Coventry City's mounting debt proves to have a very good cause

Damian Collins MP has complained to the sports minister about the lack of transparency in the ultimate ownership of Coventry City's parent company, Sisu – but that is the last of Coventry fans' worries.

There have been widespread rumours of administration at the club. These have been denied by Sisu, where recent directorial changes saw a former adviser to Tony Blair, Mark Labovitch, co-opted to the board.

Coventry are certainly haemorrhaging cash. Sisu says the tenancy of the Ricoh Arena is worth £1.2m a year to their landlords, a joint venture of Coventry's city council and Football Investors Ltd. In 2009, the lease contributed to a £3.3m net loss for the club (which would have been worse but for the £2.7m Coventry earned for "provision of sports analysis" before they sold ProZone).

Yet the Ricoh Arena is a hugely profitable enterprise for the council and Football Investors. In 2010, after paying loan interest, the stadium operator, Arena Coventry, made £1.5m even after investing millions in facilities. The previous year, when significantly less was spent on new assets, profits after debt and tax payments were £4m.

And so who owns this cash cow, if not the benighted Sky Blues? Well, the council, we know, owns North Coventry Holdings' 50% share. The other half is held by Marilyn Knatchbull-Hugessen, a magistrate in East Sussex; Peter Davis, a retired solicitor; and the late Sir Derek Higgs. Their shares are held on behalf of the Alan Edward Higgs Charity, which focuses on underprivileged children in the Coventry area. So at least fans know the money seeping out of their club is going to a good cause.

Sion unappealing for Fifa

Fifa's refusal to sanction the signing of a handful of players by the Swiss club Sion could bring down the entire legal structure of football. According to a judgment relating to Sion's appeal to the provincial court for the Swiss canton of Vaud, seen by Digger, the supposedly independent appeals bodies of international football organisations such as Uefa and Fifa are little more than kangaroo courts.

"[Their] decisions are only a simple manifestation of the will issued by the association concerned," the judge, Nicolas Biner, wrote. The phrase lights a fire under the legal basis for all the appeals bodies' decisions and, after years of sports bodies trying to build a legitimate "sporting specific" structure of legal disputes, will lead to a flood of litigation from clubs and players through the conventional courts.

Third-party assurance?

Fifa's decision to investigate Quality Football Ireland, a third-party player‑investment fund to which the former Chelsea executive Peter Kenyon and the agent Jorge Mendes are advisers, has puzzled folk at the Premier League.

As examined here last month, QFI has been involved in at least one controversial transfer, into Spain, where the practice is considered legal. Indeed, the Premier League is the only one in Europe that has taken seriously the integrity and economic threats posed by third-party player ownership. Its repeated entreaties to Fifa to act had hitherto fallen on deaf ears.

QFI, a company that is 69%-owned by Kenyon's US employer, Creative Artists Agency, has insisted through Kenyon that it is doing nothing wrong.

Powered by Guardian.co.ukThis article was written by Matt Scott, for The Guardian on Thursday 29th September 2011 22.59 Europe/London

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image: © Bonnett

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