The Accounts Are In

Sunderland AFC Limited, the company behind the club, has filed its accounts for the year to 31st July 2018 or, in English, the club’s Championship relegation year accounts are out.

It includes the takeover of the club and, as result, records the resignation of Messrs Short and Bain as directors and sees Donald and Methven join the board.

The accounts are very early in the new owner’s involvement, demonstrated by the fact that Tony Davison and Juan Sartori are not mentioned.

Accountants (like me) will be interested that the accounts are no longer checked and filed by the largest accountancy business in the UK. This work has now moved to a firm in Witney, Oxfordshire who were also responsible for all of the paperwork to do with the takeover and Stewart Donald’s other business interests. As an accountant, this is not a concern for the club. Most business people have accountants they trust and, it would seem, Stewart Donald is just such a businessman. To non-accountants the difference is that this year’s accounts are not as shiny and detailed as previous years.

So what do we learn?

Profit (well, loss)

The money ‘in’ for the club fell from £124m to £64m having fallen out of the Premier League. £8m of that is a fall in sponsorship and £47m of the drop is a fall in TV and media money. No big surprise there but, when written down, it’s not pretty.

What is very impressive is the management of costs against that income. Bain and his team have reduced costs from £160m to £82m. That is a staggering achievement. (I appreciate the huge implications that brought but, let’s say he did nothing. Costs of £124m against income of £64m and we’re probably looking at administration or worse for the club.)


The club wrote off players contracts that had been valued at over £12m in the year while making a profit on disposal of players of £6m.

At the end of July last year, we were owed £16m for players of which the expectation was that £4m would still be outstanding now (we won’t know if they’ve now been paid or not). However, we owe £18m.

A lot was said about whether or not amounts we owed for players was covered when the new owners took over. Those figures net off to show that the club owed only about £3m for players over what we owed others. Far better than many clubs (and much better than we’d been previously!).

Debt And Shares

The accounts are the first legally required document which had to detail exactly who still owed what to whom. And, you’ll be pleased to hear, it’s all exactly as expected. The Short debts were either written off completely or turned from debts to shares (meaning he could sell them but couldn’t claim them back for ever more). And, as we know, those shares have now been fully paid for by companies owned by Donald, Methven and Sartori.

Is There Any Debt?

Yes. At the end of July last year, it appears that Stewart Donald’s company is owed about £700,000 and others are owed around about £4m. This is unsecured debt (a bit like an overdraft rather than a mortgage) so unlikely to be anything to worry about. It could well be money owed to former employees like Martin Bain and Chris Coleman.


The best single piece of news is that, while in July 2017 the club’s purest book valuation was minus £117m. A year later it was worth £9m. That shows the dramatic effect of reducing the costs and the extraordinary effect of Short removing the debt that weighed so heavily over the club. The accounts suggest Bain took just under £2m out of the club in the year in question but, I think, from a purely survival point of view, he did his job and possibly started the corner being turned.

The club accounts were never going to show a huge amount of detail and, as expected, where possible, the accountants have removed anything they’re allowed to. However, there’s enough in there to show that what we had been told about the takeover was true. The debts were written off, the costs were reduced (and this project has continued under the watchful eye of Tony Davison) and, other than a relatively small and plausible amount, the club started this pre-season with no debts.

Now, what happens next in a better structured, debt free, desirable to investors business? Well that will be very interesting…