After weeks of speculation, the sale of CBS Arena into private hands has been confirmed. Former Newcastle owner Mike Ashley has become the purchaser of the venue. He has already made his first and highly controversial decision forcing Coventry City to find a new home.
To understand the context of the situation, it is necessary to go back to 2014. This is when Arena Coventry Ltd, which had been managing Ricoh Arena (its name at the time), decided to sell 100% of the stadium's ownership structure to Coventry Wasps rugby club. Such a move meant that the authorities of this team could make their own decisions about the operation of the facility. Wasps had initially signed a four-year lease with Coventry City FC, but the tenants in the meantime were probing options so that they would not be at the mercy of another club. There was speculation that the team might move to the expanded Butts Park Arena soon, but these plans were eventually abandoned.
For the 2019/2020 and 2020/2021 seasons, Coventry City FC were forced to play home games at St Andrew's used by Birmingham City on a daily basis. However, after a two-year disassociation with their city, they managed to reach an agreement with the Wasps authorities and initialled a new lease on CBS Arena for up to 10 years. In the meantime, it has been reported that the 'Sky Blues' will be looking to build its own stadium and become fully independent of other parties. However, before the initial design could be developed, there were gigantic obstacles associated with the use of the existing facility.
Outdated design for new Coventry City stadium, © Coventry City FC
In May 2022 it was announced that Wasps had defaulted on a £35m bond it had sold in 2015. The spectre of collapse loomed in the eyes of the club that owned CBS Arena. In no time at all, it became apparent that there was no longer a bailout. New managing director Stephen Vaughan admitted that Wasps' debts totalled more than £100m. All that was left for the Premiership Rugby authorities to do was to announce the suspension of the team, relegation and the removal of the team's results from September 2022. The club was forced to look for funds and the sale of the stadium seemed the natural and best move.
Initial speculation was that the NEC Group - a consortium that owns a number of conference properties in and around Birmingham - would be the buyer of the venue. Ultimately, the reports were not reflected in reality and the arena ended up in the hands of Frasers Group. The company, which belonged to the owner of Newcastle United between 2007 and 2021, paid £17m for 100% of CBS Arena. It is unclear at this point who will be the main user of the stadium, but it is already clear that it will not be Coventry City FC. The new buyer of the property has indicated that the agreement the football club had with the Wasps authorities is not legally binding on Frasers Group. It was quickly reported that the current tenants must move out of facility.
Interestingly, press reports indicated that Ashley's bid was not the highest. £25m for stadium rights was said to have been offered by Doug King, who owns 85% of Coventry City FC. In the end, the Fraser Group and its chief executive were more successful. The case ended up in court, which ruled that King's offer was made too late. The case resulted in an announcement from the club stating that it had received an eviction order from the purchaser of the arena on December 2.
Coventry City Football Club has an existing long-term stadium lease, which was signed in March 2021 for a period of 10 years. Frasers Group has presented a new contract with new commercial terms to the 'Sky Blues'. The provisions in it have been placed without dialogue or negotiation with us and are less favourable than the existing terms. In addition, the duration of this contract is until May 2023. – Explained the Coventry City FC authorities also referring to whether there was an attempt to reach an agreement with Mike Ashley and his consortium.
© Cov Pix