Kyril Louis-Dreyfus and Juan Sartori could be looking to emulate Tony Bloom’s strategy at Brighton
Football finance expert Kieran Maguire has speculated that Kyril Louis-Dreyfus and Juan Sartori could be looking to emulate Tony Bloom’s strategy at Brighton by delaying a £20million equity conversion.
Sunderland’s latest set of accounts confirmed that the club's debt to its holding company Mercator, which is owned by Kyril Louis-Dreyfus and Juan Sartori, rose to just shy of £20million.
Though Sunderland are not paying any interest on the debt, the club's owners also continue to insist that this will be converted to equity at some stage, which means that there are, in principle, no financial challenges for the club as a result of this essentially internal debt.
Though Sunderland’s owners have said for several years that the equity conversion will happen, there has been no explanation by the club for the ongoing delay, which has been noticed by fans and football finance analysts alike and has prompted some concern.
“The reason why the loans from Mercator haven't been converted into equity just yet could be due to some form of private arrangement between Louis-Dreyfus and Juan Sartori.” Maguire speculated after the club’s accounts were released to the public.
He continued: “They might have decided who's going to contribute the most and under what circumstances would that cause involve what would happen if Sunderland are promoted this season or another season. So, there's a variety of reasons why debt isn't converted into equity.
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“Sometimes it's tax planning, sometimes it's long-term financial planning. It could be that they might follow a similar approach to that of Tony Bloom of Brighton, who put £400million in as loans and said he'd only take it out if the club started being profitable in the Premier League, which it has done for the last couple of seasons. If that's not the case, then the money's not taken out.”
What Sunderland have said about their financial performance
The notes accompanying the accounts, signed off by Kyril Louis-Dreyfus, read: “Sunderland’s business model continued to leverage robust ticket sales and sponsorships, supported by strong season ticket uptake, reflecting solid fan loyalty. With over 35,000 season ticket holders, Sunderland maintained the highest attendance rates in the Championship, 9th highest in English football, ensuring the club drive consistent matchday revenue.
“Despite rising operational costs, partly due to the cost of living and raw materials, the club was able to maintain a stable financial footing, supported by prudent expenditure and strategic investments focused on long-term returns. Looking ahead, Sunderland AFC’s strategic focus on sustainability, fan experience and community-centred growth places it on a solid financial trajectory for the upcoming financial years. With ambitions to return to the Premier League, the club is positioned to capitalise on its investments, expanding its supporter base and elevating Sunderland’s regional economic impact.
“The balanced approach to growth, sustainability and fan engagement underpins Sunderland AFC’s strategy for resilience and continued success, aligning the club’s financial health with its community-centred mission.”
Your next Sunderland read: The accounts can be read in full here.