Sunderland have managed to slash their wage bill by £7m, the latest round of financial results have revealed.
'Losses' are at £23m, though that figure can be misleading as they don't include profits made on player sales, something which would reduce it drastically. Turnover is down slightly to £72m, a drop that is largely down to lower gate-receipts and conference and banqueting income. The losses seem to have been covered by a large increase in the club's back debt, which now stands at £39m.
On first glance the figures are worrying, but there are things which must be taken into account. Firstly, I don't think the figures were unexpected for this period (the year before July 31st 2013). The club have been open and clear about the fact they are working towards a break-even model by the end of the current TV contract.
Furthermore, that contract is set to provide its first bonanza this summer, when the club will receive an increase of at least £19m from last year's figure which will obviously take care of the bulk of the current losses and, in subsequent years, the overdraft (if we stay up).
We will likely have a more detailed analysis if the figures later on in the week, but for now the only question that needs to be addressed is: what would these figures mean if the club is relegated? Let's face it, we are all worrying about that at the moment!
We are already seeing headlines predicting "financial meltdown" should relegation happen due to the lost income, but I don't see that based on these figures.
TV income would obviously take a massive cut - the parachute payment is around £23m - but so would the wage-bill, which is by far and away the club's biggest expense. Based on these numbers, which must be stressed relate to last season rather than this, Sunderland's wage bill would fall to around £33.5m, a much more manageable figure, due to all player contracts being contractually obliged to take a 40% drop in wages should the club fall into the Championship.
That number would almost certainly be less than that too given the number of players set to leave the club this summer, either at the end of their contracts or to return to their parent clubs, is in double figures.
So scary numbers upon first glance, but the reduction of the wage bill is a big positive and provides solid evidence of the club getting its house in order and successfully working towards their stated plans.
The worst-case scenario - relegation - seems to be absorbable whilst the best-case - survival - appears to be genuinely progressive from these numbers. Let's see what the rest of the season brings.