Dear Roker Report,
There are a few of us who still share the concerns of Gerard Hiscock, and I am not sure the Editors’ reassurances are entirely valid. The issues of the price paid, charges remaining against the clubs assets, and significant liabilities not being picked up in the two weeks’ due diligence still remain opaque and potentially covered in PR spin by the club.
The editor’s reassurances emanate from the new owners passing the fit and proper test. As far as I can see the fit and proper test is just that, are the new owners fit and proper people to run a football club? I.e., have they had criminal convictions, bans from being directors, subject to insolvency proceedings in the past, or generally dodgy people? Of course the new owners aren't that; however, it does not certify that they have enough money to buy the club, and to fund it going forward as far as I can see.
Neither the Premier League nor the FA would want to get involved in certifying viability. If they were wrong think of the possible ramifications.
When asked about his wealth Donald did say that during the fit and proper test they had to convince the FA and EFL that they (whoever they are) had £50m for the next season. Being cynical I suspect the club had to prove that it had £50m for 2018/19 season and as it is due a £35m parachute, has sold 22,000 season tickets and has some £25m of players it can sell then its not difficult to see how this could be satisfied. I am struggling how it is a “fact” that Donald etc have enough money to buy the club and to fund it. I can’t see any first division owners passing that test and why should they? It must have been a reference to the club’s finances.
Seriously, if SD is worth more than £50m then why not just say that and the uncertainty would disappear, provided it is also confirmed that he is personally liable for the purchase price and not some off the shelf new company?
There is nothing on the Internet confirming SD’s wealth and whilst everyone is entitled to privacy, there’s not much point in the disclosure of the clubs finances if it is all underpinned by the above which isn’t confirmed.
Messrs Donald, Methven and our new manager have in many respects been a breath of fresh air; however, until the key questions are answered with evidence, I share Mr Hiscock’s concerns.
Let’s get this cleared up and concentrate on matters on the pitch.
Paul from Reading
Ed’s Note [JN]: Cheers for the email, I’ll take these one at a time.
The EFL fit and proper test does chiefly focus upon allegations towards and involvement of prospective owners in criminal affairs; hence why a few years ago, Massimo Cellino barely passed the test after numerous appeals.
However, since the whole Portsmouth scandal from 2010 onwards things have changed.
Successive Pompey owners Alexandre Gaydamak, Vladamir Antonov and Balram Chainrai did not have neither the nous nor - crucially - the financial backing to both halt the losses and fund the club’s immediate future. After six months, the club was only saved from liquidation after the Pompey Supporters’ Trust finally convinced administrator Trevor Birch to approve of their ownership bid. Current FA Chairman Greg Clarke was then the Chair of the Football League and oversaw the addition of financial investigations into the fit and proper test.
Donald, Methven and Sartori thus all passed in rather quick fashion. They can certainly spend money, but the plan will be to get out of League One at as minimal an expense as possible, while increasing the profit margin, cutting losses and aiming for self-sustainability. Methven excellently outlined this recently in an interview with FC Business magazine.
They look into both the club and individual’s finances - but the fit and proper test is solely a test against the individual cross-referenced with the finances of the club, in which they decide how to run the club. So he will be discussing their own finances, not the clubs.
Nothing online should confirm his personal wealth and capital because that is, you know, personal. The club is debt free, though. They have money to fund and aim towards self-sustainability. It must be remembered an owner pumping money into a club is unsustainable and will lead to breaking EFL and FFP regulations along with huge financial problems to follow. They have enough money, but won’t want to be constantly having to pump money in - instead, they will want to utilize their funds correctly.
Donald has also confirmed on the Roker Rapport Podcast and on Twitter that he does have enough cash to individually run the club - but why should he give exact figures? That would surely let clubs know how much he has, and that doesn't sit right with me.
Backup plans are in place, and Sartori himself is particularly well-off and well-connected. The club still have to honour legacy payments - which isn’t debt - and they are in debt to Short, not Sunderland.
The only worry is if the news oweners suddenly pull funding, or lose a vast sum of their personal fortune, which likely won’t happen and is a worry every club in world football has to consider.
Hope this helps!