The Coventry City Council has found itself in the midst of another controversy over its deal for the Ricoh Arena with the Aviva Premiership Rugby Football Union club the Wasps RUFC following the publication of the club’s latest account, which has revealed debts of nearly £ 22 million.
Moreover, Coventry City Football Club’s accounts have also revealed the perilous position that they are in without a stadium. The football club’s accounts for the for the 2013/14 season had revealed debts of a whopping £ 61 million which have now been converted into shares, leaving the club’s trading company Otium with a debt of nearly £ 9.6 million.
The Wasps, on the other hand, have an outstanding loan of £ 22 million to a holding company based in Malta and to its owner Derek Richardson. This debt is owed by the Wasps RUFC on top of the £ 13.4 million it owes to the Coventry City Council for the ownership of the Arena Coventry Limited.
Questions are already being raised over the ability of the ACL to pay back the loans plus interest to the taxpayer within the stipulated 20 year period which amounts to a staggering £ 1.3 million a year.
ACL recorded losses of £ 400,000 last season when the Wasps had suffered a loss of £ 4 million. The company that holds the Wasps has also taken out loans on future income while attendances for the Ricoh Arena has seen a lift in recent weeks following the free tickets distribution.
According to experts, sports companies get money from three areas – TV money, commercial income and fans and with rugby’s TV deal a lot less lucrative than in football, the Wasps RUFC might find it extremely difficult to keep their end of the bargain when the time to pay is up.