As Billy Bragg once sang, “When you wake up to the fact that your paper is Tory, just remember there are two sides to every story…”
The Daily Mail have produced an online article explaining the ‘REAL story of Sunderland's takeover’. It is, apart from a staggeringly poor piece of timing, utterly unsurprising with almost nothing new...
‘Stewart Donald and Charlie Methven used parachute payments to buy Black Cats with only £5m of their own cash, a year on they could pocket £40m by selling the club’
OK, we always knew that Short had guarantees relating to payment that involved the parachute payments. I first mentioned it in an article that appeared on this site on 31st July 2018. The message had been that Donald would pay £40m(ish) to Short but the security was around the bank account of the club and therefore the parachute payments were involved. In September, Charlie Methven seemed to say that the payments were being made linked to the parachute payments being received. That immediately made us wonder if, in fact, the money was being paid out of the club. That was confirmed when the club accounts and the parent company (owned by Donald) were published. Chris Weatherspoon and I reviewed these and published via ALS what was important (in our opinion) at the end of April. Chris tweeted a few thoughts at the time about the money being moved around and what it told us but, to be honest, we were more interested in on pitch action so didn’t push it too far. There’s nothing new here at all.
‘They committed £5million of their own money’
If a company is worth £10m purely because there’s £10m in the bank account, then taking out that money to give the seller what he’s owed leaves you with a company worth £0m. If you then add value of say £20m, you deserve the £20m profit you’ve made. If instead, the buyer of the company pays the £10m to the seller personally and leaves the company money in the bank (so the company is still worth £10m), then adds £20m of value, he can sell the company for £30m. But remember it cost him £10m so his profit is still £20m. No one ends up with more or less as a result. My point is, it doesn’t actually matter in value terms whether the current owners paid Short, borrowed to pay Short or got the club to pay Short. If they sell at a profit, they’ll have done the work to generate the increase. The obvious downside is that the money could have been used on players or as security for next season’s needs. While this is fair comment, it can’t come as shock that the club has been trying very hard to keep costs and wages down to the bare minimum. Would we have frittered that money on the squad? I think it’s doubtful. Could it have been made clearer? Possibly.
The article is scathing about the club’s current owners. I wrote an article about them in May last year pointing out that we shouldn’t forget that they are business people. They are an insurance salesman and a PR guru. They were never Sunderland fans who were going to give their own homes and livelihoods up for the club. They were going to try and turn the club round, take it as far as they could and sell it for a profit if possible. As I said, a year ago, you only sell a club in our position for a profit if you’ve made us better. If that’s the case, what’s the problem?
‘They could now both make millions if they push through with plans to sell for £50m’
Well done them. And thanks for your work in turning the club around. The article goes on to quote Donald as saying he isn’t leaving and Methven saying Donald might sell a bit. I have a lot of time for Donald, but I think his desire to tell people what’s happening in every situation has sometimes led to him telling people what he thinks they want to hear. I’m not saying he’s not telling the truth, but I think sometimes he gives a vague answer which can be interpreted in a number of ways. He’s happy for people to take what he’s said however they want to. Do I think he’ll leave this summer? Personally, yes, I think he will. If he doesn’t, fine, glad he’s staying. Certainly not a news story at this point.
The article moves on to ‘Oxford-educated Methven’ who ‘has been particularly masterful. He can stroll into the Colliery Tavern, a pub across the road from the Stadium of Light, in his red chinos on match days and enjoy a pint with the locals.’
Let me summarise that – award winning graduate PR guru is good at mixing with people. Shocker. But then the article goes on the attack in an utterly bizarre way.
‘The host of the podcast was hired after being one of those questioning the details of the takeover deal, in particular whether Donald planned to pay Short with Premier League parachute payments rather than his own money.’
Extraordinary. The only reason you’d write this is to suggest that Connor Bromley was hired in return for those podcasts or for asking the right questions. If I’m totally honest, I felt Connor didn’t push Donald on those points as I’d have like him too but that’s because I’m an accountant who wanted the nitty gritty. His appointment by the club (months later) was nothing to do with that. He is simply the latest in a relatively long line of Sunderland fanzine writers and broadcasters to move on to work with the club or local press. It’s a progression we should be proud of, not one that we should allow papers like the Daily Mail to besmirch.
‘When contacted by Sportsmail, Methven did not deny any of this. He did not deny that parachute money was then used to cover the remaining part of the deal.’
Well, as the financials that have been published a month ago confirm it, I don’t see why he would.
‘Sportsmail has seen evidence that £9.6m of that initial £15m payment was also financed using parachute money already sitting in Sunderland’s accounts.’
Yes, ALS covered this a month ago when the accounts were produced. ‘Seeing evidence’ equates to opening the companies house website and reading what’s there.
‘The concern, expressed by insiders, is whether Donald has the funds or inclination to continue financing Sunderland.’
Those who read ALS frequently will have seen, since the Checkatrade final when meetings were held with potential investors, a few articles highlighting the intention of the owners to get in investment to fund what is hopefully a Championship campaign. That isn’t new information. On Twitter Keith Downie got abused for publishing the story he’d received from sources who clearly wanted it publishing which Donald then confirmed. Is there concern? Not that I know of. Does it show that the owners are very good at releasing stories and titbits and then opting to deny them to make it a bigger story? Well, I’ll pass on answering that but I think Keith’s autobiography will be worth reading one day.
‘No regulations will have been breached and no laws would have been broken. But two men who seduced Sunderland’s fans with their long-term vision for ‘a family club’ would return to their own family homes in Oxfordshire significantly richer.’
The club feels more like a club than it has in ten years. A family club? Yes. A passionate, reinvigorated club? Definitely. Have they broken any rules? No, as confirmed by the Mail. So, what’s the problem? If they return to their Oxfordshire houses (which, by the way, they never left) richer it will be because they have been successful in turning my club around. If they leave at that point, I will thank them, shake their hand and wish them nothing but the best. They have, in no way, ripped off the club or the fans and, what I’m happiest about is that, whenever they leave, I feel their long term vision (that apparently seduced me) will see the club continue to move in the right direction. Not the pick and mix approach of former directors.
In summary, there’s really nothing here that’s especially new and absolutely nothing that’s shocking. Now, can we all get back to sleepless nights about Clive Mendonca and the Mail can get back to making up stories about immigrants? I’ve got a match to go to on Sunday…