Sunderland embarked on an almost unprecedented summer spend following promotion back to the Premier League
It was a summer beyond the hopes and expectations of any Sunderland fan, with the Black Cats showing an almost unprecedented ambition and aggression in the summer transfer market.
So just how did they pull it off, and what might the future implications be of their heavy spending? Here we break down everything fans need to know...
Why net spend is the key figure when understanding Sunderland's summer transfer business
While Sunderland's level of spending this summer has been widely debated, key to understanding their approach is to put it in the context of the money they had already raised. Sunderland had significantly strengthened their financial position over the last twelve months, even aside from the riches gained by winning promotion at Wembley. They sold Jack Clarke to Ipswich Town for an initial £15 million, Tommy Watson to Brighton in a deal that could eventually reach around £11 million and Jobe Bellingham to Borussia Dortmund in a deal that will likely in time exceed £30 million.
That means their net spend this summer is around £100 million, with around £150 million thought to have been committed in incoming transfers. That could rise in time to around £180 million due to add-on clauses, but many of those are deemed unlikely to be triggered. It's a significant sum, clearly, but not a reckless one. Particularly when you consider that even in the worst-case scenario where Sunderland are relegated this season and don't come straight back up, they will bank around £200 million in TV revenues and parachute payments over the next three years.
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Even so, how did Sunderland manage to do this while remaining PSR compliant?
PSR limits Premier League clubs to losses of around £105 million over a three-year period, though in the case of a promoted club such as Sunderland it is actually £61 million. For this season, their accounting period will encompass the current campaign, 2024/25 and 2023/24. Scratch a little beneath the surface and you quickly begin to understand why PSR wasn't a factor for the club this summer in the same way it is for most promoted teams.
In 2023/24, bolstered by the sale of Ross Stewart to Southampton, Sunderland posted a loss of £8.1 million. A significant sum, but lower than most Championship clubs and certainly lower than most competing at the very top end of the table. Then there is 2024/25. Those accounts won't be released until March or April next year, but we can surmise that they will be a very strong set of accounts from a PSR perspective. All three of those aforementioned sales will be included in those accounts, with Watson's posted as pure profit given that he is an academy graduate. Given the relatively modest sums spent to sign Clarke and Bellingham initially, their departures will also massively bolster Sunderland's accounts. They did invest in their playing squad through acquisitions such as Wilson Isidor and Milan Aleksić, but not to anywhere near the same level as the funds brought in. There will undoubtedly be promotion bonuses to consider as part of the picture of the whole promotion year but it's a campaign that essentially took PSR out of the equation this time around.
Sunderland have also been aided by their wage bill, which was modest by Championship standards. Their wage bill for 2023/24 was the ninth largest in the Championship and while that will have grown again last season, their financial liabilities when winning promotion were far smaller than most clubs who go up, many of whom are still carrying Premier League contracts from previous years.
That meant Sunderland could invest early and aggressively without worrying about pre-existing costs. While the hierarchy were understandably criticised at times during the Championship era for not investing more in experienced second-tier players, this approach paid off this summer when Sunderland found themselves far leaner than most newly-promoted sides. Crucially, they could build their squad and then offload players, rather than having to juggle the two.
Finally, it's worth noting that their spend this summer doesn't mean they have a £150 million hole in their accounts. For PSR purposes, fees are spread over the length of a contract through a process called amortisation. So a £20 million signing who agrees a five-year deal will actually cost £4 million for each year of that contract from an accounting perspective. When you consider the increased TV revenues that will flow into the accounts this season, you can see why Sunderland should come in well under that £61 million figure for the three seasons in their current PSR period.
Will there be consequences if they are relegated from the Premier League this season?
There will be, though that is the case for any relegated club.
Sunderland will need to offload players to stay compliant within the financial rules in the event of relegation but that has been something firmly in the club's mind within their recruitment this summer. Though they have been more flexible this summer in spending fees on older players, the bulk of their investment has been in young players with high resale value. Players such as Habib Diarra, Chemsdine Talbi and Noah Sadiki were highly sought across Europe last summer and will be again after a campaign of Premier League football bolsters their development even further. Sunderland have also had a very successful summer in agreeing significant contract extensions for some of their best young players. Eliezer Mayenda, Chris Rigg and Trai Hume are all under contract until 2030, which significantly strengthens the club's position in the event of a relegation. Put simply, Sunderland should be in a very strong position to raise significant revenue if they can't stay up, before starting a phase of renewing the team for the new campaign.
Sporting director Kristjaan Speakman also told The Echo last week that the club remained very mindful of the mess they inherited when arriving at the club in the 2020/21 season, thus heavily hinting that there are safeguards across the board in terms of contract clauses should the team drop out of the Premier League.
And what happens if they stay up - will their spending be impacted by this summer's outlay?
It's clear Sunderland couldn't spend this much every summer, but that's not the plan. Sunderland hope they have now build the core of a squad which can stay in place and grow over the next few years, supplemented by a few high-quality additions. Sunderland would need a surge in revenue, most likely through European football, to sustain this level of spending as their wage bill inevitably grows.
Their PSR position should remain relatively formidable if they stay up, though. In that scenario, their three-year limit will rise to £83 million and that excellent return from 2024/25 will still be included. If they stay up again and that set of accounts drops out of the cycle, they will have the extra headroom of their loss limit rising to £105 million on their third season in the Premier League. The reality is that in this scenario, their progress will inevitably mean players are performing well and attracting interest. Sunderland will almost certainly continue to supplement their revenues with the occasional sale, as clubs like Brighton have done well in recent years to maintain and then advance their position in the league.
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