Coventry City has become the latest football club to have its future cast into doubt by auditors.
The financial report for Coventry City FC has finally been released, in which auditor Julien Rye says the club’s books cast “significant doubt on the company’s ability to continue as a going concern".
This comes just months after Birmingham City’s auditors raised the issue of a “material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern”.
Accounts for Coventry City Football Club (Holdings) show sales rose slightly from £8.9 million in 2009 to £9.3 million last year, with after-tax losses falling from £7.6 million to £3 million.
They also reveal debts of more than £39 million and auditors say that without further investment the company will struggle to operate.
The club’s directors said they are leaving “no stone unturned in the search for new investment”.
An expert in the business side of football, Professor Wyn Grant, from Warwick University, said the situation was cause for grave concern for Sky Blues fans.
He said: “This is a very serious situation for Coventry City Football Club. It is rare for independent auditors to express the view given in this report. While it is serious, it could be retrieved, but that is dependent on whether they are able to attract investment.
“They are very much in a catch 22 situation. They need to operate successfully, but without the money to do so, will they be able to?
“The directors are saying that they want to stay in the Championship and reach the play-offs, but revenue has fallen and the problem they face is how to attract fans.
“They say that they are trying to secure finance, but it is whether they can do that. If the club had a stake in the Ricoh Arena then the situation would look a lot more attractive to investors.”
But Dr John Beech, senior research fellow in sport and tourism from Coventry University, was a little more optimistic in his outlook, describing it as a time for concern, “but not for panic”.
Dr Beech agrees that securing at least a partial stake in the Ricoh Arena would create a brighter future for the club, adding: “The expression the auditors have used is one which might strike fear and alarm if it were being applied to a conventional business, but football clubs aren’t conventional businesses.
“I can think of one football league club which had similar comments from its auditors on its accounts for ten consecutive years and it’s still there.”
“In short, yes, there is still uncertainty about the future, but there are quite a few clubs’ accounts which make for far worse reading.”
