Sunderland's last external debts cleared as club moves into new financial era
Sunderland's debt to Security Benefit Corporation has been satisfied, Companies House have confirmed.
Ellis Short agreed to pay off the remainder of the loan when selling the club to Stewart Donald.
As Donald pays the £40 million fee he agreed with Short in installments, the former Sunderland owner has in turn been paying off the last of the club's external debts.
Those have now been satisfied, moving the club into a new financial era.
Donald will now continue to pay the fee agreed for the club to Short, who retains some securities in the meantime.
Donald and Charlie Methven agreed to stagger the payments with Short in order to be better equipped to deal with the significant financial hurdles to be cleared during the summer.
Since agreeing that deal, Ururguayan businessman Juan Sartori has bought a 20% stake in the club and joined the board of directors.
They will hope to resolve the futures of high earning duo Didier Ndong and Papy Djilobodji before the transfer window shuts this week to further stabilise the short and long-term financial picture at the club.
Though the new regime did consider taking out a short-term loan in the summer to help them deal with some unexpected charges, Donald has vowed to ensure that the club does not again go into dangerously high levels of debt.
Speaking to fanzine ALS in July, he said: "We have lots of financing options from commercial to personal but one thing is certain, any new debt to me, Juan or even a third party or commercial debt will be way below what it was. That is my challenge because whether it is me or anyone else, the club wants as small a debt as possible and that is the plan.”
Speaking earlier this month, Methven revealed that the club were expecting to cut the club's losses to around £5 million this year.
"Overall, we are currently projecting revenues of £18.5 million this year," he said.
"Next year, with a better ‘run-up’ at the new season we would want to see that rise to £20 million. Meanwhile, we are intent on reducing costs to circa £22 million or maybe £23 million. That would see the club lose £5 million this year and maybe £3 million next year.
"That is a manageable sum, and if the Category 1 Academy is functioning as it has done, and should continue to do, the funding gap will be met when the odd player gets sold, as Jordan Henderson and Pickford were in the past. If for whatever reason that doesn’t happen, it is a level of loss Stewart and Juan can afford to bear.
"For me, that is a sustainable achievable model which would still give SAFC easily the largest wage budget in League 1. If we were fortunate enough to get promoted then revenues in the Championship would increase by circa £10 million - £5 million extra TV revenue, £2 million extra ticketing and corporate hospitality and £3 million extra in uplifts that have been built into our commercial deals.
"That would make SAFC’s wage budget in the Championship firmly in the top 10, which is as it should be. But if we stayed in League 1, the club would still be stable and sustainable.
"We aren’t just ‘owners’ – we are custodians of an institution. Risking the future of that institution on some insane gamble on short-term success is irresponsible, and Stewart, Juan and I aren’t going to do it."