Sunderland Embracing The New Premier League Financial Regulations

Michael Regan

Sunderland will be ready for the new financial regulations introduced by the Premier League and there are plenty of reasons to feel encouraged.

Premier League clubs last week voted in favour of new measures to curb excessive spending. Richard Scudamore, the League's boss, has promised to punish clubs recording losses in excess of £105m over the next three seasons as well as bringing in rules to ensure clubs bring their wage structure under control.

Ellis Short has been at the forefront of these proposals. The American not only supported the actions, they were actually his idea. With this in mind, it seems pertinent to ask what all of this might mean for the club that he owns.

In 2010/11 Sunderland's wage bill totalled a massive £61m against an income of £79m. That represents an unsustainable 77% of revenue spent on wages. The figures for 2011/12 should represent a decrease on that, given a number of cost cutting measures in the past season or two. The club has certainly been working towards a more effective financial model in that period and continues to do so. It's logical to assume that as the man behind the new rules, Short would have been planning for their implementation. In that respect, he has gone a long way to ensure the club starts off on a positive footing.

If player wages were to remain above the £54m mark, as they were two seasons ago, Sunderland would only be able to increase them by a further £4m in 2013. In context, that might equate to two new players' earnings. The likelihood is though, that if the wage bill isn't already below that figure then it will be after the next transfer window. The days of the bloated squads assembled by Roy Keane are well and truly over.

The new measures can be traced back to the end of the Irishman's tenure as manager. Since then, the squad size has been reduced massively. Steve Bruce began the process in earnest with mixed results. Two players who left during his tenure brought in significant revenue to the club as well reducing the wage bill, though they were made for different reasons. Darren Bent was sold so he could facilitate his own pursuit of money while Jordan Henderson simply commanded a fee that was too high to turn down. Henderson rather than Bent represents something the club would hope to repeat in the future. The Category One graded Academy will be expected to produce more talent to service the side on the pitch while also representing an excellent opportunity for the club to make money.

The squad has seen further changes since Bruce left and was trimmed again in January. Fringe players like Fraizer Campbell and David Meyler were moved on while it is almost a given that more will follow in the summer. Titus Bramble and Matt Kilgallon look likely to leave when their contracts run out. Bramble is generally popular amongst the Stadium of Light crowd, but for the money he earns, a better option could almost certainly be found for the first team. He is simply too expensive to be back up and too inconsistent to start regularly. Other players who could leave for fees include David Vaughan and Phil Bardsley. Scottish full back Bardsley reportedly earns in excess of £30k per week. Despite being a decent pro and a seemingly good dressing room character, he will probably be sold if a buyer can be found. Like Bramble, he'd make a decent squad player, but for those kind of wages a better option could almost certainly be found.

Terms like cost cutting and squad reduction often set alarm bells ringing. The actions being taken are far from a cause for concern in this instance though. In fact, the actions the club have taken and continue to take are positive. In terms of the players mentioned above, how many can honestly say they would really miss seeing any of them pull on a red and white shirt again? Compare those leaving with the players who have signed. Fletcher and Johnson arrived in the summer, while fees were spent on Graham and N'Diaye this winter. If the club was merely cost cutting, there is no way big money would have been spent on these players. Short has shown he is committed to the club and will not shy away from spending on fees and wages. If his manager wants a player, he can go out and get him.

Another point to consider is that the regulations surrounding wage expenditure only relate to revenue distributed centrally by the Premier League. This means that if Short and his staff can increase revenues elsewhere, then additional money can be spent on players and wages. This is an area where the club has been particularly active with prominent deals in Africa at the forefront of efforts to boost revenues around the globe.

With this in mind and a bumper new television deal about to enrich clubs yet further, it would be wonderful to think that Sunderland and indeed other Premier League clubs would look to cut ticket prices for supporters. The new regulations ensure all of the television money cannot make it's way into players' pockets and with Short in charge - a man who has always valued the Sunderland support and the importance of big crowds - perhaps it is not unrealistic to hope for a reduction in prices. Of course, the American is a businessman and won't want to lose money, but if he sees a full, atmospheric stadium as a way to enable success at the club, then more affordable tickets could be seen as a way to achieve that.

Undoubtedly there is an element of self-interest at the heart of these guidelines, both for the clubs and their owners. Short is no different. He will not want to see his money thrown away without some form of return but this is no bad thing. A self-sufficient Sunderland - or one on the way to that goal - is certainly better than one built in the mould of a club like QPR.

In fact, the timing of the new regulations is particularly apt, coming on the back of another spending spree by the West London club. QPR have inflated the market for wages by offering vast sums of money to players, spending beyond their means in the process. If this was allowed to continue, it would encourage other clubs to abandon sensible economic models in an attempt to compete. Then there is the question of how fair it is for a club who get modest crowds and revenue to benefit from a rich owner, while other clubs try to operate within their means. The need for regulation has been highlighted once again. This time, concerns have been addressed and if there is a criticism here, it's that the measures don't go far enough.

Sunderland supporters can take heart from the fact Ellis Short has been at forefront of these matters. His actions display commitment to the club and the direction he is taking it in is a positive one. These rules give us an opportunity to be more competitive financially and subsequently on the pitch. Ultimately, as fans, that's all we can ask for.

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