Sunderland chairman Stewart Donald defends FPP deal and responds to concerns over its structure
Documents lodged at Companies House today confirmed that the £10 million injection of funds from the American group is a repayable loan into Madrox, the holding company controlled by Donald, and is secured against its assets.
That includes the shareholding of Sunderland AFC, the Academy of Light and the Stadium of Light.
The documents raised fears amongst supporters, concerned about what would happen should Madrox default on the loan.
It remains unknown what the terms and timescale of the repayment are.
In a wide-ranging interview with BBC Newcastle, the Sunderland chairman said the deal was ‘responsible’.
“The investment that we’ve got, or loan if you want to call it that, is into Madrox, which owns Sunderland in it’s entirety,” Donald said.
“The money is secured against everything that Madrox owns.
“The only exposure in reality is for Juan, Charlie and I. If we don’t make good on the repayment, the guys who have lent the money have control of Madrox and we lose the money that we’ve invested.
“The only lose-lose is for Juan, Charlie and I.
“There was a lot of excitement around the four Americans becoming involved, and if we don’t do it right they get control of the football club, which from what I can gather a lot of people want anyway.
“The only people that lose if the debt is defaulted is the current owners, who lose everything.”
Asked whether he was concerned that this could happen, the Chairman insisted it would not.
The cash injected is expected to be used on rebuilding infrastructure at the club, stripped back in the early days of the current owners’ tenure.
This includes the Stadium of Light, as well as the club’s recruitment department and the academy.
Donald claimed that he and fellow director Juan Sartori could have done that themselves, but wanted to begin a partnership with a group he says are ‘globally reputable’ and can bring a benefit ‘to the whole region’.
“It won’t be defaulted,” Donald said.
“I could have asked Juan [Sartori] to put the same amount in, and he offered, but the idea was to get these guys involved for a whole host of reasons.
“Juan could put the money in tomorrow or I could, though Juan would find it easier than me.
“This is the biggest thing,” he added.
“You can criticise us for appointing the managers, changing the managers, the recruitment, or whatever you want on the football side.
“One thing that isn’t fair and isn’t right is that we’ve come here as chancers to cash in and take the money.
“We could quite easily have walked away in the summer with a £30 million profit, but we chose not to do that because of these people. The idea was to get quality investment, and we’ve had lots of interest and been quite a long way down the line with others, but we stopped those in the tracks for this investment.
“We’ve done that because of the people who are involved in investing with us. They are globally reputable, they’ve got wonderful connections….
“This group of people have looked at loads of football clubs, have said we can see what you’re doing here, and beyond them they have deep pockets that if we do it right and can demonstrate that to them, can spend money in the whole region.
“That is what it’s about.
“It’s not about cashing in. We could have cashed in and disappeared but we haven’t done that.
“Juan and I can quite comfortably cover all of that [debt repayable to FPP],” he added.
“We could have gone to loads of different places to raise money.
“We have gone to these guys because we believe that for the long term benefit of the football club, they are going to be really, really good, if we can show them we know what we’re doing.
“That’s the big thing isn’t it and if the jury is out [on us], then the jury is out.
“We have got to prove to everyone we can do it right and if we don’t, we are the only ones who lose.”
Donald admitted that the group had discussed a potential full takeover of Sunderland, but denied that the deal had fallen through because of disagreements over the price.
He said he ‘expected’ talks over a takeover could be resurrected in the future, saying that both parties saw it as a ‘10-20 year partnership’.
“I’d expect so [could discuss takeover in future],” he said.
“We agreed a price potentially on a takeover. That never altered.
“For the guys in America, it was never a control transaction, they never ever wanted to run the club.
“They wanted to leave it to others, they invest in people.
“They wanted to find a way to invest in Sunderland.
“They could have done it in a number of different ways and they chose this one.
“Why they did that is up to them, I’m sure if in due course they want to expand on that they will.”