All the offers to get signage installed, they refused.

  ‘As soon as McGinnity found out he could not get Pell seats installed at the stadium, he became apathetic and uncooperative.

  ‘But he also made some absolutely mad spending decisions. He wanted ACL to spend £100,000 redecorating the brand new boardroom suite that had just been decorated, which we refused.

  ‘They spent thousands installing wood panelling in the brand new changing rooms, which had perfectly good tiling. Strange decisions like that were not uncommon.’

  He added: ‘The relationship was broken under McGinnity, it was dysfunctional. [It included] swearing in board meetings because they had not bought his more expensive seats.

  ‘He used to say that ACL were only interested in ripping off the football club. He couldn’t see that ACL directors had to act in the best interests of the business.

  ‘We were already fighting them to get rent.’

  But to fans, largely shielded from the financial troubles faced by the club, the move to the Ricoh Arena was the dawn of a new era.

  The 2005/06 season was the beginning of Operation Premiership, an initiative launched by Paul Fletcher, club marketing director Ken Sharp and the club’s finance chief Mal Brannigan.

  It aimed to capitalise on the new-found enthusiasm surrounding the club following the move to the Ricoh Arena and it had a seemingly simple objective – a return to the top flight of English football within three years.

  While no doubt launched with good intentions, today the campaign has become something the club’s fans view with derision and point to as just another farcical moment in the long-term decline of their beloved Sky Blues.

  Chapter Three

  Sisu the saviours

  COVENTRY City had not long been at the Ricoh Arena when the weight of the financial difficulties facing them finally threatened to break the club’s back.

  Chairman Mike McGinnity had battled desperately to balance the books in a bid to keep the Sky Blues from going under. He is widely credited with reducing the club’s debts from a reported figure of £60m to a more manageable £25m.

  But that fight had clearly taken its toll on the then 64-year-old and, in November 2005, McGinnity made the decision to stand down as chairman.

  He later took up the honorary role of life president while Coventry North West MP and long-serving club board member Geoffrey Robinson stepped into his shoes.

  Tensions continued to increase at the brand-spanking new stadium as cracks began to appear in the relationship between the club and their Ricoh Arena landlords.

  A seemingly petty dispute over the erection of a club crest sign threatened to boil over after the club’s managing director, Paul Fletcher, gave the order to slap a five-metre tall badge on the side of the stadium. The stadium freehold was owned by the council, but the sign was erected without first seeking the permission of the local authority or their partners in Ricoh Arena operating firm ACL – the Higgs Charity.

  The rebellious act was a clever PR move by the club’s managing director, who clearly wanted to send the message that the Ricoh Arena was Coventry City’s stadium, regardless of who was running it or who owned the bricks and mortar.

  But both sides made the right noises in public as they aimed to brush the incident under the carpet.

  Speaking at the time, Coventry City Council’s John McGuigan told the Coventry Telegraph: ‘It is not a problem to us.

  ‘The sign is in the right place and is the sort of proposition that we would have supported anyway, but we are annoyed that we haven’t been asked.

  ‘We have a commitment from the football club that no more signage goes up at the Ricoh without discussion with us.’

  Paul Fletcher told the newspaper he was simply meeting supporters’ demands for the badge to be erected.

  He said: ‘I have given the council my assurance that we won’t be putting up any further signage without speaking to them.

  ‘I am delighted that the council have taken this view and I would not have taken this risk had I thought it would cause them any embarrassment.’

  With trouble also brewing in the club accounts, the board was looking for someone to buy the club. In mid-2007, it looked like there might be a new investor on the horizon. It came in the shape of consortium The Manhattan Group, which had been introduced to the club by then managing director Paul Fletcher.

  Manhattan was led by Coventry schoolboy and Sky Blues fan Gary Hopkins. The sports business consultant first became interested when he visited the Ricoh Arena on behalf of US soccer team DC United who planned to use it as a model for their own new stadium. The consortium also included US investment bankers Sean D McDevitt and Philip B Harris, as well as investment advisor and attorney Roger Marment.

  But, by October 2007, that deal had all but fallen apart. Interest rates in the US and changing business interests were publicly blamed. However, it is understood the buyers first became interested because they were under the impression they would be able to buy the club, ACL and the freehold of the Ricoh Arena as part of the deal – an offer which was never on the table and which ultimately led to the withdrawal of the bid.

  That withdrawal didn’t just signal the end of the road for Manhattan. Paul Fletcher resigned from his positio
n as managing director of Coventry City soon afterwards and Geoffrey Robinson stepped down as chairman. Fletcher signalled his apparent weariness at trying to bring all parties together and get a deal done, while Robinson suggested he needed to channel his time into his parliamentary duties.

  It was the end of Operation Premiership.

  One man who wasn’t too disappointed to see the back of Fletcher and Robinson was ACL director Peter Knatchbull-Hugessen.

  He told me: ‘Under Geoffrey Robinson, Paul Fletcher put together a business plan for the club in 2005 and it simply didn’t make sense.

  ‘It predicted the gate for the first game at the Ricoh would be 22 per cent higher than the average attendance at Highfield Road and would remain there. They didn’t do the necessary marketing. They refused to get involved in it.

  ‘Then there was the private seat licences [which gave supporters a padded seat and a name plate on their chosen seat at the stadium]. The sales were predicted to be double the number of season tickets that had ever been sold at Highfield Road. They were predicting better figures than Glasgow Rangers had got. The numbers were just bonkers.

  ‘They were expecting gates that had never been achieved.

  ‘I was told, under Robinson, some of the board were on bonuses relating to turnover, which meant the club didn’t need to make money for them to get paid. It meant they could throw money at something and it didn’t matter if it didn’t make money, they’d still get their bonuses.

  ‘I’d never heard of bonuses being paid on turnover before, but Robinson was happy with it.’

  The departure of Robinson left board member Joe Elliott to fill the chairman’s position and try to pull the club out of its catastrophic nosedive.

  Joe Elliott had been involved closely with the club from a young age after growing up with tennis friends Peter Robins and Roger Mead. Peter was the son of former club chairman Derrick Robins and Roger was the son of Phil Mead, the former vice-chairman.

  He joined the Vice Presidents Club in 1984 and was made an associate director by then chairman Bryan Richardson in 1993. After several years working closely with Mike McGinnity on the marketing and PR of the club, he was brought on to the main board in 2003.

  He said: ‘It was a decision of the heart and, as a businessman, I should probably have said no.

  ‘The club was in a mess; it had no money and it had been relegated. There was a new stadium on the way but we were beginning to lose control of that. It was a turbulent time to join the board.

  ‘I was able to bring in some serious money from sponsors. My own company put in £1m-plus and spent many years as sponsor of the youth team and half a season sponsoring the first team.’

  Having been involved with the club at the time the problems began to emerge, Elliott was in a good position to understand what had gone wrong over the past decade – and what had led the club to the brink in late 2007.

  He said: ‘The club through the 1990s had spent too much money. The club ran up tens of millions in debt. There was no doubt they were aiming to win the Premier League and with hopes of European football.

  ‘There was no money to do anything when I arrived on the board. Bryan Richardson had gone and Mike was doing his best to try and manage the terrible financial situation in the best way he could.

  ‘The main priority was keeping the football club afloat. Issues to do with the Ricoh Arena had already gone by then. We were in a situation where the Higgs Charity had taken the club’s half share and the council had stepped in.

  ‘There were no discussions over the rent to start with. We were not in a good bargaining position.

  ‘There were discussions after we had been there for a while. Had the club been in a position of any sort of strength, we might have been able to negotiate a reduction.

  ‘Things became worse when Mike had to stand down due to health reasons and then Geoffrey took over for a time before it was left to me to take over as chairman.’

  Peter Knatchbull-Hugessen confirmed the view that the rent was seemingly not a priority for successive chairmen despite the fact the club was struggling to pay it.

  He said: ‘No discussions were had about the shares in the early years. They didn’t have the money and they had problems paying the rent.

  ‘ACL had numerous discussions with them over the level of rent. Derek Higgs had suggested a scheme which would have seen the rent tiered according to gate and according to league position. In the Premier League, it would have been higher, further down the leagues lower.

  ‘But McGinnity and Robinson rejected it out of hand.’

  Asked to reflect on the situation towards the end of his board’s reign, Geoffrey Robinson said he felt the club was close to returning to the top flight and putting their troubles behind them. But it wasn’t to be, and one final throw of the dice under Iain Dowie failed to put the club on a course to battle its way up and out of the Championship.

  He said: ‘We did throw money at it, we threw effort at it. I thought we had a real chance of getting back with our last manager, Iain Dowie. But then he was hit by a lawsuit from Simon Jordan [the then-Crystal Palace chairman who had previously employed Iain Dowie] and that knocked him off his stride.

  ‘That was the whole season gone.’

  At the end of 2007, with the Sky Blues facing a seemingly insurmountable level of debt and the most likely buyer now out of the picture, it looked as though Coventry City faced the very real prospect of going into administration – and possibly out of existence.

  But buyers did emerge, with Mayfair-based hedge fund Sisu becoming the eventual owners, and former Manchester City defender-turned-businessman Ray Ranson put forward as the football brains behind the bid.

  How close the club actually were to administration has never been clear, but Joe Elliott famously said they were ‘20 minutes away’ when the deal to sell to Sisu Capital was finally stuck.

  He added: ‘I wouldn’t say we were ever on the edge before 2007, when it was critical.

  ‘Mike had done a good job trying to save the club money, Geoffrey Robinson had invested an awful lot of money and quite rightly wanted to be less committed to the monetary feeding of the club.

  ‘The Co-Op Bank were getting more concerned by the day.

  ‘The club were very close to going into administration. It really was a case of the clock was ticking on the day the Sisu deal was agreed.

  ‘The bank had been very patient and it was either the deal was done then or we would have gone into administration.’

  Interestingly, Sisu wasn’t the only show in town as the board stepped up its search for a bidder. Just how many organisations were sniffing around, who they were and how serious their interest could be considered varies depending on who you speak to.

  But from talking to many of the key players involved in the talks it seems safe to say there were at least three, and maybe four, seriously interested parties at the end of 2007.

  The Manhattan Group was no longer in the picture, but another potential investor had emerged in the shape of an unknown insurance businessman – although his interest later faded.

  There was another organisation called Shapiro, an American disaster management organisation which operated across the globe – a perfect fit, some Sky Blues fans might say, with the club spending decades lurching from one crisis to another.

  Finally, there was a group of investors called The Windsor Group, who had been brought to the table by Geoffrey Robinson.

  But between the disappearance of the Manhattan Group and the emergence of more serious offers, the club’s plight attracted a wide range colourful characters as potential suitors.

  Peter Knatchbull-Hugessen revealed: ‘There was a couple of Texans who had the hats, the boots, the belts – the full gear. They turned up shortly after Manhattan.

  ‘But they turned around and got back on a plane after one meeting in the boardroom, never to be seen again.

  ‘There was a scrap dealer from Essex who was interested. />
  ‘But as soon as they understood the size of the thing, and that it was not owned by the football club, they were gone in an instant – without exception.’

  Joe Elliott said: ‘The Manhattan Group was led by Gary Hopkins, who is a Coventry kid. He was a good guy and a friend of Daniel Gidney [then chief executive of ACL], but that one never happened.

  ‘Shapiro were very pleasant to deal with and they worked on the deal for quite a time, but ultimately that fell through.

  ‘That left Sisu, who were the last man, or woman, standing.

  ‘Sisu, for one reason or another, were the only ones who stuck. They were very enthusiastic. I started speaking to Ray Ranson, who convinced me he was the right man for the job of running the football club, and Sisu seemed to have a very solid business set up.

  ‘They put a lot of time and effort into buying the club.’

  Peter Knatchbull-Hugessen also gave me his view on the Manhattan Group. He said: ‘I think Paul Fletcher was on a percentage if he could do a deal with The Manhattan Group.

  ‘But they were a group that never provided proper proof of funding.

  ‘We, as ACL, could not go any further because they never showed us they had any money. They talked about what they had been doing in Washington, but it didn’t stack up.

  ‘Robinson was also talking them up, because he would have rescued some of his money.’

  Geoffrey Robinson has never publicly confirmed who his buyers were, but sources have confirmed that The Windsor Group was headed up by former Deloitte partner Stephen Ives. Ives had been struck off by the Institute of Chartered Accountants for fraud after an incident relating to a car purchase in March 1996.

  But Geoffrey Robinson was keen to proceed with the deal as it was the one which would have given him the greatest return and limited his personal losses after ploughing money into the club over the previous decade.

  He said: ‘I had two buyers lined up – but John McGuigan blocked the move, suggesting he didn’t think one of the people involved was fit and proper.