Past, Present And Future... ALS Interview Charlie Methven. Part 2
After an intermission, here’s part two of the ALS Charlie Methven interview, in which SAFC’s Executive Director announces to ALS that the takeover is, for now, off, gives us an update on the running of the club and puts the record straight on a few bugbears…
ALS: OK, so let’s talk about how that will work and who’ll be involved. Who’s who around the boardroom table going forwards?
CM: At this stage there are no changes to the board. We’ve been open that we’re looking for investment but, for now and because of the time of year, we’ve decided to get on with the job in hand and keep talking to interested people in the background.
ALS: And why is investment being considered now? Has it cost more than anticipated?
CM: No, it’s not that. It's a multi-faceted situation. First, we came in at very, very short notice. I organised the deal with Ellis in late March 2018 and had to find financial backing for that agreement within days. The vast majority of people who you might approach would have told me straight away that that time scale’s too short - that due diligence on a business like that can’t be done in three weeks, let alone also pulling together the cash required in that short space of time. It’s just unrealistic. Then I spoke to Stewart and he stepped forward and said he’d do it.
‘I'll take that on. Yeah, I think you're right, it looks terrible but I reckon we can do this if we are smart.’
So that was a moment in time when swift action was required. And really, it was not for the faint hearted. What would have been ideal, from a financial point of view that is, would have been if we’d had an extra two or three months, we'd have been able to put together a slightly broader based Board who between them had the financial wherewithal to not just deal with the immediate situation, but then also deal with the medium term. Three years is quite a long time in football. But Ellis had already made the decision that, one way or the other, he was ‘out’ by the end of the season.
Juan came in to share the load a month or two later. And really, what we're doing now is just the continuation of that process of seeking the broader based financial support the club needs.
There are two different types of football clubs – ones that are living hand to mouth and others who are able to act strategically and are able to do the things they should do to grow because they have the right financial support to do that.
A lot of that is cash flow - it’s to do with the ability to say, OK, I can put in £3m now and I might get it back later on, but I've got that cash now and it's the right thing for the club now. Compare that to it being the right thing to do right now but not having the cash to do it. Then you’re having to try and just keep things bubbling along, as best you can. That is how a huge number of football clubs outside the Premier League are run and it really constrains growth.
We're approaching the stage where there are things that, for the club to grow longer term, will need to be invested in, so we need a good base of available capital to ensure the club can invest appropriately.
ALS: On the pitch or off it?
CM: Both. It can range from the relatively small things like putting a new sound system in the stadium to improve the fan experience, investing in the stadium itself, improving the corporate hospitality areas, that type of stuff, that's an investment. But it’s an investment made in the belief that you will please your fan base and customer base, and that more people will come more often, feel more engaged with the stadium and spend more there. But you need to have the cash underpinning that in order to be able to make those investment decisions.
In terms of on-pitch investment, again it’s not a matter of splattering cash around everywhere and running up an unsustainable wage bill again. It’s a question of being able to sign the right player at the right time, even if he is under contract to another club. All these questions are moot unless you have the financial wherewithal to finance the answer ‘yes’ if that’s the right thing to do.
ALS: In the papers, the rumours about potential investors saw your percentage ownership the only one not rumoured to change. Does that mean you’ll continue as you are for the foreseeable future?
CM: I don't know! Ultimately, I'm a small player in the capital structure so we'll see what other, more important people think. I would like to stay at Sunderland, because I would like to see the initial three year plan through: to balance the business; to see us becoming notably well-marketed and commercially sharp; to see community relations fully restored to the heart of the club; to see the stadium full and thriving in the Championship; to see our social media perceived as the best in the country; to really optimise the Netflix opportunity. At the moment, I think that my part of the job is still only a third done and I would like to back myself to complete that side of the job.
Having set off on the direction that we took last summer, I think it would be harmful for the club to have to change tack again. Some of the potential investors who have come forward wanted to just take the club over and go down a different route. We had offers that were very attractive financially but we had to turn them down because we didn't think it would be the right thing for the club. And that's not us being arrogant. It’s a question of, once you've set out on a three year plan you don’t stop and rip it up and start again after one year. It’s why we’re prepared to wait for the right people whose plan fits in with what we believe is right.
ALS: Does the lack of investment mean we’re financially at risk?
CM: It’s frustrating that this keeps cropping up. There is a small cabal of so-called supporters who seem intent on disrupting our efforts to bring the club together after years of disunity. All the published facts demonstrate that the club, for the first time in a generation, is in a strong position financially. It is a result of the deal that I negotiated with Ellis, the difficult steps we have taken to turn the club around commercially, the money that the vast majority of fans who have turned up and the money Stewart and Juan have invested. As a result of all of that, the club is: 1) debt free 2) almost breaking even 3) is close to breaking even in spite of having by far the largest playing wage budget in League 1 history.
Those are the facts, and they should be profoundly reassuring for supporters who were watching their club heading towards administration only a year and a bit ago.
We are as open as anyone to taking criticism on the chin. It’s entirely fair to ask whether a wage budget that size in League 1 could/should have done better than finish fifth. It’s entirely fair to ask us how the model we are putting in place would fare in the Championship. It’s entirely fair to ask what we can do to stop Academy youngsters moving on. It’s also fair to remind us that a club of SAFC’s stature should not be spending any more time in the third tier than necessary. But when you’re criticised for things that aren’t true, it’s not on. And it doesn’t help anyone.
It’s frustrating that fans who want to feel optimistic about the club’s future, and have every reason so to do, are continuously being misled by these wild accusations. The Daily Mail told us it was people claiming to be fans who encouraged them to write disparaging stories about the club.
ALS: But does it mean our signings will be bargain basement?
CM: It’s interesting that fans are still worried about free signings after last year’s signings were some of the stand out performers (McLaughlin, Maguire). It’s a function of how football at this level operates. There will be free signings but, as we showed last year, when money is needed to get a player that we want, we’ve done that. Last season we spent £5m on players. That’s more than the rest of the division combined.
We’ll be signing players who are the right players to move the team forwards and get promotion from this division. They might not necessarily be marquee signings but it’s about improving and developing the squad. Funnily enough it would probably quieten some of the so called fans we were talking about earlier if we bought someone for millions but if it wouldn’t be the right thing for the club we won’t do it.
ALS: If potential investors ask you the one thing they should know about Sunderland that you've learned this year, what would it be?
CM: The intensity. There's a cliché about the North East football scene that it’s like living in a goldfish bowl. And it is like that. It's unbelievable. You know, you can be at other clubs, currently much higher up the pyramid, where the pressure and intensity comes and goes. But Sunderland, the pressure doesn’t change. The pressure is absolutely relentless. And I think what you saw towards the end of last season was all of us who've been involved since the previous May/June – directors, management, players - becoming emotionally exhausted by the relentlessness of the pressure. Of course, you can't have one without the other. You can't have the unbelievably intense local football scene which produces the huge fanbase and all those players who've come into the academy without it also being highly intense and pressurised within the rest of the environment. The intensity is one of those things you can't explain adequately. However much you tell somebody about it, until they experience it themselves they won’t be able to understand.