Kieran Maguire explains Kyril Louis-Dreyfus' £8.2m decision in Sunderland's recent accounts

Football finance expert Kieran Maguire has delivered his verdict on Sunderland co-owner Kyril Louis-Dreyfus clearing the club’s overdraft via a ‘working capital facility’ with a third-party.

The Black Cats released their financial accounts covering the club's second season back in the Championship last week. Sunderland confirmed an operating loss of £8.1 million for the period in question, down slightly from a loss of £9million from their first campaign back at Championship level.

However, in a statement accompanying the results, the club also confirmed that it had cleared its overdraft facility due to an arrangement from “an entity associated with the Louis-Dreyfus family,” which promoted some worry from Sunderland fans after the interesting detail had been revealed to the public.

The statement appears to suggest that the club have taken on some external debt, however, no detail has yet been provided, and this might be of a concern moving forward as if Sunderland were to take on any more external debt that required servicing, there is a long-term danger that investment on the pitch could be squeezed.

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The statement said. "SAFC’s banking overdraft facility, which stood at £8.2 million on 31 July 2024, has subsequently been cleared by the club after securing a working capital facility from an entity associated with the Louis-Dreyfus family."

Speaking exclusively to the Sunderland Echo, football finance expert Kieran Maguire described the move as “slightly unusual” but also hinted that the move wasn’t necessarily anything to worry about and that the club’s finances were “solid” generally for a Championship club.

“The good news, I think, in respect of the overdraft being cleared is the chances are that Sunderland won't be paying any interest on it if it's from a friend of Louis Dreyfus's family,” Maguire told The Echo after the club’s accounts had been released.

“It does seem a slightly unusual strategy, how you'd normally expect owners to cover those losses, and that tends to be the case with what we see with a lot of clubs in the Championship. But Sunderland's finances do appear to be fairly solid, and it's always better to have friendly rather than third-party debt.”

When asked how healthy Sunderland’s finances look in comparison to their Championship rivals, Maguire added: “Whenever I look at losses for clubs in the Championship, I tend to focus on the figures before player sales. Sunderland did have a good year from player sales in 23-24 that helped.

“If you exclude those losses for £16.9 million, it still puts them in the bottom third of clubs in the Championship because it's a really rough, tough division to deal with. So many clubs are gambling on getting promoted and those gambles tend to be very expensive ones. But the average loss is based on my figures of £21 million.

“I think Sunderland have been managed pretty prudently overall, but even so, to be losing more than £300,000 a week before player sales is indicative of just how tough it is to compete in that division when so many clubs want to get to the promised land.”

What Sunderland have said about their financial performance

The notes accompanying the accounts, signed off by Kyril Louis-Dreyfus, read: “Sunderland’s business model continued to leverage robust ticket sales and sponsorships, supported by strong season ticket uptake, reflecting solid fan loyalty. With over 35,000 season ticket holders, Sunderland maintained the highest attendance rates in the Championship, 9th highest in English football, ensuring the club drive consistent matchday revenue.

“Despite rising operational costs, partly due to the cost of living and raw materials, the club was able to maintain a stable financial footing, supported by prudent expenditure and strategic investments focused on long-term returns. Looking ahead, Sunderland AFC’s strategic focus on sustainability, fan experience and community-centred growth places it on a solid financial trajectory for the upcoming financial years. With ambitions to return to the Premier League, the club is positioned to capitalise on its investments, expanding its supporter base and elevating Sunderland’s regional economic impact.

“The balanced approach to growth, sustainability and fan engagement underpins Sunderland AFC’s strategy for resilience and continued success, aligning the club’s financial health with its community-centred mission.”

Your next Sunderland read: The accounts can be read in full here.