The latest SAFC set of accounts for the season 16/17 have just been released. Cast your mind back to the start of that season. It was party time in Chicken Town. Things had never been merrier.


Ellis Short had finally got his “man” as David Moyes arrived in a blaze of glory to replace Sam Allardyce. An appointment, met with almost universal approval amongst their support.


The previous season had ended with SAFC retaining their Premier League status at the expense of Newcastle United.  They’d beaten the likes of Chelsea and Everton in front of a packed stadium. Cue flyovers at St James’, Rafa Benitez masks, banners draped from the Tyne Bridge and endless taunts on social media telling us to “enjoy Burton”. Happy days on Wearside!


For years, they’d bought players they couldn’t afford, were making eye watering annual losses and had a crippling debt but who cared? Certainly not their support or any of the media, local or national. They had a sugar daddy propping up their plastic club. As long as he continued to underwrite the losses and they managed to avoid relegation, everybody was happy. Their strategy had worked and Newcastle United’s strait-jacket Mike Ashley model of trying to live within it’s means had failed miserably.

Fast forward two years and the sugar daddy has departed (Fewmin Texas Millionaire. Flees To Miami, Foregoing The Mortgage), three managers have been sacked, the stadium is more than half empty, the club has crashed into League One and spaced out supporters are defecating in the stands.


Whenever there are these types of implosions (and to be clear, this is the mother of all implosions), there’s always an inquest played out by outraged supporters and media with the benefit of hindsight, into what went wrong and who was to blame. This analysis of their latest accounts will help provide the answers.


We’ll take a look at what the accounts tell us about the clip of Sunderland in 16/17 (relegation #1). We’ll follow that up with a look at how those figures contributed to the comedy of their relegation in 17/18 (relegation #2). And finally, we’ll examine what it may mean for the club’s outlook next season and beyond.


The Ghosts of SAFC Past, Present and Future. With Martin Bain playing the leading role. Let’s start with the ghost of SAFC past, the 16/17 figures.


  1. Ghost of SAFC past – 16/17


First up is the £9.9m loss for the year. This was a considerable improvement on the previous season’s record loss of £33m. But still a loss. Their eleventh consecutive loss. Not unlike their Championship form one might unkindly observe. Accumulated losses now total £212m.  #eleveninarow


With the massive increase in income from the new TV deal, it seems staggering any club could possibly record a loss but Sunderland somehow managed it. They were the only club in the Premier to do so.  Cap doffed to all concerned, an extraordinary effort.


And just to be clear, these figures also include the receipts from the sale of Jordan ‘get the rave on’ Pickford who managed to get out of the club he loved so quickly his transfer was included in the 16/17 accounts. So how did they manage it?


As always, two sides to the coin – costs and income. Let’s look at both.



  • Match Day income

Match Day income reduced by £1.4m in 16/17 to £8.955m. This is the lowest gate money they have recorded in over ten years. In 2009, SAFC made £14m in gate receipts. On the current direction of travel, SAFC will be paying their supporters to attend games in 2024.


It was recently reported in the national press Sunderland gave away about 9,000 free tickets per game in 16/17. Whilst this figure sent SAFC fans into an apoplectic frenzy of denial, it appears it was actually a conservative estimate.


Sunderland fans on average pay less than £11 a game. To put that in context, the figure for Newcastle United supporters is about £26. And this brings us back to a recurring theme in true faith:


the difference between the respective supports as evidenced by cold hard facts.


Newcastle United is predominantly a working class club which is backed through the turnstiles by fans paying over their hard earned cash – a true supporters’ club. Sunderland, on the other hand, is a club where the fans contribute very little and have been content to rely on a foreign billionaire private equity fund investor to supplement their income.


Those Durham Miners flags must stand very proud in the ground.


It must be particularly galling for Ellis Short to receive such abuse from SAFC’s diminishing support for not investing in the club when their supporters hardly pay the price of a match ticket to go to the Bungalow of Light.


From 2009 to 2017, if SAFC had contributed the same as NUFC supporters to their match day income (which included a season in the Championship) then it would have reduced their losses by over £78m or roughly halved their debt.


  • Commercial income


Commercial income reduced by £4.3m in 16/17 to £21.8m. Getting underneath the figures, it shows that whilst receipts from Sponsorship and Merchandising have held up relatively well, the drop was mainly driven by a reduction in income from Conferencing, Banqueting and Catering.


Presumably, this has been impacted by the absence of concerts at the Bungalow. This followed a decision by Sunderland City Council to remove its financial support after it was revealed that £400,000 had previously been paid to SAFC to assist in the staging of concerts with the economic benefits from those concerts largely benefitting the hotel and restaurant trade in Newcastle. Cheers.


  • Broadcasting income


The massive new Sky TV deal came into effect in 16/17 generating an additional £24m of revenue for the club. The £95.6m that they received in broadcasting made up over 75% of their turnover in 16/17.


This reliance on broadcasting income isn’t uncommon amongst Premier League clubs although it was particularly evident at SAFC. More on the impact of the layered withdrawal of this income source later.



  • Wages and salaries

There seemed to be a widely held belief amongst SAFC fans that their wage bill would reduce in 16/17 following the sale of the likes of Stephen Fletcher. They were spectacularly deluding themselves.


Wages marginally increased in 16/17 and were basically maxed out under the Premier League Financial Fair Play rules restricting their ability to purchase players in the January window (for details on how FFP contributed to SAFC’s relegation, see my previous article).


As a footnote, nice to see that Martin Bain was paid £1.2m for his sterling work. The former male model obviously has the golden touch. We hope he is negotiating a contract extension and a hefty raise. Sunderland fans ignored true faith’s warnings regarding Bain and his activities at Rangers even though we let them know he was attending court cases involving the cat’s cradle of financial skulduggery from his time at Ibrox even while he was at Sunderland. Neither did the local media shine much of a light on this either.


  • Other expenses


The only thing to mention here is the Alvarez court case. Nothing epitomises the lunacy at Sunderland more than this ruling. SAFC were ordered to pay £9.7m to Inter Milan for the services of the Argentinian midfielder despite telling him not to return to the club after a brief uninspiring period at the Bungalow. Still some debate on Wearside whether he was a better signing than Jack Rodwell.


  • Player trading


Despite recording a record loss the season before and the protestations of laughing boy David Moyes, the figures show that as well as paying top wages, SAFC were strongly backed in the transfer market by Short in their relegation season (additions to intangibles totalled £47.5m).  Indeed, this saw the arrival of their record signing, N’Dong (later unkindly nicknamed N’Donkey), to the Bungalow.


Player sales amounted to £43m which obviously include the Jordan Pickford departure at the end of the season. The club recognised a permanent impairment to the values of players of £14.3m which basically means that they thought some (some?) players were worth less than their book value. Who’d have thunk it?


The final thing to note here is the amounts owed on player transfers amounting to £45m.  To be clear, this is not categorised as “debt” for accounting purposes but as a trade creditor. SAFC are committed to paying £23.3m in 17/18 and £22m in 18/19.



  • Debt


Net debt rose from £110m to £125.7m with Short loaning the club yet another £21m (now totalling £91m). More on that later.


  • 16/17 summary


If you look up “basket case” in the Oxford English Dictionary, you will simply see a single word –  “Sunderland”. These accounts can be summed up in one word – fucking catastrophic. I no longer hear pundits talking about doing a “Leeds” when describing the risks of a financial implosion and plummeting down the leagues. It’s now known as doing a “Sunderland”.  How cute.


But they’ve been and gone. What about this season, 17/18, the relegation sequel season?


  1. Ghost of SAFC present – 17/18


If you thought the 16/17 figures were bad, you can rest assured that they will get an awful lot worse when the figures for 17/18 are released this time next year.


We can make the following assumptions. Let’s start with a baseline of their operational loss (before player trading) of £38.9m.


We know that they will lose about £40m in broadcasting income (see table below). This loss of broadcasting income is a huge hit for any club to take but particularly for one who is so reliant on this income source.


But I think this is only the third biggest disaster to befall them this season. Relegation to the third flight is the second biggest and I will leave the biggest disaster until later (oh Tom, you old tease!).


  • Match Day income


Their average attendance has dropped by about 14,000 (“Sunderland til I die?”) so we can safely assume that match day receipts have dropped by about a third to about £6m. This is broadly in line with what Bournemouth generate on 12,000 gates.


  • Commercial income


As gates have dwindled, we can also assume that merchandising and commercial revenue will have followed (I don’t see so many overweight SAFC fans sporting their badly fitting colours in the Metro Centre nowadays).  Let’s estimate another third lopped off to take it down to £14m.


  • Player trading


So we can assume that revenue has collapsed by roughly £50m. What about player trading? It’s probably a very small surplus of less than £1m as a result of the sale of Mannone for £2m offset by the purchase of an entire new team for about £1.5m.


  • Wages


So on my back of a fag packet calculations, to breakeven, SAFC would have had to reduce their costs this season by a mere £90m!! Cometh the time, cometh the man – Enter Martin Bain.


We know that the wage bill in 16/17 was £84m. We are told that the majority of players had a relegation clause reducing their wages by 40%. The exception to this is purportedly Jack Rodwell who is still earning (in the loosest sense of the word) £73k a week. Easily likely to represent the entire weekly payroll and then some of an average League One club.


A stack of mediocre players have left either on loan or on free transfers and a stack of mediocre (but slightly cheaper) players have arrived either on loan or on free transfer. Difficult to estimate but let’s be generous and take a punt that their wage bill has reduced to about £50m, a reduction of £35m. Despite this drop, SAFC supporters will no doubt be delighted to know that the wage bill will still be amongst the highest, if not the highest, in the Championship.


  • Summary


So the loss for 17/18 will be in the region of £50m-£60m (feel free not to bookmark) and it’s likely that Short will have provided further loans to keep the club afloat. And that leads us neatly to the biggest disaster, in my opinion, to befall SAFC this season. The suspense is over. It’s the departure of Ellis Short.


  1. Ghost of SAFC future – 18/19 and beyond


It’s difficult to put into words how much SAFC have relied on Ellis Short since he took over the club in 2009. Without him, the club simply would not be a going concern.


He was their once in a lifetime opportunity to compete at the highest levels of the Premier League  et his departure was celebrated like a Newcastle United defeat on Wearside.


And now he’s gone. And with him, SAFC’s chances of ever competing at that level again without a miracle worker of messianic proportions.


He’s handed over the reins to ex-Eastleigh owner, Stewart Donald and a consortium of foreign investors of whom we know little. We believe Donald is the major investor and shareholder. Donald may be rich compared to you and I but is he rich enough? We’ll answer that question separately in later blogs as more becomes known about him and the “international consortium” he is supposed to be fronting.


  • Debt


What we do know is that Short has written off the outstanding debt (having already written off £101m). This is an incredibly generous gesture from Short and gives SAFC a fighting chance to recover.


But if anybody thinks that is the end of SAFC’s financial problems, they are sadly deluding themselves. Let’s look at what Donald will have to contend with.


  • Income


We know that parachute payments end in 20/21. We know that sponsorship will be renegotiated at a fraction of the value of the deals agreed in the Premier League. For example, the Defabet shirt sponsorship ends in 2019 and is worth £6m a season. A new deal in the Championship or League One will be nothing like as lucrative.  We can safely assume that crowds, and gate receipts, will dwindle further. So revenue will plummet but what about costs?


  • Costs


Whilst Short has written off the debt, it’s unlikely that this will include the money owed on player trading. As highlighted above, this will mean that they have to pay £22m in 18/19, a huge slice of the parachute payment.


The wage bill in 18/19 will have to comply with the League One Financial Fair Play rules (or the Salary Cost Management Protocols as they’re known in League One). Only 60% of a club’s turnover can be spent on wages. Whilst this will mean that SAFC still have by far and away the largest budget in League One, it still presents significant challenges to SAFC.


Rodwell and co will no doubt still be there taking a big chunk of that budget. They will have to replace loanees and those leaving at the end of their contracts. As has been the case in recent seasons, SAFC will be fielding a completely new side in the summer in League One. To comply with the SCMPs, players like Kone, Lens and Borini will be sold for a fraction of their value to reduce the wage bill.


  • Summary


Donald’s net worth is less than Short earns in interest from his enormous wealth. He’s made noises about having a “sustainable” model which will be a complete sea change from the Ellis Short era.


But the mess that he’s inherited will make that extraordinarily difficult in the short term. And as he attempts to turn the club around, it’s likely they will continue to post big losses. In the past, Short underwrote those losses. Donald simply hasn’t got the personal wealth to do so. Unless the foreign investors are prepared to replace Short in pouring money into a black hole, they will need to secure external loans which will come at huge rates of interest.


In my previous articles on SAFC, I’ve made clear that there wasn’t the remotest of possibilities that they would go into administration as long as Short was there. With his departure, that has now become a massive risk.


When the reality of living with a “sustainable” model dawns on SAFC fans, I give Donald two months before he too becomes a target for the hate.


The honeymoon period might not last long.



If you want to know more about Sunderland’s car crash financial position and/or you think a Newcastle United fanzine might be being harsh on the geniuses who have been running that club for the last ten years then we recommend Kieran Maguire and his piece Short Changed – in his blog Price of Football – Just click here 

If you  are a Sunderland fan who wants to kick off about us detailing the scale of the grotesque mismanagement and our amusement by it, don’t bother, your hate-filled, spite and nonsense won’t be published here. 

As time permits however, we will be examining the capacity of Sunderland’s new owners to deliver the dreams of a half decent club in the Premier League and what a “sustainable model” of running that club looks like in practice. 

None of this will detract from the analysis we will have on every bit of Newcastle United’s operations and Mike Ashley’s running of our club.