Cats show Premier cash does count

Jun 3 2009 by Peter McCusker, The Journal

SUNDERLAND football club has demonstrated the financial clout the Premiership brings after seeing annual turnover more than double to over £63m during its first year in the top flight, writes PETER MCCUSKER.

Accounts just published by the club also saw its losses shrink from £13.6m, in the year it was promoted from the Championship, to £2.2m in its first year back in the Premiership – the 2007-2008 season.

SAFC also saw TV revenue increase by 450% to £35.6m, sponsorship revenue double to £8.2m and gate receipts rise by 51% to £13.6m.

The figures graphically highlight the financial difficulties near neighbour Newcastle United now faces after being relegated to the Championship last month. Football finance expert Professor Tom Cannon, of Buckingham Business School, said the results demonstrate the dramatic difference the two divisions can make to a football club’s finances.

But he issued a note of caution to exuberant Sunderland fans when he questioned the financial muscle of the club’s new owner Ellis Short.

“There is not a gap anymore between the Championship and the Premiership – there is a chasm,” he said.

“It is incredibly simple. If you’re in the Premiership you pocket at least £30m more in television money. Then there is the additional sponsorship income and the additional gate money. A club’s income can increase threefold moving from the Championship into the Premiership.”

The accounts also highlight that the shareholders, who at the time were the Irish-based consortium Drumaville, were owed £36.6m by their trading division the Sunderland Association Football Club Limited. In August last year American businessman Ellis Short purchased 30% of the shares from Drumaville, and last month he purchased the rest.

It is estimated that he has spent around £15m buying the club, he is likely to have spent further millions clearing off Drumaville’s debts, plus money for transfers last summer bringing his total outlay to a reported £80m. There is also talk of a £50m transfer pot being made available for players this summer.

However Prof Cannon continued: “We never see Mr Ellis’ names in the Forbes list of wealthy individuals and reports he is a billionaire appear misplaced to my mind.

“Mr Ellis is a private equity executive. He buys businesses and attempts to realise the value from those companies. He may be worth hundreds of millions but his track record is not one of spending money. It is one of realising value from a business.”

Sunderland’s accounts showed that the highest-paid director received £939,317 in the year to July 31, 2008. This is in the middle-to-high end of the chief executive salary bracket says Mr Cannon, with Manchester City, Manchester United and Chelsea all in the £1.3m-plus bracket and clubs like Everton in the £600,000 bracket.

The club’s staff costs rose to £32.8m from £21m and the total number of full-time employees rose to 267 from 239, with playing staff increasing from 49 to 61.

No one from the club was available for comment on the figures.