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'What Is In It For Ellis?' - Has The Question Finally Been Answered?

For a while there's been an undercurrent wondering why Ellis Short has invested so much of his personal fortune. Could the new TV deal have been a significant contributor?
For a while there's been an undercurrent wondering why Ellis Short has invested so much of his personal fortune. Could the new TV deal have been a significant contributor?

Ever since Ellis Short started ploughing money into Sunderland AFC, the fans, whilst grateful, have always struggled to answer one nagging question - what is in it for him? Yesterday, that question was answered, at least in part, with the announcement of a bumper new domestic TV rights package worth £3bn, a staggering 70% increase on the previous figure.

The assumption has always been that, at the time that Short became involved in the club, the football bubble was already at bursting point, but it is now clear that we were all wrong, and the increases in revenue are already starting to make the Missouri native's investment look a good one.

So what does this new TV deal mean in real terms for Sunderland AFC? That is very difficult to put a figure on at this point in time. For starters, it will be strongly influenced by performance and Martin O'Neill's ability to make the team appealing to the TV companies. We also know far better than to count our chickens at this club so who knows if we'll even be in the division when this deal kicks off. But lets assume we are. Lets also assume that the Premier League make no changes to the system by which it distributes the money to clubs.

A very simple way to get some kind of rough idea would be to take last season's total domestic TV income, around £19.5m, and apply the 70% increase directly to that figure for a total extra income for the club of around £13.6m per season for the duration of the new TV deal. Obviously it is a very crude calculation and based on one or two assumptions, although Premier League chief Richard Scudamore has stated each club can expect an increase of at least £14m per season, so even our estimates appear conservative. What is does do, though, is serve to highlight how the Sunderland AFC that Ellis Short invested in was one which was barely scratching the surface of its potential from a business point of view.

The £64.6m turnover that the club achieved for the first year of Short's ownership at the time looked quite reasonable. Certainly relatively competitive compared to Premier League rivals. Since then, the club has been able to generate an increase in turnover of around 23% which saw the figure for the last published financial results sitting quite pretty at just under £80m. This new TV deal would seem almost certain to push the increase in the club's turnover since Short acquired the club through the 40% barrier.

What is more is that despite this development on the business side of the club, even further untapped revenue streams still remain open. In terms of sponsorship alone there is huge room for improvement. Sunderland's outgoing deal with Tombola was one of the lowest in the whole of the Premier League. According to The Independent, it was on a par with Wigan's shirt sponsorship deal and was actually eclipsed by Wolves, Swansea, QPR, and West Bromwich Albion. In fact, Sunderland's £1m per year deal was only able to better the shirt sponsorship income of three clubs in the whole division. Meanwhile, the clubs that Sunderland would probably describe as their peers in terms of aspirations and fan base - clubs such as Everton, Aston Villa, and perhaps even Fulham - were able to bring in 4-8 times the level of sponsorship income as the Black Cats.

This summer sees a new sponsorship deal for the club, however, and the club have already announced a new kit deal with Adidas which has been hailed in the local press as being 'the most lucrative in the club's history'. Additionally, with the overseas Premier League TV rights deal up for renewal at the end of the year (the current deal is worth around £18m in income to each club every year), and with the possibility of selling the stadium naming rights still a very real one, all the indications are that there remains plenty of room for further growth at Sunderland.

From a footballing point of view, it is unlikely to have any kind of immediate impact. The TV deal will, of course, benefit every club in the division, not just Sunderland. It would also be great to think that the benefit will be passed down to the fans by way of cheaper tickets and more accessible football, but I don't think anyone is naive enough to believe that. TV deals have been steadily rising ever since the inception of the Premier League and the only people who have ever really benefited are the players and their agents. There is little reason to suggest this latest increase will be any different.

That said, the hope at the club will be that the extra income can - at the very least - end any niggling fears about the club's ability to comply with the new financial fair play regulations. Despite there being some skepticism in some quarters about how seriously the new rules will be applied, the Sunderland board have been committed to making the club a self-sustaining entity for some time. A strong Sunderland off the field can only help matters on it, after all, which is great for us all.

So what is in it for Ellis Short? Well, without suggesting he is in it purely for the money alone, right now his investment is looking like a very safe one. With the world's appitite for Premier League football showing no signs of satiating, it is well on the way to looking like a very shrewd one, too.

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