Last night the Football League said:
“Following the failure of Coventry City FC Limited’s Company Voluntary Arrangement earlier today, the Board of The Football League has considered an application by the Administrator’s preferred bidder, the Otium Entertainment Group, for a transfer of the club’s share in The Football League under the ‘exceptional circumstances’ provision of The League’s Insolvency Policy.
The Board has agreed to transfer the Club’s share on the basis that it accepts a 10 point deduction for the 2013/14 season. This decision will enable Coventry City to continue its membership of The Football League, despite the failure of its CVA, and participate in the 2013/14 Sky Bet League 1 season.“
These three sentences leave so many questions unanswered, so I thought I would list them:
- Why is the Football League’s “Insolvency Policy” secret?
- What were the “exceptional circumstances” that applied to the situation at Coventry City?
Following the failure of the CVA, the administrator of Coventry City FC Ltd said he would now seek to liquidate the company. This has not yet happened. Coventry City Football Club Ltd remains in administration and can only be liquidated by an order of the High Court.
If disputed, as is the case here, a High Court liquidation order will only be made after a hearing at which the court will inquire into the circumstances that led up to the insolvency. The hearing will include questions about the transfer of assets; such as the “sale” by the administrator of the assets of Coventry City FC Ltd to the Otium Entertainment Group Ltd.
- Why has the Football League transferred an asset of Coventry City Football Club Ltd (the “golden share” in the Football League Ltd) to Otium Entertainment Group Ltd before awaiting the outcome of the legal process?
- Why does the Football League refer to a “preferred bidder” when talking about a company heading towards liquidation, bearing in mind that liquidation is about the closure of a company rather than its sale?
- Bearing in mind the implication behind the immediately preceding question, on what basis have the Football League decided to allow Otium Entertainment Group Ltd to be given a “golden share” in the Football League Ltd, to operate a club called Coventry City Football Club?
In an earlier statement, the Football League said it would allow Coventry City to play its home matches at Northampton Town’s Sixfields Stadium, contrary to its own rules and regulations, and the FAs rules and regulations, but that this agreement was “entirely conditional on the Club ultimately exiting administration in accordance with The Football League’s conditions and achieving a successful transfer of its League share.”
- Why did the Football League deem it appropriate and necessary to ignore both its and the FAs rules and regulations when agreeing to the ground share with Northampton Town?
- Why has the Football League overturned its own position that the ground-sharing agreement was “entirely conditional on the Club ultimately exiting administration”, bearing in mind that Coventry City Football Club Ltd is still in administration?
At a number of points during the administration process, the Administrator of Coventry City Football Club Ltd has stated that he could not operate the club in administration, as other football club administrators have done, because while Coventry City Football Club Ltd owned the “golden share” in the Football League, the players were contracted to and registered with a different company, Coventry City Football Club (Holdings) Ltd. This is contrary to the Football League’s rules and regulations that define a club as the company holding the “golden share.” This arrangement came to light after the club went into administration.
- Now that this irregular arrangement is a matter of public knowledge – and, effectively, a matter that the Football League is now aware – has the Football League insisted that the players’ contracts and registrations be transferred to Otium Entertainment Group Ltd as a condition of the transfer of the Golden Share?
- If not, isn’t it the case that Otium Entertainment Group Ltd are in the same position that the Administrator was in – ie, they have the “golden share” entitling them to play in the Football League, but no players contracted to it?
- If the “new” Coventry City Football Club (ie, Otium Entertainment Group Ltd) play a Football League match with players who are owned by another company (ie, Coventry City Football Club (Holdings) Ltd) are they not in breach of Football League and Football Association rules and regulations concerning third party ownership?
- If the players’ contracts and registrations have not been transferred to Otium Entertainment Group Ltd, are the Football League not sanctioning a further breach of their rules and regulations (and, in fact, their Articles of Association) by allowing a “club” to be operated by two separate entities?
- If the players’ contracts and registrations were transferred to Otium Entertainment Group Ltd, when did this transfer take place, and why did the Football League not publicly announce the transfer as they do with every other payer transfer?
And finally, In its earlier statement about ground-sharing, the Football League said: “with the new season less than four weeks away, the Board required certainty as to where the Club would play its matches from the start of the new campaign.” It continued: “the Board was placed in an unenviable position – with the very real possibility of Coventry City being unable to fulfil its fixtures for next season.“
In its statement last night, the Football League said its decision, in “exceptional circumstances” to transfer its share to Otium Entertainment Group Ltd “will enable Coventry City to continue its membership of The Football League, despite the failure of its CVA “
- Is it correct to read into the Football League’s statements, that its position that its rules and regulations will never be applied correctly by the Board if it means that a club will be forced to exit the Football League?
- If that is the case, aren’t the Football League saying that owners and directors can flout the rules with impunity; so long as they get their timings correct and allow things to happen right next to the start of a Football League season?
The Football League concluded its statement last night by quoting its chairman Greg Clarke saying that the Board were “dismayed at the level of intransigence being shown.”
The Board need to be aware that football fans up and down the country – not just Coventry City fans – are dismayed at the actions of the Football League and the lack of proper transparency and accountability in holding football club owners and directors to account for their mismanagement.
As one football fan said on another club’s message board last night: “Before a ball is kicked in its 125th season, the football league betrays its legacy.”
Footy Law 
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You may be interested in: http://twohundredpercent.net/?p=23866
And the ACL statement today in relation to the above: http://www.coventrytelegraph.net/sport/football/football-news/coventry-city-ricoh-landlord-acl-5582877
Spot on. There are many thousands of fans who think like this. How do we put maximum pressure on the FL?
As with all large organisations, they end up believing that everything that they do is correct, even if they have to “bend” their own rules. In the case of the City and SISU, the rules seem to be changing daily, just to suit the actions that the F.L. have taken. A lot of it comes down to interpretation, unless it comes down to a court of law, they will always interpret everything to get the outcome that they want. They have shown this with other clubs as well, but we are only concerned with OUR CLUB. If the crowds don’t turn up to the games, as seems likely, then they are going to have to do something about it. Can’t be seen to have egg on the proverbial face can we?
The FL’s only concern was avoiding the embarrassment of one of its member clubs folding, and the knock-on effect on the 2013-14 fixtures list. They’ll even sanction a bunch of crooks like SISU running CCFC in order to save their own face. But there will be big embarrassment in store for them on Sunday when the Sky cameras visit both an empty Sixfields and a busy Ricoh, where a charity match is taking place.
There’s also the fact that late-period free market capitalism expects the right to go about its business unchallenged & unregulated. The same kind of people in charge at SISU are also in charge of the media and at the FL, hence the lack of questions being asked about SISU’s destruction of CCFC. I think a lot of people both inside and outside football are looking very closely at what’s happening at CCFC – if SISU get away with this, then it pretty much gives any other bunch of crooks looking to take over a Football League club free reign to do whatever they want.
The football league have acted despicably; there was an offer by Arena Coventry Ltd to allow CCFC to play at the arena whilst the club remained in admin,hence, it was not necessary to sanction the ground-share at Northampton.
Further, the last offer by ACL, to the club to play at the Ricoh, was at a cost level equivalent to that of the cost of paying Northampton……so why did the FL not insist to our new owners, that they would only have temporary ownership of the golden share on condition that they play at the Ricoh?
Shame on you football league. You can’t stick to your own rules and implement them. You have let every Coventry City fan down. SISU/OTIUM are not to be trusted, you should have listened to our fans that have bombarded you with desperate e-mails. You are letting down every football supporter from every club. This needs putting right NOW !
Excellent article that identifies key areas where the Football League have failed to look after the best interests of the game and us supporters. It’s time for the FL to rectify its errors or for those responsible to be held to account. It would also be interesting to know why the FA has not intervened in this whole sorry affair.
The Football League can’t be seen to have an about face on anything. Therefore they are always going to stick by the decisions that they have already made, whether they are right or wrong. We have ended up seeing two incompetent boards trying to fob off the decisions that they have already made. An about face would really make them look as we see them. If this happens to any more teams, at the same time, we may see different decisions made. But at the moment we are stuck with two apparent liars. (I have only come to this decision based on what we, the supporters, are being told, one per cent of nothing!