Slight panic spread across social media this morning when an article published by The Times alleged that the new Sunderland owner was already looking to find extra help financially in order to fund things such as legacy payments left behind by the old regime.
In the piece (written by Matt Hughes, which you can read here), it is alleged that Stewart Donald is in conversation with seven different financiers in order to ‘kick start’ his reign as Sunderland owner.
It also states:
The Times understands that Donald has been offered loans of £8 million to provide a capital injection into a business that recorded a loss of £10 million in its most recently published accounts to June 2017, but has yet to reach an agreement with any would-be lenders.
The piece claims that the club still owes a fair bit of money out in outstanding player fees and transfer add ons plus other various bills. On top of that, they’ll be looking to pay off the likes of Jack Rodwell - and that won’t come cheap.
As such, Hughes claims that Donald is seeking extra financial help in order to ease the cash-flow issues - a short-term problem that, as the writer explains, isn’t expected to be there in the long term.
Stewart Donald spoke yesterday on our Podcast at length about the mess he inherited, and admitted he’s expecting to write a cheque for £20m on August 31st in order to cover some of these costs.
On top of that, he noted that the club lost yet another lawsuit this week relating to the Ricky Alvarez case, and we’ll have to pay £5m towards the outcome of that.
We reached out to the owner for comment this morning.
Speaking to Roker Report, Donald said:
As is common knowledge, the club has a huge cash flow requirement in the next couple of months - but in addition to this there is around £10 million in potential liabilities that have emerged, mainly around legal disputes that were not expected. But, some of these hopefully may materialise.
We are discussing these currently and hope to get them resolved without the need for external finance. Subject to sensible dialogue with the relevant people, we are very hopeful any loan arrangement is a precautionary back up position, and indeed will not be required.
The actually likely outcome is that the current and previous owners will settle these liabilities between them, resulting in no external finance being taken.
We will of course keep the fans updated, and in the next few weeks we will be able to confirm either way the outcome of these conversations and their financial implications.
So, the crux of it is that the old owner may be expected to take a share - or all - of the responsibility here, and that its nothing to worry about.
The claims made by the Times aren’t too far from the truth, but as Donald alleges in his statement to Roker Report this is merely a contingency in case an agreement with the previous owners cannot be reached regarding these unexpected debts that weren’t there when Donald took ownership of the club.
Stay tuned here on RokerReport.com for all the latest over the coming weeks, including on transfers in and out of the club, logistical news, ticketing and more.