FFP catches Sunderland Short
Posted by Ed Thompson on Sunday, April 15, 2012
FFP catches Sunderland Short 5 Oct 2011
It was interesting to see that Sunderland used 'Financial Fair Play requirements' as part of the justification for Niall Quinn's change of roles. In a move that signalled the increasing frustration of club owner Ellis Short, Quinn was this week replaced as club Chairman. In an unusual move, Ellis Short now becomes club Chairman. Quinn will now focus on "developing Sunderland's profile and business interest overseas". Clearly,
all is not well at Sunderland. Gates are 3,000 down on last season (comparing the same fixtures over the two seasons); they are hovering
above the drop-zone with only one win this campaign, and the club have lost £23.5m and £25.5m over the last two seasons. Ellis has sent Quinn to South Korea in an attempt to bring in some desperately needed commercial funding. Niall will have his work cut out - Sunderland are hardly a global brand and other, more successful, clubs with greater fan-appeal have been fishing in the same pond for several years.
When Quinn 'sold' the Sunderland vision to Short, it was very much portrayed as a 'Field of Dreams' - build it and people will come. Back in March 2010 Quinn said. "People say, ‘Why is he here?’ It's the potential which is why he’s putting all this money in; he wants the asset to grow and he feels in five to ten years that the asset will be worth far more than it would if he had just let it go. He feels it will be good value in time, especially with the way the world [television] rights are going.
After having pumped in £67.5m of his own money into the club over the last 18 months, the dream has turned into a bit of nightmare and success is
further away than ever . Short is seemingly not happy with Quinn's performance as Chairman and the Irishman faces a tough job to build the
brand in the Far East when the supporters in the North East are losing interest.
Ellis Short has dug-deep in his financial support for Sunderland - he put in £19m of equity (i.e. not loans) into the club earlier this year, in
addition to the £48.5m he stumped up the previous year. Short is a very wealthy individual and his personal wealth is usually given as $1.2b. However his background is in banking and investments (a sector that has seen 25% falls over the last quarter) so things may not be quite as rosy
for Ellis as they were this time last year.
Short is quite right to point out the FFP issue at Sunderland. However, the issue runs deeper than the obvious challenge of reducing the
club's losses to within the E45m maximum Break Even Deficit over the Monitoring Period that covers 2011/12 and 2012/13 seasons. Under FFP rules, a club is only able to lose more than E5m over the current two-year Monitoring Period if there is an injection of Equity to cover the loss. This
means that Short will have to put his hand in his pocket yet again and fork-out up-to E40m. This, of course, assumes that Sunderland will continue to apply for a UEFA licence on the off-chance that they will eventually secure for a the Europa Cup or Champions League place.
all is not well at Sunderland. Gates are 3,000 down on last season (comparing the same fixtures over the two seasons); they are hovering
above the drop-zone with only one win this campaign, and the club have lost £23.5m and £25.5m over the last two seasons. Ellis has sent Quinn to South Korea in an attempt to bring in some desperately needed commercial funding. Niall will have his work cut out - Sunderland are hardly a global brand and other, more successful, clubs with greater fan-appeal have been fishing in the same pond for several years.
When Quinn 'sold' the Sunderland vision to Short, it was very much portrayed as a 'Field of Dreams' - build it and people will come. Back in March 2010 Quinn said. "People say, ‘Why is he here?’ It's the potential which is why he’s putting all this money in; he wants the asset to grow and he feels in five to ten years that the asset will be worth far more than it would if he had just let it go. He feels it will be good value in time, especially with the way the world [television] rights are going.
After having pumped in £67.5m of his own money into the club over the last 18 months, the dream has turned into a bit of nightmare and success is
further away than ever . Short is seemingly not happy with Quinn's performance as Chairman and the Irishman faces a tough job to build the
brand in the Far East when the supporters in the North East are losing interest.
Ellis Short has dug-deep in his financial support for Sunderland - he put in £19m of equity (i.e. not loans) into the club earlier this year, in
addition to the £48.5m he stumped up the previous year. Short is a very wealthy individual and his personal wealth is usually given as $1.2b. However his background is in banking and investments (a sector that has seen 25% falls over the last quarter) so things may not be quite as rosy
for Ellis as they were this time last year.
Short is quite right to point out the FFP issue at Sunderland. However, the issue runs deeper than the obvious challenge of reducing the
club's losses to within the E45m maximum Break Even Deficit over the Monitoring Period that covers 2011/12 and 2012/13 seasons. Under FFP rules, a club is only able to lose more than E5m over the current two-year Monitoring Period if there is an injection of Equity to cover the loss. This
means that Short will have to put his hand in his pocket yet again and fork-out up-to E40m. This, of course, assumes that Sunderland will continue to apply for a UEFA licence on the off-chance that they will eventually secure for a the Europa Cup or Champions League place.
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