COVID-19 impact, academy sales & Ricky Alvarez: What we learned from Sunderland's 2019/20 accounts

The accounts, run from July 31st 2019 to August 1st 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 to Hull City, but is predominantly made up of the sale of academy talents such as 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 initial award related to his loss of wages.

Alvarez was without a club for almost half a year before signing for Sampdoria in the aftermath of his hugely contentious departure from Sunderland in the summer of 2015/

More broadly, the accounts show they significant impact of 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, in part to due to the COVID-19 pandemic. Sunderland lost three home games across the period in question, with refunds issued.

Gate receipts were down from £8,602,000 to £5,658,000. Conference and 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 will stood at £14,504,000 (across the whole club), down from £23,569,000 in the previous year. The club's summer recruitment was significantly impacted by the introduction of a salary cap, which was subsequently overturned after a legal challenge by the PFA.

Payment to Directors grew to £515,962,000 across the accounting period, during which 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 compensation of loss of office. Both Charlie 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.

Chief Operating Officer Steve Davison, whose appointment came after the period in question, said: "Although Sunderland AFC was under a previous ownership group during the financial timeline detailed, the report begins to demonstrate the financial implications of the pandemic and its significant impact to all key revenue streams.

"Throughout the 2019-20 financial year we faced a period of rapidly-changing circumstances, but managed our costs effectively in order to navigate our way through this unprecedented time.

"Looking forward to next season, irrespective of our league status, our executive team has implemented strong foundations to achieve long-term and sustainable success.”

A message from the Football Clubs Editor

Our aim is to provide you with the best, most up-to-date and most informative Sunderland AFC coverage 365 days a year.

This depth of coverage costs, so to help us maintain the high-quality reporting that you are used to, please consider taking out a subscription to our new sports-only package here.

Your support is much appreciated. Richard Mennear, Football Clubs Editor