Coventry City: Football League docks Sky Blues 10 points

Coventry have been deducted 10 points after the Football League allowed them to start their League One campaign.

Coventry City FC Ltd went into administration in March following a row with Arena Coventry Limited over rent.

It now faces liquidation after ACL, which runs the Ricoh Arena, rejected a Company Voluntary Arrangement.

But an application by the Otium Entertainment Group for a transfer of the club's share in The Football League has been accepted.

A Football League statement read: "The League has transferred the club's share to the administrator's preferred bidder Otium Entertainment Group.

"This comes after an application under the 'exceptional circumstances' provision of the League's Insolvency Policy and on the acceptance of a 10-point deduction for the upcoming League One season despite the failure of its CVA."

At a meeting on Friday, Otium Entertainment Group, who recently took over the Sky Blues from previous owners Sisu whom they have links with, and the club's main creditor, ACL, failed to come to an agreement.

Had the CVA, a payment scheme between an ailing company and its creditors, been accepted, the club may have been able to come out of administration.

However, ACL expressed its concerns over the club's agreed groundshare at Northampton's Sixfields Stadium and the club's financial future, leading it to reject the CVA alongside HM Revenue and Customs.

The day prior to the creditors' meeting, ACL lodged an official complaint against the Football League over the League One side's 34-mile move to Northampton.

It claimed that the Otium Entertainment Group had no right to request the move as its takeover of City had not been completed.

An ACL statement explained its decision to reject the CVA: "This decision was based on ACL's twin aims to first keep Coventry City playing in Coventry; and second, to ensure that Coventry City is financially viable for the next few years and beyond.

"This last point is especially important given that CCFC has been the subject of a 'catastrophic insolvency' in the hands of its previous owners.

"The CVA proposals put forward by the administrator simply do not address these obvious concerns. And these concerns are not only the concerns of ACL - they are the concerns of all Sky Blues supporters, and should be the central concerns of both The Football League and The Football Association.

"We would welcome some new proposals as soon as possible."

Under the terms of the deal between ACL and Coventry City over the Ricoh Arena, which has been the Sky Blues' home since 2005, the club had been paying £1.2m in rent per year, and only received a limited share of the catering and parking revenues from matchdays.

Eventually, the Sky Blues' debts to ACL mounted to £1.3m leading to CCFC Ltd going into administration and the club being deducted 10 points by the Football League last season.

The rent row resulted in the club agreeing a three-year groundshare with Northampton, and searching for a new permanent home in the city.

But in a bid to keep the club at the Ricoh, ACL offered a reduced rent of of £150,000 in League One, rising to £400,000 if the club returns to the Championship.

After the Football League's decision, a Coventry club statement read: "CCFC Ltd [the company that entered administration] will be put into liquidation after ACL failed to accept the Company Voluntary Arrangement (CVA) put forward by the administrator.

"Rather than the statutory 15-point penalty, the club will now receive a 10-point deduction going into the new season while the awarding of the membership of the Football League provides certainty for the future.

"Coventry City have also been cleared to play their home matches at Sixfields Stadium."

The Sky Blues start the League One season away at Crawley on Saturday.