Sunderland could stand to gain close to £200million from just one season in the Premier League...
Sunderland could pocket an eye-watering £198 million from just one season in the Premier League if they clinch promotion under Régis Le Bris.
That’s according to leading football finance expert Kieran Maguire, who has broken down the potential financial rewards awaiting the Black Cats should they make the leap back to the top flight.
With Sunderland having booked their place in the Championship play-off final, Maguire explained that promotion would unlock a huge influx of revenue, ranging from broadcast rights and commercial deals to increased matchday income. For club owners Kyril Louis-Dreyfus and Juan Sartori, the financial implications are massive. Even a single season at the top could significantly boost the club’s resources, whether they manage to stay up or not.
“If we take a look at Sunderland's broadcast revenue, if we start off there, they're probably getting around about £8.5million to £9million from the EFL and the solidarity payments from the Premier League,” Maguire told The Echo.Sheffield United finished bottom of the Premier League last season and they got £109million. That's likely to have gone up by next season if Sunderland are promoted.
“So I think it will probably be in the region of £111million or £112million. So that's good news for the club and on top of that, you've got solidarity payments. Worst case scenario, if Sunderland go straight down, then it's probably a further £80million.
“That's £190million to begin with, in terms of the financial benefit. If we then look at the other sources of income, your commercial deal, front of shirt deal, which in the Championship, if Sunderland are getting £500k at the moment, that's good.
“You can add a zero to that and more. You're probably looking in the region of £7million to £8million for the front of shirt and then your third source of income is match day. You'll be able to charge more for games, but I don't think the club will go down the route of upping prices significantly for regular fans, but for the commercial and hospitality sector, you'll be able to charge premium prices.
“If you've got Liverpool, Manchester United, City, Arsenal, Chelsea coming to town because people want to be able to entertain their guests and no disrespect, it's a lot easier to sell those tickets if it's clubs of that caliber compared to Swansea at home on a Tuesday night.”
Maguire talks about £20million equity conversion
Maguire also recently speculated that Louis-Dreyfus and 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 Kyril Louis-Dreyfus and Juan Sartori own, 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.
“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.”
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