Sunderland posted a pre-tax loss of £8.6million ($11.12m) in their annual accounts for the year ending July 31, 2024, a figure that would have almost doubled had the club not sold striker Ross Stewart to Southampton. It is the 18th consecutive year Sunderland have recorded a deficit, with pre-tax losses since 2006 now totalling £276.6m.
Stewart’s sale on transfer deadline day in summer 2023 banked
the Wearside club just under £7m once Stewart’s former side Ross County took
their 15 per cent of the profit on the deal. That reduced the club’s operating
loss of £16.9m, though they still lost just under £9m for the second year
running, reflecting the difficulty of achieving sustainability — an aim of
majority owner and chairman Kyril Louis-Dreyfus — in the EFL Championship.
The operating loss was 82 per cent higher than 2023, as
increased wages, transfer fee amortisation and non-staff expenses swamped the
club’s £2.7m revenue increase. Even so, Sunderland’s operating loss is the
10th-best result in the Championship based on most recent figures, with over
half of the league booking more than £20m in losses before player sales.
Despite the losses, the club’s annual accounts show that it
has no issues complying with the EFL’s profitability and sustainability rules
(PSR).
Sunderland’s combined pre-tax loss over the three-year cycle
was £24.7m. That was more than the lower loss limit of £15m, which applies to
Sunderland as they have received no ‘secure funding’ from their owners in
recent years. Pre-tax losses are not
equal to PSR losses though, which allow for several deductions. After those
deductions, most notably the high estimated cost of running a Category One
academy, The Athletic projects Sunderland had at least £20m in
PSR headroom last season.
Player trading
After years of poor transfer dealings, Sunderland’s focus
shifted to putting player trading at the centre of their business model
following Louis-Dreyfus’ arrival. The
2023-24 accounts are the first to show that strategy bearing fruit: the club
banked £8.9m from player sales, more than the last four seasons combined and
the highest single-year figure since their 2017-18 Championship relegation
season. 2024-25 will be higher again following the sale of Jack Clarke to
Ipswich Town last August.
Sunderland’s revenue in 2023-24 rose to £38.1m, a £2.7m
(eight per cent) annual uplift.
The disparity between relegated clubs and the rest of the
Championship, however, remains stark. Sunderland’s total revenue last season
was less than the £47.8m Leeds United, Leicester City and Southampton each
received via Premier League parachute payments, as well as the £39.1m
second-year payments Norwich City and Watford enjoyed. Of clubs without such payments, Sunderland’s
income was the second-highest in the division, only trailing Bristol City
(£42.4m).
Sunderland’s wage bill rose by £5.8m (22 per cent) in
2023-24, pitting them ninth in the Championship based on most recent figures.
Unclear from the accounts is where the costs of removing
both Tony Mowbray and Michael Beale from the dugout have been recorded. Their
departures may account for some of the wage bill increase.
The club’s wages-to-turnover figure jumped 10 per cent to
82.2 per cent, the ninth-best wages-to-turnover number in the second tier.
Eleven of 24 clubs spent more than 100 per cent of income on wages at last
check.
Sunderland received £1.8m in funding from their ownership in
2023-24, taking the total amount received from shareholders since
Louis-Dreyfus’ arrival to £19.8m.
The club’s wage bill has roughly doubled in two years of
Championship football, and precedent dictates that the cost of competing at the
top end of the second tier will only continue to increase. Of 106 Championship
clubs to submit accounts since the beginning of the 2019-20 season, just 15
posted a profit and three of those suffered relegation.
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