Black Cat Gypsy
Striker
I know some of you like this stuff. Interesting read and makes a bit more sense to thick heads like me.
I've cut and pasted it as well because the Echo website is awful.
Sunderland AFC failing to get out of League One before Premier League parachute payments dry up ‘does not bear thinking about,’ says a leading football finance expert.
The club released its latest financial results, for the year to the end of July 2018, on Monday.
The accounts make clear the financial impact of relegation, with turnover down by almost half - from £123,504,000 to £63,691,000 -largely due to the collapse in the club’s TV and media income.
The loss of Premier League TV payments saw television and media payments fall by almost £47million to £48,849,000 including the relegation parachute payment.
Gate receipts, sponsorship and royalties, conference and banqueting and retail and merchandising income all dropped.
And although former chief executive Martin Bain is not mentioned by name, the highest-paid director, understood to be him, received £1,881,478, including £1,064,498 in compensation for loss of office and £67,924 in pension contributions.
Liverpool University lecturer in football finance Kieran Maguire said that although the fall in revenue had been anticipated, it was still ‘a fairly significant amount.’
“Matchday income dropped by a quarter and commercial income took quite a hit too, but it was still the second highest turnover in the Championship,” he said.
“The highest was Villa, with £68million, then Sunderland with £64million and Boro and Norwich with £62 million - all the clubs that had parachute payments.”
Leeds United, on the other hand, who have been outside the top flight since 2004, had turnover of £40million in the same period.
Sunderland still being in the third flight when the parachute payments stop ‘just does not bear thinking about,’ said Kieran.
“That was worth £41.5million last season, it is worth £30million for this season and then £14.5million for 2019/20,” he said.
“Then you are relying on the English Football League TV deal, which is worth about £7million in the Championship. It is about £800,000 in League One.”
Promotion was ‘absolutely essential,’ he said: “The overheads of running a football club are very high.
“The club did manage to cut the wage bill by 45 per cent, from £84million to £47million, but they still had other running costs of about £20million.
“I am sure Stewart Donald is going to be looking at this.”
A lack of long-term stability at the club had contributed to the problems, with a reliance on loan players and rapid turnover of managers, each bringing in their own players on lucrative contracts, making long-term planning impossible.
“Taking players on loan is a gamble,” said Kieran.
“Huddersfield in the previous season had a couple of loan players who turned out to be absolutely superb for them - but still, they are loan players for a reason.
“There is no strategy if you are relying on loan players and if the typical managerial tenure at the club is 12 to 14 months, you have a similar problem.
You have players on contracts they don’t want to walk away from, so they become legacy players for the next two to three years until their contracts expire.”
The new owners appeared to be taking the club in the right direction - but owed a big debt of gratitude to the previous regime: “They are certainly talking a good game,” said Kieran.
“I think some of the things they have said won’t have gone down well with fans but they have inherited a clean sheet.
“I know Ellis Short is unpopular with a fair amount of the fans but he effectively walked away from £150million he had invested in the club.
“Whether that money has been well invested is another matter but he delegated that to the management. He delegated people to make decisions on recruitment.”
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I've cut and pasted it as well because the Echo website is awful.
Sunderland AFC failing to get out of League One before Premier League parachute payments dry up ‘does not bear thinking about,’ says a leading football finance expert.
The club released its latest financial results, for the year to the end of July 2018, on Monday.
You must be logged on to see external links
The accounts make clear the financial impact of relegation, with turnover down by almost half - from £123,504,000 to £63,691,000 -largely due to the collapse in the club’s TV and media income.
The loss of Premier League TV payments saw television and media payments fall by almost £47million to £48,849,000 including the relegation parachute payment.
Gate receipts, sponsorship and royalties, conference and banqueting and retail and merchandising income all dropped.
And although former chief executive Martin Bain is not mentioned by name, the highest-paid director, understood to be him, received £1,881,478, including £1,064,498 in compensation for loss of office and £67,924 in pension contributions.
Liverpool University lecturer in football finance Kieran Maguire said that although the fall in revenue had been anticipated, it was still ‘a fairly significant amount.’
“Matchday income dropped by a quarter and commercial income took quite a hit too, but it was still the second highest turnover in the Championship,” he said.
“The highest was Villa, with £68million, then Sunderland with £64million and Boro and Norwich with £62 million - all the clubs that had parachute payments.”
Leeds United, on the other hand, who have been outside the top flight since 2004, had turnover of £40million in the same period.
Sunderland still being in the third flight when the parachute payments stop ‘just does not bear thinking about,’ said Kieran.
“That was worth £41.5million last season, it is worth £30million for this season and then £14.5million for 2019/20,” he said.
“Then you are relying on the English Football League TV deal, which is worth about £7million in the Championship. It is about £800,000 in League One.”
Promotion was ‘absolutely essential,’ he said: “The overheads of running a football club are very high.
“The club did manage to cut the wage bill by 45 per cent, from £84million to £47million, but they still had other running costs of about £20million.
“I am sure Stewart Donald is going to be looking at this.”
A lack of long-term stability at the club had contributed to the problems, with a reliance on loan players and rapid turnover of managers, each bringing in their own players on lucrative contracts, making long-term planning impossible.
“Taking players on loan is a gamble,” said Kieran.
“Huddersfield in the previous season had a couple of loan players who turned out to be absolutely superb for them - but still, they are loan players for a reason.
“There is no strategy if you are relying on loan players and if the typical managerial tenure at the club is 12 to 14 months, you have a similar problem.
You have players on contracts they don’t want to walk away from, so they become legacy players for the next two to three years until their contracts expire.”
The new owners appeared to be taking the club in the right direction - but owed a big debt of gratitude to the previous regime: “They are certainly talking a good game,” said Kieran.
“I think some of the things they have said won’t have gone down well with fans but they have inherited a clean sheet.
“I know Ellis Short is unpopular with a fair amount of the fans but he effectively walked away from £150million he had invested in the club.
“Whether that money has been well invested is another matter but he delegated that to the management. He delegated people to make decisions on recruitment.”
