Sunderland's financial results reveal true extent of Ellis Short's final act and challenges facing Stewart Donald & Co

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Sunderland's financial landscape changed in the blink of an eye when it was confirmed Ellis Short had sold the club debt-free to a consortium led by Stewart Donald.

Short's final act as owner will be wiping £125.7million of debt.

Ellis Short.

Ellis Short.

The staggering level of debt was, of course, racked up on his watch and the latest accounts show the extent of the financial mess the club managed to get itself in.

Martin Bain's £1.2million 2016-17 salary - making him the highest paid chief executive in the club's history - will not go down well with fans.

Again, there was an over reliance on Short to prop the club up plus worryingly £45 million was owed to other clubs for transfers at July 31, 2017, the £150,000-per-week interest charges and the vast weekly losses.

Perhaps more worrying, though, is that gate receipts for the final season in the Premier League were down by £1.5million, conference and banqueting (down £3million) took a big hit, while retail income was also down.

Stewart Donald.

Stewart Donald.

These figures will have been hit further in the Championship campaign, which ended in relegation to League One.

Short's move to wipe the debt has, however, helped transform the financial picture, provided the takeover passes the final hurdle of EFL approval.

The champagne is on ice until the sale is signed, sealed and delivered but fans just have to examine the club's 2016-17 financial results to see how important clearing that debt was.

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The figures cover the final year in the Premier League and the good news was there was a big drop in losses, slashed from £33million in 2015-16 to 'just' £9.9million.

The club would have broken even had it not been for the £9.7million they were forced to pay Inter Milan for a player they never owned - a certain Ricky Alvarez.

Losses have been curbed and the operating profit saw a healthy rise to £14.6million, up from £1.5million, a big factor was the £33,144,000 profit on the disposal of players’ contracts, including selling Jordan Pickford to Everton.

The overall picture was bleak with the level of debt rising to £125.7million, up from £110.4million, rising mainly due to a further cash injection from Short. That will soon be wiped.

Sunderland AFC's 2016-17 accounts reveal Martin Bain's £1.2million salary, staff cuts, debt levels and transfer fees owed
The finances show three key things, a) the financial mess that Sunderland had managed to get themselves into on Short's watch, b) how reliant the club was on the American and c) an idea of the level of funding the new owners need to commit on a monthly basis.

Sunderland's wage bill in 2015-16 was £84million, accounting for 77.6 per cent of the club's £108.1million turnover.

The latest accounts reveal the wage bill for the final season in the Premier League to be almost exactly the same at £84,435,200 but the wages to turnover ration dropped by 10 per cent - to 66.8 per cent - as a result of increased income from TV revenue.

The wage bill was slashed to around £35million this season and it will be cut further ahead of relegation to League One. It has to.

Wiping the debt lifts a massive weight, not least in the £8million plus annual interest payments.

It gives Donald & Co the chance to start afresh but they must get to grips with an annual wage bill way in excess of other League One clubs, plus the dramatic drop in income from TV etc will prove a major challenge for the new owners.

Relegation wipes around £5million off Sunderland’s income stream immediately with the cuts to basic award and solidarity payments.

Parachute payments of around £33million for 2018-19 and £15million the season after will help on that front.

The 2017-18 accounts will be released next year and will be particularly bruising given the mammoth drop in TV revenue in the Championship compared to the Premier League.

For now, though, with the debt wiped and new owners on the horizon, Sunderland fans can take comfort from the fact the financial picture is far brighter than it has been for several years.