Pete Sixsmith finds depressing reading in a detailed analysis of football finances …
There was an excellent double page spread in Thursday’s Guardian about football finances. It was written by David Conn, a journalist who has been banned from Elland Road by Ken Bates for asking out loud who the real owners of Leeds United are. So, we Sunderland fans can see a fellow traveller here.
Unfortunately, he is not very positive about the Premier League in general and our beloved club in particular. His assessment is that the total losses of the PL are £484,000,000 and that the total debt of the 20 clubs reaches a staggering £2,500,000,000.
To the likes of you and me, these figures are incomprehensible. M Salut and I find it hard enough to understand our credit card statements let alone the balance sheets of a major organisation like Sunderland AFC.
Conn makes it clear that the Premier League clubs are walking a very fine line financially, with some far worse than others. Chelsea have a debt of £734m, Manchester United are £590m in the red, while neighbours City are £141m under the line.
In comparison with these three and the likes of Arsenal, Villa and the Mags, we are not that badly off. We have a net debt of £66m which makes up 2.6 per cent of the League’s total owed, while our nearest and dearest are £150m down. Wolves have no debt and took six points off us this season.
This is what Conn says about Sunderland;
State they’re in;
Difficult not to wonder whether this is how a US private equity investor Ellis Short imagined owning a Premier League club……… The £47m Short paid last year to bankroll a high wage bill……….. Sunderland needed the money to be bailed out of a probable financial crisis.
Even with Short’s financial support, losses do not look sustainable. Sunderland have to wrestle the wage bill down, while remaining competitive.
I like the term “wrestling”. If a player is to stay, he may have to have 3 five minute rounds with Steve Bruce, with no punching, no kicking and no gouging. I would back the manager against Anton Ferdinand but I think he may struggle against the street wise and considerably slippier Lee Cattermole. Bruce must be relieved that the likes of Lorik Cana and Lee Howey are no longer on our books.
Conn’s projection does not auger well for this transfer window as we seek to bring players in after another disappointing season. Free transfers are being mentioned, but it is the wages that push up the cost of a player and overstretch clubs.
We spend 83 per cent of our turnover on wages. Is this sustainable in the long run? I doubt it. Many of the PL clubs have similar figures – Wigan 89 per cent, Newcastle 90 per cent, WBA 82 per cent – but our losses last year, at £28m were greater than any of these.
Figures can be baffling, but the message that comes out is that only clubs who have seriously rich owners can win anything while the current structure remains as it is. This years top four are either owned by a modern day Croesus, have a huge multi-national fan base that brings in untold riches or have been able to sell property on their previous ground. We don’t fall into any of those categories.
Many fans seem to think that we have money to throw around this summer. I don’t think we have. It could well be that Ellis Short has made it clear that players coming into the club will have to understand that this club is moving towards a realistic wages structure.
We have attempted to keep prices down while spending large amounts of dosh. Arsenal are upping their prices by 6.5% and Monty an Rupert are rebelling. Niall Quinn knows that that kind of increase is not acceptable here, so the owner either pumps more money in or we get real. No big signings, just decent players who will, with good coaching and management, help us to improve in 2011-12.
Will that come under Steve Bruce? We await the outcome with interest.