Coventry City: The solution financial woe? Kissing frogs!

20 October 2011 06:40
Seven months ago, Coventry City was hurtling towards administration.[LNB]Following a decade of under-performance on and off the pitch, it appeared that new chairman Ken Dulieu had a challenge on his hands keeping the team in the npower Championship and the business afloat.[LNB]After an impassioned plea to owners SISU, the hedge fund has continued to fund losses to keep the club on an even keel and an immediate call to the receivers in March was averted.[LNB]It was a very narrow escape.[LNB]I caught up with Dulieu this week before the Sky Blues' game against Nottingham Forest and he was happy to pass on a progress report that, finally, may show a glimmer of hope for the long-suffering Coventry City punters...[LNB] Fans-tastic: Could there be some light on the horizon for Sky Blues fans[LNB]Ken, can you just re-cap where we were seven months ago, when Coventry City truly were on the brink? [LNB]'In simple terms, you had a situation where the owners were not going to invest any more money unless there was a new board.[LNB]'On the back of that re-organisation, they invested enough to get us to the end of the season.[LNB]'SISU decided to put some more money into the club in June. They convinced both me and the auditors that the club was a going concern. [LNB]'They continued pumping in more money. The reason they have done that is that they can see we are making in-roads.[LNB]'We will lose considerably less this season than we have done in past seasons. The turnaround has started.[LNB]'We had an awful lot of players out of contract in June. There is an  opportunity to reduce your cost base. But we had such a low asset value in our squad - with them being out of contract - that when players re-signed, this was increased as well. [LNB]'What the owners can see is that losses are reducing on a monthly basis and that the assets have grown in value by several million.[LNB]'I would hope we would reduce our losses by 40 per cent.  We have increased our asset value by similar. This has persuaded the owner to continue the path we are going down.[LNB]'Is it easy? No, it isn't.'[LNB] Grounds for concern: City are hoping to secure a deal to buy their ground[LNB]   More from Neil Moxley... The Midlander: Clark's comforting presence has already lifted Forest14/10/11 The Midlander: Who should fans blame for Forest's free-fall? Everyone, actually... 07/10/11 The Midlander: Hodgson's the man to get the Baggies bouncing once more29/09/11 The Midlander: Henry's a pub footballer? When it comes to talent, you've wasted more of yours, Joey22/09/11 The Midlander: The belts are being tightened at Villa... it could be the best thing to happen to them14/09/11 The Midlander: When will Nottingham Forest get the formula right?08/09/11 The Midlander: Coventry's owners open up... as does the trapdoor to League One01/09/11 The Midlander: Magic from McCarthy and Moxey pays off as feelgood factor returns to Wolves25/08/11 VIEW FULL ARCHIVE  To use the analogy of a ship, it was ploughing full steam ahead towards the iceberghas it slowed down now, is that where we are? [LNB]'To use your analogy, this club hit the iceberg a long time ago and has been holed in several places beneath the waterline. We have engineers down there, desperately trying to plug the leaks and keep us afloat.[LNB]'We need to reduce our losses as quickly as we can but not impact on the quality of the team. It is a devilishly-difficult juggling act.[LNB]'In the summer, we we lost  Kieran Westwood. And then we had the fiasco with Marlon King.[LNB]'So we bought two 'keepers in. We could afford to lose Ben Turner in the transfer window because we - myself, Andy Thorn and the coaches - were confident we could cover that. We were able to sign Cody McDonald.[LNB]'The last ten games of the season, we showed top-six form. We also went from belting the ball miles down the pitch when it had snow coming off it to playing some decent stuff. [LNB]'To put it into figures we were averaging 100-120 passes per game. We are now averaging over 300 and, like I say, playing decent stuff.[LNB]So what is the current position with regards inward investment? [LNB]'In my spare time, I'm trying to find investors. SISU have made it clear that they would like others to share the burden. That's critical.[LNB]'You have to kiss an awful lot of frogs. It's hurtling towards 20 potential 'investors' - and of those 20 there are those who haven't got to the kissing stage.[LNB]'I certainly haven't had a serious snog with anyone'[LNB]But - to use another clich? (!) - is there any light at the end of the tunnel? [LNB]'There is with regards to the stadium. We should be able to make some progress there.[LNB]'As you know, 50 per cent of the site is owned by the Higgs Trust. The other 50 per cent is owned by the council.[LNB]'My difficulty is that I have to overcome a lot of hurdles for people to gain confidence in us. The first stage towards gaining credibility is putting our own house in order to prove we can run a football club.[LNB]'The second thing is: Have we the funds? [LNB] [LNB] Reasons to be cheerful? City fans haven't had much to celebrate recently[LNB] 'When I have those funds - and we arequite near that at present - then I will approach the Higgs Trust and Coventry City Council. We have an on-going dialogue with the Higgs Trust. We have had a very positive meeting with them.[LNB]'Tobe fair to other people out there, it's all very well saying you will buy the club for ?1. What I would say in response to that is: 'Thanks for the ?1 - now have you got ?500,000 more of them to run this club foranother month?'[LNB]'Unless you can show me that, there's no point in me taking ?1 off you.'[LNB]To that end, what has been going on with Gary Hoffman? [LNB]'Gary has been in the media as much as Andy Thorn and the players put together. I haven't seen a penny yet.[LNB]'Out of courtesy, I've had five meetings with him. But I won't be having any more until there is proof of funds from him.[LNB]'I've got loads of energy but few summers more to waste, I'm afraid.[LNB]People believe there are hundreds of investors out there willing to take on Coventry City. You're saying that's clearly not the case?[LNB]'I just want to make it crystal clear where we are.[LNB]'It's easier to raise funds if that proposal is asset-backed. If you are trying to raise money on the back of a dream, it's that much harder.[LNB]'We have to make this is a viable business for that reason. It's much more difficult to attract funds when we have no assets and we are losing ?8-10m per year.[LNB]'People willing to invest on that basis actually don't exist. Therefore you must try to break even from where we are.[LNB]'To that end, it is logical that the club does own the stadium.[LNB]When would you hope to have some positive news on whether the money has been raised to make an offer for 50 per cent of the stadium? [LNB]'I would hope to have some news before Christmas. That's what I'm working hard towards. It doesn't mean to say the negotiations will be over, just that there will be something positive to say.[LNB]'The progress would be that we have opened up negotiations to acquire the first 50 per cent of the ownership of the stadium.[LNB] Cash crisis: SISU are keeping the club afloat until new investors are found[LNB] 'But we need to show that we can run this business and that we have the funds to buy it.[LNB]'Butwe cannot do this without the support of the Higgs Trust and Coventry City Council. I hope those parties will talk to me once I prove the credentials here are correct.'[LNB]Where does the Ricoh business fall into that? [LNB]'I think logically, you would want to control the whole brand. That starts when you turn up. It is much harder when you are a tenant.[LNB]'I don't know how many of the 92 clubs don't own their grounds. I would say it's very few.[LNB]'But if that's the case, it's very difficult to control your product. This needs to be 'Club Coventry.'[LNB]'It's not an overnight situation. I can understand from the council's point-of-view that we are serious and financially responsible. And that there is job creation on the agenda too - not just for the club.[LNB]'We want regeneration - not just for Coventry City FC. But for Coventry and its' surrounding areas.'[LNB]I know Coventry's fans are used to being patient, but is it a case of being so for a while longer? [LNB]'I can understand that the fans are frustrated. But there is only one fairy godmother at the moment - and that is our current owners.[LNB]'They are funding the players, the rent here, the coffee we are drinking.[LNB]'So when SISU see banners saying: 'SISU out,' then it doesn't help our cause. When I have the begging bowl out, asking for more money, they say: "But the fans hate us, why bother?'[LNB]'It is a tough battle.[LNB]'I really can understand the fans' frustration. But I'm in the situation where I need to find the money to pay the players' wages every month.[LNB]'Listen to me carefullythere is no-one else.[LNB] Thorn in my side: City are currently hovering above the relegation spots[LNB]'I've inherited a horrible legacy here. A squad whose players are running out of contract, ?30m debt and the owner is disliked by a frustrated supporter-base. Add to that, we donot have the greatest of relationships with the council - for historical reasons - and I've got to turn this around.[LNB]'It really isn't easy. It's a real, real challenge.[LNB]'Peopleask: 'Why do you do it?' I'm fascinated by football but I believe that if you are fleet enough you can do better deals than your competitors tomake the business viable.[LNB]'And what will help that, undoubtedly, is financial fair play.'[LNB]Do you welcome that? [LNB]'Well, you look at the model in place for League 2. It doesn't take a genius to work out that if you run a restaurant and you spend 50 per cent of your money on staff wages, you won't make a profit.[LNB]'But, on planet earth where I operate, 65 per cent of turnover on player wages is sanity. Ninety per cent - which is where we were before - is lunacy.'[LNB]If there was a message you wanted to get out there, what would it be? [LNB]'We are not against the fans. I am a fan. We have fans on the board. Everybody is fighting to keep the business solvent.[LNB]'Can we spend millions on a player? No.[LNB]'I have to balance the books, so that there is a club tomorrow. I cannot spend ?10m - as has been done in the past - to build up those debts. The owners have made that clear.[LNB]'As painful as it is, I have to balance the books.'[LNB]How strong is the commitment from SISU to keep footing the bill? [LNB]'Can I guarantee that they should stay in? No. All I can do is keep proving to them that this will be a viable model. That's my job. I would hope that the fans would say we are not cutting a swathe through the squad and we are trying to retain the quality.[LNB]'I'd also say that our squad this season is better. It's of more value.[LNB]'We are trying to balance it all. But the most important thing is that the club survives and can move forwards.'[LNB] Sky's the limit: Dulieu is positive about the club's future[LNB]Do you more feel more confident of this than you did six or seven months ago? [LNB]'I've aged. I can tell you that much!  Yes. Six months ago, there was work "to be done." We have done a lot of work since then and we have shown improvement.[LNB]'I can promise you, if we hadn't shown that improvement, SISU would not be backing us. They have shown faith in what we are trying to do.[LNB]'I do feel more confident. But what the future holds, I don't know. [LNB]Ken, thanks for the chat.and SISU, thanks for the coffee Coventry 1 Nottingham Forest 0: Jutkiewicz gives new boy Cotterill the Blues Ready, Freddy, go! Coventry run out of patience with striker Eastwood[LNB]

Source: Daily_Mail