Please read the following message to Coventry City supporters on the latest sets of accounts...
Tim Fisher, Chairman of Coventry City Football Club
The club’s accounts have been filed on time and I have absolutely no doubt that when our supporters see the headline figures they could be quite concerned – I wouldn’t blame them.
I believe, as everyone will know, that the events of 2013/14 were nothing short of extraordinary covering both a company liquidation and a ground share. The question asked is - did the club really lose £70 million in the 2013/14 season? The answer is, of course, no it didn’t. Far from it.
Otium bought all the business of both Holdings and Ltd. However, the Football League ‘golden share’ agreement did not allow for any additional debt to be taken onto the balance sheet of Otium.
Therefore, almost £61 million of loans from the owner has been converted from debt to equity, while a further £3 million was provided as equity, demonstrating a clear commitment from the owner – as funds provided after July 2013 were in the form of equity rather than additional debt.
Because of the extraordinary events of the liquidation of CCFC Ltd, the rejection of the CVA and the purchase by Otium, technical accounting rules dictate that, a figure of around £61 million be charged into the ‘profit and loss’ section of the accounts while more than £3 million of additional funding can also be seen as a purchase of equity. The directors make it clear in the accounts that this is not reflective of the true profit and loss of the company.
They do show an operating loss of £6.87million. This is less than the previous year despite the extraordinary circumstances including ground sharing and the points deduction. I think many were expecting a bigger loss but the operating loss was actually an improvement on the previous year at the Ricoh Arena. The club worked hard to restructure the whole business and, again, that has put us on a much more sound footing than was previously the case.
Despite that, it’s only right that we recognise the distress and anxiety caused to our supporters by the move to groundshare so we are, by no means, trying to deflect from that.
Moving forward, we are back at the Ricoh Arena – as tenants. The tenancy agreement has seen a slight increase in the revenue we can generate on match day. But, long term, this is not enough.
We still need to be able to access all match day and non-match day revenue and that is why stadium ownership is absolutely essential. It is critical under the Salary Cost Management Protocol (SCMP) in League One and Financial Fair Play in the Championship that we can increase the number of revenue generating opportunities at our disposal.
From the point of view of the current year’s accounts, we do forecast a much healthier set of numbers. We have not drawn down any funding from the owner/creditor for this season and are shifting the club into a position where it can be self-sustaining.
That, in turn, will lead to long term success on the pitch and that is what we are all striving to see.