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SBD Global/August 2, 2013/FranchisesPrint All
League One Coventry City faces a "serious risk of liquidation on Friday and a severe points deduction, potentially plunging the club into deeper crisis one day before the start of their League One season," according to James Riach of the London GUARDIAN. Coventry City will have a final creditors meeting on Friday at which Arena Coventry Ltd., the owner of the Ricoh Arena and jointly made up of Coventry city council and the Higgs Trust, "would need to sign a company voluntary arrangement that would secure payment to creditors" if the club is to exit administration. ACL claimed on Tuesday that it would "consider signing the CVA if specific amendments were made." One was that the club signs a "new 10-year rent deal at the Ricoh, significantly reducing the annual rent on the stadium" to £150,000 ($227,145) a year, down from the previous £1.3M ($2M) contract. Coventry City CEO Tim Fisher, however, said that ACL's amendments "would not be made to the CVA and that a planned groundshare with Northampton Town would go ahead" (GUARDIAN, 7/31). In Coventry, Les Reid reported Warwickshire businessman Michael Byng claims that "Ricoh Arena delays in enabling Coventry City to exit administration are preventing possible Chinese investment in the club and Ricoh Arena." Byng: "Chinese investors remain interested and have been in position for some months. But they are confused by the approach adopted by Coventry City Football Club's owners and Coventry City council to resolving the club's problems" (COVENTRY TELEGRAPH, 7/31).
IT 'GOES BEYOND FOOTBALL': Also in Coventry, Steve Carpenter reported supporters have "welcomed last-ditch talks" between ACL and Coventry City to keep the team in Coventry. Sky Blue Trust spokesperson Jan Mokrzycki said, "The whole sorry saga goes way beyond football and the fans are in complete contempt. The frustrating part is what do us fans have to look forward to?" (COVENTRY OBSERVER, 7/31).
NO TALKS: In a separate piece, Reid reported no 11th-hour talks aimed at keeping Coventry City at the Ricoh have taken place between council leader Ann Lucas and SISU Capital CEO Joy Seppala. Seppala "remains keen to take up Lucas's offer of 'woman-to-woman' talks any time, anywhere." It is "not known if there are attempts today [Thursday] on either side for the two women to talk" before Friday's meeting (COVENTRY TELEGRAPH, 8/1)
Scottish Premier League Heart of Midlothian administrators BDO have revealed that the club owes £28.5M ($43M) after "sending a detailed report of the club’s debts to all 200 creditors," according to Darren Johnstone of the SCOTSMAN. The full extent of Hearts’ financial predicament "has been laid bare in a 45-page document compiled by the troubleshooter." But the dossier "paints a more bleak picture." As well as the £15.5M ($23.5M) and £8.2M ($12.4M) due to Ukio Bankas and UBIG -- Russian businessman Vladimir Romanov's collapsed companies in Lithuania -- "other significant creditors are also listed." This includes £1.9M ($2.9M) due to U.K. tax authority HMRC. The report states that Hearts owes a total of £535,000 ($810,000) in football debt, which "must be repaid in full by any new owners." A meeting of the creditors and BDO is due to take place at Tynecastle on Aug. 12 for "the purpose of considering the Joint Administrators’ proposals and determining whether to establish a Creditors’ Committee" (SCOTSMAN, 8/1).
LIQUIDATION FEARS: In Edinburgh, Stuart Bathgate opined Ukio administrator Gintaras Adomonis' "mentioning the possibility of liquidation, for all that it understandably provoked a worried reaction in many Hearts supporters, was equally predictable." Since the Tynecastle club "went into administration in the middle of last month, that possibility has been there, as one of two potential paths." Whether you run a football club or any other business, once you are in administration you either achieve a Company Voluntary Arrangement with the agreement of at least 75% of the firm's shareholding, "or you are liquidated." That stark reality "has been visible every day to the leading figures in the Foundation of Hearts who have been negotiating in an attempt to be named as preferred bidders for the club." If Romanov's "ruinous reign had come to an end five or six years ago, we would be in a very different position just now." But this is not five or six years ago, and the "Edinburgh property market is not what it was." What if, "after rejecting the overtures of the three parties who want to buy Hearts, he found that no-one was willing to buy the ground?" Any property developer "would not only need to stump up several million to buy the land, then another half-million or so to clear the site, they would also have to factor in considerable reputational damage." After all, anyone instrumental in closing down Hearts "is likely to be loathed by a substantial section of Edinburgh’s population." The bad publicity "would simply not be worth it" (SCOTSMAN, 7/30). STV reported Hearts has been "barred from registering new players over the age of 21 until February by the Scottish FA." The decision "is punishment for the club entering administration." No financial penalty "was imposed by the disciplinary panel" (STV, 8/1). The EDINBURGH EVENING NEWS reported Hearts-Daft celebrities and wealthy businesspeople "are being urged to match the commitment of 'ordinary supporters' and back a fan-led consortium vying to save the club from extinction." Former Hearts Chair George Foulkes "has issued a clarion call for well-heeled Jambos to dig deep for Foundation of Hearts and help lift the threat of liquidation by taking ownership of the troubled Tynecastle outfit." He said, "People in positions of responsibility who are known Hearts supporters should be searching their conscience just now. A lot of ordinary fans have been doing everything they can to help the club while there are some members of the executive club -- and some former directors --who haven’t yet committed to the foundation" (EDINBURGH EVENING NEWS, 7/31).
The Spanish Handball Federation "unofficially" informed handball side Bidasoa that it will play next season in the Spanish Handball League (ASOBAL) after the club met the requirements the league demanded, including a €20,000 ($26,434) payment for the league's first-term license fee for participation. Bidasoa President José Angel Sodupe said, "All that's left is to send the documentation that, according to those who are going to do it, we will send. This is something that the Handball Federation and the ASOBAL were imagining would happen when we were there, and they already told us they were going to be flexible with the dates" (EFE, 8/1).