Sunderland Football Club saw its revenue almost halve when it was relegated from the Premier League but managed to narrow losses through player sales and huge cost cutting, new accounts reveal.
Accounts have been published for the year ending July 31, 2018 - essentially last season - which show that the team’s costly relegation to the Championship in 2018 saw the club’s turnover fall from £123.5m to £63.9m.
The club made an operating loss of £20.2m, but this was actually an improvement on the £39.3m loss recorded a season earlier. Profits from player sales and a big drop in operating expenses - from £150.7m to £82.2m - helped bring down the losses.
As with all football club accounts, the report captures a point in time that is almost a year out of date in terms of the club’s current position.
The accounts do not reveal the cost of Sunderland’s second successive relegation, which saw them drop from the Championship into the third tier of English football this time last year.
The accounts are also mostly a reflection of the club’s previous management regime, with former owner Ellis Short and then chief executive Martin Bain passing ownership to Stewart Donald and fellow director Charlie Methven a month before the end of the accounts period.
In a brief report attached to the accounts, chairman Stewart Donald says that “the directors consider the major risk of the business to be a continued absence from the Premier League. Ongoing restructuring of the playing squad aims to reduce this risk.”
The accounts cover a disastrous season for Sunderland on the pitch, with two managers being sacked during the season in Simon Grayson and Chris Coleman and the club being relegated to League One with two games to spare.
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The accounts reveal that income from television and other media remained Sunderland’s biggest source of income, despite falling from £95.6m in the club’s last season in the Premier League to £48.8m. Gate receipts, sponsorship and merchandising also fell.
The club managed to make a big cut to its wage bill, partly through clauses to reduce most players’ wages after relegation and also through cutting 47 members of backroom staff.
But the accounts show that just over £1m was paid to one of its previous directors - thought to be Mr Bain - in a redundancy payment.
At the end of the accounts period, Sunderland was still owed £16.2m in transfer fees but owed £15.1m in transfer fees and related costs.
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