Financial Stability: Last Year’s Foundations
Last year, with the filing of the FY24 accounts, it felt like Sunderland had reached a crossroads. It wasn’t exciting, but all things pointed to a very well-run football club from a business perspective.
It had established itself on a very stable financial footing (which I don’t wish to understate the importance of), pragmatic in squeezing out every last drop of revenue possible whilst controlling costs effectively, and a far cry from the dark days in its all-too-recent
past.
Put simply, the business was strong – but football emotions don’t work that way. It carries far too many emotive ties to its passionate fanbase for relative business success off the field with financial sustainability to be sufficient for the City of Sunderland’s die-hard support. The fans need the on-field product to be in sync with the positive operations behind the scenes. And it is for that reason this year’s financial statements for FY25 hit very differently. Financial strength and football success have finally met in the middle.
The Cost of Promotion
While there was once again no profit at the 19th year of asking, a loss before tax of just £4m in the Championship is no mean feat. There is good reason for this though, as promotion comes at a cost in the form of bonus payments, yet we won’t reap the financial rewards of going up until next year. Operating expenses (£75.3m) shot up a staggering 57.2%, which can be largely attributed to the 76% rise in staff costs from £30.6m to £53.8m. Promotion bonuses will be a large driver in this £23m increase, but just how much exactly isn’t clear. What is certain is that promotion comes at an initial cost – for every £100 of revenue generated, Sunderland spent £133 on staff costs (up from £82 last year). But the fact this is likely to be, for the most part, attributed to the incentives paid out for achieving promotion means it is completely warranted.
Along with how much in the way of transfer fees are received up front, this serves as an indication as to why football clubs take out loans. We have been promoted and had to pay out big bonuses with Championship revenues and no Premier League income in the bank yet. Premier League television money is not all received up front either. These loans can plug the timing gaps, and this is normal football financing not a red flag. We are good for the money, and fans shouldn’t always be alarmed by debt.
That has come in the form of a loan facility opened up to the sum of £25m with related party, Akira BV, part of the Louis-Dreyfus group, and will be the driving factor behind the large jump up in interest payable from £626k to £2.96m. The £8.2m bank overdraft facility from FY24 has now been closed off though.
Turnover of £40.3m (up from £38.2m in FY24) is about as strong a revenue performance as you can get in the Championship without the assistance of parachute payments from the Premier League, with this amount alone being about equal to a second-year payment for dropping down a division. This serves as proof that we have a great base for this level, but it is far from an even playing field in comparison to those teams coming down.
Season ticket support was strong, with gate receipts up 14.3% to £13.3m, and matchday attendance remained the 9th highest in English football and the highest in the Championship again. Per Chief Finance Officer, Mike Papadimitriou, the club continues to build on relationships with its “engaged and passionate supporter base, and a strong connection with the city.” It is still giving fans open channels of communication and listening to them, implementing change where they see fit. This includes the ticketing system, which was overhauled from the atrociously substandard Ticketmaster, who dished out Wembley tickets to ineligible supporters (and rightly cancelled them), causing an administrative farce.
Revenue from television and media (£12m), and conferences, banqueting and catering (£7.6m) grew steadily (15% and 12.6% respectively) following small growth in the previous year. A new EFL television deal and our deep run in the play-offs will have boosted the former. Sponsorship (£4m) continues to be an area of focus and rocketed again, up 65.3% following a 48% rise in FY24. There will be much more to come in this area in future, you would expect.
The retail business was down overall 60.6% from the previous year. The nuance within this though is the partnership with Hummel has been a roaring success with the fanbase, driving robust merchandise sales. Shirt sales still position the club among the leading performers within English football. The quality of the product continues to be excellent and connects with the city through its sharp attention to detail and nostalgia. The concerts business was down and will have impacted things, but that paved the way for refurbishment and renovation works to be completed on the stadium with the lack of utilisation outside the season.
Record Transfer Profits
This year we saw ‘the model’ take a significant leap in delivering at a new level, with substantial profits made on player sales to the tune of a whopping £45.8m. This demonstrated that profitability at Championship level is largely dependent on player trading. And that is something that the club has targeted at the heart of its business objectives from the outset. Much easier said than done, the recruitment team have performed remarkably to date, demonstrating somewhat of a Midas touch when it comes to scouting lower-profile players or those out of favour. Youth and development are at its core, and mass growth in individual players’ transfer values across the squad cannot be disputed.
We had a taster last season with the sale of Ross Stewart for large financial gain, and we knew proceeds from the Jack Clarke sale would be coming in these accounts. Sunderland subsequently cashed in on Tommy Watson, who agreed a deal with Brighton in April 2025, and Jobe Bellingham for a club-record sale straight after the dramatic Playoff Final victory.
You have to take your hat off to those responsible, as these are outstanding returns, even more so outside of England’s top tier, for two players who were with us for just two seasons, and an academy player. A point to note on cashflow is the money owed to us for transfer fees (included in trade debtors) stood at £26.7m, which indicates that a chunk of the fees from the Bellingham, Watson and Clarke deals were not received up front.
The real story around this set of accounts isn’t solely about the numbers though, but what was achieved on the pitch alongside these positive financial results. The numbers are good – revenues have nudged up and costs have largely been controlled, but to hit the main objective of promotion whilst balancing the books in this manner is quite exceptional. Quite simply, shrewd investment was made and cultivated, growth was obtained in many places, most notably in signing players for low costs, developing them and selling certain ones on for big profits, striking a perfect balance to minimise financial losses, all without derailing the club’s ambition to play in the Premier League. And that’s an imperative root of our success. Undoubtedly, this will continue to a degree in the next chapter where player resale value will always be high on the priorities.
If there was a blueprint for how to optimise performance and achievement on both fronts – from a business and on-the-field perspective – this is about as perfectly aligned as you can get in the second tier of English football. And that includes some of the undeniable luck that went with it.
Premier League football is a complete game-changer. Next season’s accounts will be eagerly awaited – it will be revealed in black and white just how much promotion was worth to us in terms of revenue streams. And all the numbers will be significantly increased beyond levels we’ve ever seen.
Premier League Spending Arrives
We’re already treated in this year’s accounts with an insight into Premier League player spending. A cool £148.3m in additions is revealed in the balance sheet for transfer fees paid for players’ contracts under intangible assets. That likely includes the conversion of Enzo Le Fée’s loan into a permanent transfer, as well as the signings of Habib Diarra, Noah Sadiki, Chemsdine Talbi, Reinildo, Simon Adingra, and Granit Xhaka. To appreciate how dramatic this is, compare this with last season’s additions of just £6.9m, which included Rusyn, Mundle, Hjelde, and Pembele. What a difference a year makes.
The Academy Conundrum
The Group Strategic report confirms that the academy continues to progress and that academy players accounted for 26% of playing minutes with an average of 5.04 players per match day squad, with special mentions to Chris Rigg and Tommy Watson. I suspect whilst we are in the Premier League we will not hit these marks again. Put simply, the bar for Premier League game time is much higher. To do so, the academy will have to keep up with the club’s trajectory, unearthing untapped talent from further afield and developing them to elite levels.
Early indications suggest we may see less of these players making a breakthrough here, certainly at young ages, and they may have to continue their development on loan, with opportunities limited due to incoming personnel for much higher transfer fees than we’ve been used to.
Dan Neil was last season’s captain, managing to accumulate a paltry 13 minutes of Premier League football, and has since departed, while Anthony Patterson finds himself out on loan. Rigg made over 40 appearances in 2024/25 and has also struggled for game time at the next level. Ruthless indeed, but the club are not allowing sentiment to interfere with how it sees best to continue the momentum and its ascent.
The Bigger Picture
The bottom line is these are the financial results of a brilliantly executed plan to get the club into England’s top tier without gambling away its future and existence. Furthermore, as the accounts put it, “The return to the Premier League means the club is very well-positioned to capitalise on its strong underlying fundamentals and ongoing strategic investment programme.” In short, Sunderland are in a great place right now – solid business foundations have been laid since Kyril Louis-Dreyfus took over, investment continues to be made, and together this can launch us to new heights amongst the wealthiest clubs in the world.
This serves as a staunch reminder that whilst we enjoy good times, we should also keep erratic emotions in check in temporary spells of poor form. There is a much wider plan in play and a bigger picture to zoom out on – one that is far greater than 5 losses in 6 league games and an embarrassing FA Cup exit. Equally, we will lose some fan favourites to other teams along the way. It’s all part of a longer-term strategy – frustrating in the short term, but necessary to keep the club pushing on. We are not in this position by chance. As much as football can never be a complete science, this is all very calculated.
KLD bought a controlling stake in February 2021 and later talked up a 5-year plan with Kristjaan Speakman. At various points during his ownership, the club has had setbacks and some supporters at times have questioned (and even lost faith) in the plan, where reference to ‘the model’ could spark instant rage and infighting. And now here we are – mixing it up in mid-table of England’s elite, all but securing Premier League safety in March.
The ownership won’t settle for Premier League survival as the peak, and I believe great times are ahead for us – they’ve given us no reason to doubt them, and they make swift decisions with the utmost conviction. Do we dare to dream about the next 5-year plan? Trust the process and get behind it.
