The big questions City face over home ground
CONFIRMATION that Wasps have entered administration and new owners are being sought for the CBS Arena poses more questions than it provides answers for Coventry City and their supporters.
What is clear is that the sporting landscape in the city is changing dramatically and opportunities abound for new investors to ride into town and take full advantage of the situation, to create a new and potentially exciting dynamic for the football club.
While many Sky Blues fans will have little sympathy for the rugby club, the loss of 167 jobs is a sad consequence of Wasps’ financial troubles and we can only hope that fresh investment will bring new employment opportunities with it.
Here we look at some of the big questions that need answering in terms of the impact on the Sky Blues in the coming weeks and months.
The Sky Blues have been given initial assurances that they can continue to play at their home stadium, but what about the long-term situation?
Under the football club’s tenancy agreement, Mark Robins’ men should be protected under the lease which means they can continue to play there for the duration of their current deal. City agreed a 10-year licence to play their home matches at the Arena until 2031, on their return from a two-year spell at St Andrew’s.
Is the football club’s rent and revenue share protected if and when the CBS Arena comes under new ownership?
The company which owns the CBS Arena is in negotiations with potential investors to take over the running of the complex and is hoping to conclude a deal in the next fortnight. Arena Coventry Limited (ACL) is not included in the administration of Wasps Holdings Limited, which was announced on Monday, and has filed a notice of intention to appoint administrators – a move which will give it two weeks to be able to secure new owners for the venue.
City are understood to currently pay £600,000 per year to play at the stadium. On their return in August 2021 the Sky Blues negotiated a greater share of matchday revenue streams and enjoy the benefits from food and beverages. That has to be protected to ensure the club continues to make money when they use the venue.
One of the biggest questions for fans is whether City owners Sisu will bid for the stadium?
The hedge fund has long had ambitions to get their hands on the stadium or, failing that, build and own its own ground. But unless Joy Seppala has a third party investor up her sleeve, it’s extremely unlikely that Sisu have the funds to make their move. This summer’s sparse business in the transfer window is proof enough, coupled with the late sale of
Dom Hyam to provide a quick cash injection, that the owners don’t have the wherewithal to be in the mix.
Will Sisu see this as the end game and an opportunity to sell the football club?
The simple answer to this is, yes. Although officially not up for sale, reports have suggested Sisu would welcome the opportunity to get out of what has been a long and drawn out relationship which is contrary to the ethos of a hedge fund. The plan when they took over the club back in 2007 was to provide a quick fix, get promoted to the Premier League and cash in on their investment. Almost 15 years on and we’re basically back to square one, back in the Championship but unable to take it any further without significant investment. The club’s business model of developing talented young players and cashing in to make the squad stronger is far more challenging the higher up you go. To put things in perspective, Nottingham Forest got promoted last season with a budget of £12m. City’s budget was £3m, so unless the Sky Blues got lucky, Sisu have clearly taken the club as far as they can.
Is this the perfect time for a new investor to buy both stadium and football club?
There could not be a better opportunity for a wealthy businessman or investor to bring the two together. It’s time for someone to strike while the iron is hot. We’ve heard in recent weeks that there are interested parties out there, whether that be American billionaire John Mcevoy, former Newcastle United owner Mike Ashley or whoever. Both are understood to be keen on both and, in Ashley’s case, reported to want Wasps as well.
Is it likely that the stadium will be bought separately and that City would end up as they are, still renting rather than owning their own ground?
That is a strong possibility, especially if the stadium was bought by the NEC Group or similar business. The Birmingham-based group, which is owned by the Us-based private equity behemoth Blackstone, is understood to be keen on acquiring assets and was last week reported to have made a bid for the stadium.
There could not be a better opportunity for a wealthy businessman or investor to bring the football club and stadium together.
Will a stadium deal and any football club/rugby club deals be done separately or could they all happen at once?
The likelihood is that the CBS Arena will come under new ownership first, and depending on who buys it will dictate whether they then make a move for City and/or Wasps. There is currently a two-week deadline to find a new owner, and with ACL reporting this week that the business has already attracted “strong interest”, it’s not beyond the realms of possibility that a heads of terms agreement could be reached in that time. Any deal to buy the football club, as we have seen from numerous attempts in the past, could prove tricky with Sisu likely to drive a hard bargain.