Statement on finances from Cats
OWNERS RESPOND TO REPORTS
SUNDERLAND’S owners are fighting a rearguard action to combat the information about the club’s structure and financial arrangements that emerged over the weekend.
There is no suggestion that owners have broken any rules in any of their dealings, but an already sceptical fanbase is growing increasingly alarmed at what they see as a lack of transparency surrounding the running of their club.
On Friday the Daily Mail and The Times’ reported that £20.5m, money paid to the club by way of a parachute payment and used by majority shareholder Stewart Donald to purchase the club through his company Madrox, will be written-off as an ‘exceptional operating expense’ when the 2018-19 accounts are published.
In effect, that frees Donald and his fellow Madrox directors Charlie Methven and Juan Sartori, from the legal obligation to repay the money, although Madrox have insisted that they intend to repay the money regardless.
Conscious of the rising tide of anger on Wearside, Madrox answered a series of written questions arising from the weekend reports, but those answers have only raised yet more questions. The move to write-off the £20.5m sum as an ‘exceptional operating expense’ was described as a condition of FPP’s investment in Madrox in October, when the American-owned company injected around £9m.
Why FPP asked for the money to be written off in this way is not clear, and the terms of the agreement with Madrox are described as ‘confidential’.
The statement provided in response to the Daily Mail and The Times stories said that Madrox had invested £25m in the club in total.
In the Q&A, Madrox said that figure included the £5m deposit paid upon completion [of the purchase of the club], a sum of £9,075,000 in 18/19, and £11,375,000 in 19/20.
But Madrox also said that the £11,375,000 it had invested in the club since the year end replaced a large portion of the parachute payments. So, given that the £5m figure was presumably paid to former owner Ellis Short in 2018, and the £11,375,000 was a repayment towards the parachute money used to buy the club, can those amounts really be described as investments in the club?
Madrox says just under £11.5m of the parachute money remains outstanding and says this will be replaced over time. Madrox also responded to questions concerning Sartori’s involvement at the club. In response to a direct question over whether Sartori had paid just £1 for his 20 per cent stake in the club, as was reported on Friday, there was no clear answer - just an assurance that Sartori has ‘invested millions of pounds’ into the club.