Sunderland AFC reports £23m loss – but could break even if club avoids relegation

Marcos Alonso'Sunderland AFC v Crystal Palace FC'Barclays Premier League'Stadium of Light
Marcos Alonso'Sunderland AFC v Crystal Palace FC'Barclays Premier League'Stadium of Light
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SUNDERLAND could be on course to break even this season if Gus Poyet can keep the Black Cats in the top flight.

But relegation could leave a £40million hole in the finances next year.

The club has released its financial report for the year ending July 31, 2013, which show an operating loss of £23.135million – down from £27,611million the previous year.

Turnover – the amount of money actually coming into the business – was down from £77.042million in 2012 to £72.026million.

Gate receipts, television income, merchandising and banqueting and catering were all down, but sponsorship and royalties were up by more than £1 million.

The report makes clear the vital need to ensure top flight survival and continued access to the Premier League’s TV deal.

Television and media income was worth almost £45 million last year – four times what the club earned from supporters passing through the turnstiles.

But the 2012-13 season was the last of the previous TV deal and this year’s payment is set to be at least £19 milion more, a figure which would go a long way to wiping out a £23million loss.

Relegation, however, could have serious consequences.

A TV parachute payment of just £26million for the first season in the Championship would leave the Black Cats facing a £40million reduction in funding for the 2014-15 season.

The report makes it clear a lengthy spell outside the top flight is the board’s main worry.

“The directors consider the major risk of the business to 
be a significant period of absence from the Premier League,” it 

“Ongoing investment in the playing squad aims to reduce this risk.”

The club has made progress in cutting the wage bill, with staffing costs down from almost £64million to just under £57million, though the report period does not cover the costs of September’s sacking of Paolo Di Canio and his backroom staff.

SAFC owner Ellis Short has pledged to continue to underwrite the club’s £39million overdraft, says the report.

“The immediate parent undertaking, Sunderland Limited, and its ultimate controlling party Mr Ellis Short have indicated 
their willingness to continue to support the operations of the company for the foreseeable future.”