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Thu 26th Sep 2013 3:35pm
From today's Coventry Telegraph
Coventry City's owner Joy Seppala says she is willing to talk with the council over returning to the Ricoh Arena - but only if the club can own it.
In an exclusive interview with the Telegraph, her first with any media organisation, the intensely private Sisu hedge fund manager insisted the club is "not for sale".
And she emphasised the club under Sisu would never return to the council-owned Ricoh as tenants - even on a temporary basis to enable ownership talks.
Ms Seppala maintained she has already attracted investors to fund the club for years - including the losses from playing poorly attended 'home' matches at Northampton, and the costs of building a new stadium in the Coventry area within five years.
She said the club was at a "new beginning", and added: "If anyone doubts a stadium will be built, they haven't had engagements with me over the course of the last two years."
In a candid interview at the HQ of her Sisu Capital hedge fund, in London's west end, she faced questioning for more than two hours over the long fractious dispute with the council and its part-owned Arena Coventry Limited - which landed the club in administration and lost the team 20 League points.
ACL when asked by the Telegraph if it would be willing to resume talks with Ms Seppala over stadium ownership and revenues, not just rent, said in a brief statement: "It's up to them to decide what their best offer looks like."
Sisu and its related firm Otium, which now runs the club, says a fair price for the Ricoh and the potential development land around it could be agreed by taking the average of each sides' surveyors' valuations, based on potential income.
ACL still insisted it has "always been prepared to negotiate a rent deal", making "fantastic" offers to cut rent by a third to £400,000-a-year, and then £150,000 via the administrator.
Coventry City Council leader Ann Lucas has stated a future Ricoh sale might be considered to the "right people at the right time". The council says the stadium can be profitable without the club it was built for - despite the latest accounts showing profit relied on football income.
It comes after a survey of 500 members of fans' group the Sky Blue Trust showed Sisu remain deeply unpopular among them, but two-thirds would go to Sky Blues matches at the Ricoh - whoever the owners are.
Asked to be clear with fans and Coventrians if there were any hope of a Ricoh return, Ms Seppala said: "The club needs 100 per cent ownership of the freehold of the Ricoh. If you look back at the history of the club, you can see why this is important."
She said she had made her position clear at a meeting with ACL directors on July 25, adding: "I had thought we were going to talk about a deal involving stadium ownership."
Asked if it was an extreme bargaining position in public from which there may be room for private negotiation, she said: "I don't posture. I always tell people what it is I need. I don't go for wasting time in negotiations.
"There is no way we would go back to a rental deal. As I have said to the Football League when they asked recently if we would do a temporary arrangement, it would be irrational to return on an interim basis where I have any exposure to Coventry City Council whatsoever.
"The League chairman Greg Clarke has said it is not for the League to dictate what stadium a club plays in, or on what terms.
"Realistically, this council don't think they can work with me. I know I cannot work with them. It doesn't mean I can't negotiate a deal. But I am not going to risk my investors' money by exposing us to the potential of having a repeat of what happened over the last year.
"Would I be open to listening to what they have to say? I would. That is strictly for the fans. I feel empathy for the fans' position. It is not fair what's being done to them. They haven't deserved what's happened to the club over the last 12 months.
"But everything we've done is to implement a long-term strategy that will see the viability of this club for the long term.
"From the moment a decision was made for a joint venture with the council for the Ricoh Arena (in 2003), the club lost control.
"It would be crazy from a business perspective to go back to the Ricoh without full control. All the money that's been put into this club would be put at risk again.
"When the former owners of the club sold the 50 per cent share to Higgs (Alan Edward Higgs Charity), I do not believe they thought they were giving away matchday revenues. They thought they had sold the equity stake in the stadium, not the revenues."
Insisting the club's survival depends on income streams from a stadium and land denied to it by the council, Ms Seppala continued: "Plan A is building a new stadium. There is something very exciting about building something that is a new beginning. It feels like the club is at a new beginning.
"The business side is operationally in a good place. Tim Fisher's done a good job. The football side is going well.
"What's exciting is being involved in the beginning to the end of building something like that, from purchasing land to planning permission to the designs for the stadium. Building it is exciting, different and new.
"Things have moved on since the Ricoh. The ability to expand (as the club grows) is exciting. We can start smaller and then build around it, whether or not it's a multi-purpose sports stadium.
"We could have various sporting events there from a business model perspective and develop around it, whether it's retail, restaurants or homes. There is a lot of flexibility in how we develop it. It's something we would relish. It's a dream."
The 51-year-old American mother-of-two from Massachusetts born to a mother of Finnish descent said she had "majored in real estate" as part of her MBA postgraduate studies at Wharton business school at the University of Pennsylvania.
Her American husband, Bill Florence, is also a financier who has worked in real estate.
Quizzed over many anti-Sisu fans' doubts about its ability to finance a new stadium or obtain planning permission in Warwickshire - particularly for the Brandon speedway/greyhound racing stadium site, one of four property agents are considering - she gave examples of Rotherham United's £20million stadium, and £11million for Shrewsbury Town, completed relatively quickly.
She said: "Most councils would love the idea of having a football club, given the economic impact it has. Look at what Northampton's council leader said about Coventry City groundsharing - that they were delighted to have Coventry City fans contributing to the town's economy.
"The new stadium will be close to Coventry but not in the jurisdiction of Coventry City Council. We met the Football League in January and discussed where it should be and what it should be.
"Instinctively, it would not cross my mind to have it within Coventry City Council's boundary given the history, histrionics and the issue of freehold ownership.
"I am not concerned about the funding of a stadium. I'm reasonable comfortable that won't be an issue.
Mrs Seppala said she anticipated the stadium would require 40pc equity (cash) with the rest borrowed, and added: "I have got people who are more than happy to fund that. I'm having discussions all the time with investors." She said investors included wealthy families and financial institutions, including pension funds.
Asked about reports her funds were worth much less than before the 2008 financial crash, she said: "Is any financial institution as wealthy as it was in 2008? The financial industry has contracted. But our private equity funds are the same funds we've always had.
"The hedge funds have contracted but the private equity funds are not dependent on market fluctuations. They have long term investors. They put the money in. They do not take it in and out."
Ms Seppala said she was not personally involved with Sisu Capital's purchase of the football club in 2007. She said: "People did the due diligence and for all intents and purposes we took calculated risks.
"What I can say definitively is that since I've become involved in the last two years I have not regretted any of the decisions that we've made.
"I believe this is the right position for us to be in, given all the circumstances we were dealt.
"Would I have preferred to stay at the Ricoh? Of course. Would I have preferred to reach a deal with the council? Of course. That's why we agreed to the heads of terms (for the Higgs share last year). But for whatever reason they patently refused to authorise that purchase.
"We have made decisions which we believe are emphatically the right decisions and we're in the right place. We're taking the club in the right direction bar the emotional angst its given to fans. Emotions are not lost on us. I feel very bad. Football is like a religion.
"The long term viability of the club depends on us doing this. If the status quo continued, Coventry City would not be here in a year or two."
Ms Seppala said there was "no time constraint" on Sisu/Otium remaining at Coventry City, adding: "Nothing would please me more than to see us promoted this year or next and to build a football model that sustains a culture and a vision for the long term.
"There is a meshing of values and vision between the business side and the football side.
"The most successful strategy is to create an enduring legacy of success. When I met Steven Pressley for the first time and we talked about his vision, the fact is that his vision permeates and is endemic to the culture of the organisation.
"It's a culture that could survive the manager. It's the Swansea City model of endurance - a very long-term approach. That culture isn't created overnight.
"Previously, Steven Pressley has had to take a club from the grassroots. The youth academy model we are building is really important.
"Coventry City fans think it is a big club. It is a big club, but when you're not the Real Madrids or Manchester Uniteds of this world, there is no propensity to over-pay for mediocre players. We have to de-risk with a strong academy model.
"It's setting up the business for the long term. The club hasn't had that luxury for 12 years. It hasn't been able to think beyond month by month. The football club has been battling the rent and revenue demons for 12 years.
"For the first time in 12 years there is enormous potential for real value creation. We have a clean slate. It's a unique opportunity. It's not been without a lot of pain, but I am very excited. There is nothing more satisfying than seeing something grow and succeed."
Asked if she would sell the club if an offer was made, perhaps for £15million, she said: "The club is not for sale. In the past year alone, we've put millions into the club, and committed £60million over time. We have not taken a penny out of the club.
"I am not looking to pack my bags and go away. I want return on my investment."
The football club's last filed accounts for 2011 showed the players were registered in the company placed in administration (Coventry City FC Ltd) without the players.
The club, Football League and administrator Paul Appleton insisted the players had been registered in another company, CCFC Holdings Ltd. The League, speaking exclusively to the Telegraph, had pleaded it had made "administrative errors".
The discrepancies are at the heart of continuing campaigners' calls - led by ACL and Coventry MP Bob Ainsworth - for a wider investigation, which anti-Sisu fans hope will lead to charges and directors' disqualification.
Ms Seppala insisted: "There was no transfer of assets.
"Every single player for 10 years has been audited and re-audited and all of the players over the years were registered in Holdings, with only one or two exceptions down to administrative errors. All the players were in Holdings at the time of the administration.
"I was really struck by some of ACL's allegations after the League's golden share was transferred to Otium on August 2.
"They seem to think I have the power and influence beyond what is human. It is so inconceivable I can't even fathom it, that I could have the ability to force the administrator and his lawyers, the Football League and others to act criminally.
"If Holdings and Limited were combined we would still have been the largest creditor and the outcome would not have been any different."
She emphatically denied concocting an unfair administration process which would realistically prevent a takeover - or dumping the Ricoh lease and licence to the disadvantage of creditors ACL.
The club put itself into administration in March after ACL had filed for adminstration in the High Court.
She said: "The last thing I wanted was for the club to go into administration. All I wanted was the heads of terms deal that was signed - involving removing the debt, buying the Higgs stake, with lease extensions, community programmes and bringing in (events management company) AEG. We also wanted a programme to get greater (stadium) ownership eventually.
"There is not a chance I would do that deal now."
Denying the plan was ever to distress ACL to get the stadium "on the cheap", she said: "The council owns the freehold and has a right of re-entry. So in the event of ACL going bust they could take the lease over anyway and continue to run the stadium. This also means that if somebody went in to buy ACL, the council had the right to refuse the assignment, whoever that buyer was.
"I am focussing on the future and not looking back."
She is irritated by any impression that no rent at all was paid since last April, when the club began withdrawing the full £100,000-a-month payment, claiming it was unfairly above market rate.
Ms Seppala said the club had continued to pay matchday costs, adding: "Broadly speaking, the council still owes the club £400,000 with a rates rebate. The club owed net rent of £600,000. The result is that we owed £200,000 net.
"We didn't want to distress ACL, but the club couldn't afford to pay the rent, especially given the Financial Fair Play rules (which limits spending on the team to 60pc of revenue). We wanted to do a deal (with the council and ACL). We wanted to go together to Yorkshire Bank (to buy out ACL's "mortgage" for cheaper than the £14million the council paid in January).
"Then, at the end of November, we were told the council wouldn't approve the deal over the 50 per cent Higgs share."
Asked if players would be sold, a main reason why Sisu became unpopular with many fans even before last year's financially disastrous relegation to Division One, she conceded, "Every player has a price."
She added: "If somebody came in and offered £5million for anyone, or an over-the-top figure for any player, we'd have to think about that.
"But the reality is we're in it for the long term. We don't want to sell anyone in January (when the transfer window next opens). If we have a squad with the ability to compete and be promoted, we have £5million in additional revenues in the Championship."
The "devout Christian" said she had received some angry hate mail, including emails containing words such as "die" and "bitch".
But she said she had responded to more constructive emails from fans agry about the move to Northampton - where attendances of over 1,500 are at an historic low, and less than Otium chief executive Tim Fisher had predicted.
She is not likely to be spotted much more often in Coventry, or pose for public photographs - which are virtually non-existent, despite the digital age.
She said: "I would like to get to a point where people are so interested in the football, they stop talking about Sisu Capital.
"I am not the face of Coventry City Football Club. The football side is Steven Pressley, Neil McFarlane and Steve Waggot, and Tim (Fisher) is on the business side."
"I shepherd other people's money. I don't have the desire to run a football club, I don't know anything about football.
"I am a private person. I don't seek publicity. I just like to go home and be with my family. I'm not a terribly social person."
"In a multitude of ways, this has been one of the most extraordinary professional experiences I've had. I've learned from it, and I don't regret anything.
"If I was asked, 'Would I make the same investment again that we made in 2007, I would say, 'No'.
"But I believe I know how to get to the next stage and to be successful, meaning for the club to be successful, which would be an extraordinary feat to look back on.
"I am not one to run from a challenge. I like to work hard. When you work really hard at something and see it flourish, there is nothing more rewarding beyond your own family."
* Sisu companies' appeal against a judge's rejection of a judicial review into the council's £14million buyout of ACL's mortgage is to take place on November 28. |
