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Takeover talk is so last week: Reports claim Ellis Short now seeking new investment in Sunderland

Reports in the national press over the weekend suggested Sunderland owner Ellis Short has abandoned plans to sell the club and is instead seeking fresh investment.

Stadium of Light

Further intrigue in the future makeup of Sunderland AFC emerged over the weekend with a report in The Sun claiming owner Ellis Short is close to agreeing a deal with American investors to put fresh funds into the club.

The story appeared in the print edition of the national newspaper and was penned by speculator Alan Nixon, the man who broke the original news that a German-led consortium were in discussions with Short to buy the club he took control of in 2009.

With those talks having seemingly broken down irretrievably late last week, the prospect of fresh investment is both timely and intriguing. And it may even explain why the buy-out bid from that mysterious German group was rejected.

North east reporter Nixon had suggested during the course of the talks that funding was a sticking point between Short and the party discussing a takeover. Ultimately the American financier issued a statement saying the bid was not in the 'best interests' of Sunderland AFC and it has been suggested he was unconvinced by the German consortium's plans for the club.

Sunderland v Burnley - Premier League
Ellis Short
Photo by Nigel Roddis/Getty Images

The article in The Sun asserts that Short has begun negotiating a package of investment which could bring an injection of £100m from fellow American financiers into his debt-laden football business.

Claims that US-based investors with the involvement of former Arsenal and England defender Tony Adams, ex-Chelsea director Paul Smith and - at one point - a Sunderland-supporting trio from Fulwell73 continued through last week even after the TV executives pulled out.

Whatever the true tale behind the takeover talk it was brought to a dead halt on Thursday afternoon with the appointment of Simon Grayson who had long been assumed to be the club's fallback option should a buy-out deal fail to be completed.

The speculation was then put to bed indefinitely at Friday's press conference to unveil the new boss with chief executive Martin Bain saying Sunderland are no longer for sale. For how long remains unclear, and that statement was likely uttered to refocus minds on the summer rebuild needed for the Championship season which begins four weeks on Friday.

Bain and Grayson at last week's press conference

But the prospect of fresh investment in their debt-ridden team will have the ears of Sunderland supporters pricked up right now. This remains a club ripe for some fresh impetus and rejigging, not to mention debt-restructuring and cash to spend.

A significant portion of Sunderland's debt is owed in the form of a loan and credit facility to Security Benefit Corporation - some £85m. There are other portions of debt too, owed to different bodies in a complex myriad of financing and corporate make-up - much of that structure dates back to previous regimes and organisation from when the club was a PLC.

Sunderland v Fulham - FA Cup Fourth Round
The Stadium of Light
Photo by Mark Runnacles/Getty Images

New investment and what it would mean for the club depends entirely on the form of that finance and what the investor is offered by way of compensation. It may be interest payments, share capital, a seat on the board or any other combination of return or stake in the club.

What is true though is that Ellis Short has proven himself to be incapable of running a football club in a coherent fashion. The American financier may well have learnt some harsh lessons in his years in charge but the impact of his poor decision-making and appointments to executive positions continue to bite back at Sunderland AFC.

Selling part of the club and ushering in fresh money, board room functionality and a renewed strategic financial direction may well be just what Sunderland need as they attempt to move forward following the pain of last season's relegation.

That said, the 'investment' is maybe more likely a means by which to restructure Sunderland's colossal debt and what it means in reality may yet have little impact on Simon Grayson's transfer budget in the coming weeks.

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