Covid, sales & Alvarez: What we learned from Cats’ 2019/20 accounts

Sunderland have announced a loss of £2,622,000 for the 2019/20 season, figures significantly bolstered by the sale of academy products.

Theaccounts,runfromJuly 31, 2019 to August 1, 2020, and so do not take into account the period since Kyril Louis-Dreyfus assumed a majority shareholding in the club.

The club made an operating loss of £5,753,000 across the year, which was offset by a £3,382,000 profit on player trading. That profit does include the sale of George Honeyman (Hull City), but is predominantly made up of thesaleofacademytalents,Bali Mumba, Joe Hugill and Logan Pye. Sunderland's losses were also heavily impacted by the conclusion of the Ricky Alvarez saga. The accounts include an exceptional operating expense of £4,770,000, plus interest of £960,534. The club were ordered to pay that sum by the Court of Arbitration for Sport after Alvarez contested an award related to his loss of wages.

More broadly, the accounts showtheysignificantimpactof the club coming to the end of its parachute payments from the Premier League. Turnover fell dramatically from £58,693,000 to to £29,152,000. This was mostly accounted for in a fall in television and media revenue (in which parachute payments are included) from £39,948,000 to £17,195,000.

Other income also declined,inparttoduetotheCovid-19 pandemic. Gate receipts were down from £8,602,000 to£5,658,000.Conferenceand banqueting revenue fell from £4,136,000 to £2,138,000.

The club's wage bill continued to fall significantly as a result of the club's continued spell in League One.

At the end of the period in question the wage stood at £14,504,000 (across the whole club), down from £23,569,000 the previous year. The club's recruitment was significantly impacted by the introduction of a salary cap, which was subsequentlyoverturnedafteralegal challenge by the PFA.

Payment to Directors grew to £515,962,000 across the accountingperiod,duringwhich Jim Rodwell was appointed as

CEO and Tom Sloanes and David Jones were appointed as non-executive directors.

That sum also includes £131,900 paid for compensationoflossofoffice.BothCharlie Methven and Tony Davison resigned from their roles during the accounting period.

The club were also invoiced £119,241 by the club’s ‘ultimate controlling party’, which at that stage was Stewart Donald and Madrox.