The minutes of the last meeting of the Supporters Collective and the club, published by Red & White Army last week, have made for interesting reading and have sparked much debate. The words contained within leave many important questions unanswered - some to be answered in full, and some unasked entirely.
The key question from the fan groups regarding the breakdown of the shareholding was rightly at the top of the agenda, and the answer provided was less than we had collectively hoped for.
We share the frustration expressed by Dave Rose about the paucity of the response.
The reason why KLD is unable to reveal the precise shareholdings of the different individuals within the ownership group is, he claimed in the statement attached to the end of the minutes, due to a legally binding agreement with the other shareholders not to do so.
The minutes from this weeks Supporter Collective meeting with SAFC can be found here - https://t.co/L0X4b9k3h1— Red & White Army (@RedAndWhite2017) December 3, 2021
Why the other shareholders insisted on this agreement is not made clear. It may be ‘commercial confidentiality’ relating to the deal that has seen Louis-Dreyfus being able to take executive control of the day-to-day operation and long-term strategy, but although this is a Private Limited Company, it is pretty much par for the course for English clubs to be transparent regarding the proportionate ownership of shares.
As we have noted on a number of occasions, while the retention of shares by Donald and Methven, in particular, is far from the ideal situation given the low esteem in which they are held by the vast majority of Sunderland fans - it’s not something that we can either control or that we should be surprised by.
Their shares are quite simply worth a lot more with KLD on board than they were before, because the potential of the club is bigger than it was when it was Donald in control. That is simply a fact of business life.
The £20m loan from the club to Madrox, also addressed in the minutes and widely understood to represent the final instalment of Premier League parachute payments, remains outstanding. The minutes suggest that part of it was transferred back into the club during the Covid-19 restrictions in order to keep the club afloat.
This transfer of funds wasn’t an act of benevolence, however, as many supporters rightly argue this was the club’s money in the first place - and the continued existence of the club was in Madrox’s interest as they were looking to sell the majority of this asset onto a third party.
Parachute payments may, hopefully, be coming to an end as a concept for the good of the game overall, and this may mean we stand a fighting chance when we do eventually get back into the Championship - but the way in which they were utilised under Madrox’s tenure will continue to be an open wound until they are repaid into the club coffers in full.
We will await the publication of the club’s accounts for a full update on progress towards what we all want to see - the resolution of this matter that has dogged the club for nigh-on two years, but the full implementation of the proposals of the Fan Led Review of Football would make answering these questions a lot more straightforward:
Financial transparency: for transparency for all fans and stakeholders, all clubs should be expected to publish high quality easy to understand financial information. In this, it is recommended that the excellent approach adopted by Plymouth Argyle that present the club’s financial information in freely available and easily understood terms should form the basis of the regulatory requirements.
The structured dialogue meetings are how we as fans should practically engage in direct conversation with the club - through our democratic and representative structures - but they are not in themselves a guarantee of the future.
For that, we need the proposals drawn up by Tracey Crouch to be made real.
At the Supporters Collective meeting, Steve Davison commented that he was “concerned about the practicalities of some measures, such as the redistribution of wealth and effective financial regulation” outlined in the report, and that Kristjaan Speakman “thinks the EFL are looking to bridge the financial gap with the Premier League and are looking to develop their own internal regulation process.”
This is the kind of industry response that appears, on my reading of these agreed notes, to suggest the club is essentially happy for the clubs and leagues to continue to regulate themselves, that they can get their own house in order without the need for pesky things like real-time financial monitoring or the end of the distortion of the Premier League parachute payments.
This line of argument - that the “practicalities” are a concern - also seeks to create the impression that there were gaps in the Fan Led Review’s gathering of evidence from experts who really do understand the financial side of the game, they didn’t research what exists elsewhere and seek to learn from those examples, and that they didn’t properly consider the implications of their proposals.
None of this could be further from the truth; this is the most comprehensive and progressive review of the English game in a generation, and must be given the Parliamentary time to be realised in its entirety.
As George Elek said to me on last week’s Roker Rapport Podcast, clubs cannot be allowed to lobby away the hard financial implications of the creation of a powerful Independent Regulator for English Football (I-REF) by fobbing us off with the partial or indeed voluntary implementation of the important but ultimately less consequential elements, such as Golden Shares and Shadow Boards.
And just to be clear, I think these two ideas are fantastic, and will protect our game while embedding fan engagement in the heart of the everyday running of clubs such as Sunderland.
What wasn’t made clear in the structured dialogue notes, however, and something I had asked to be raised in the meeting but is not mentioned, is the fact that the person understood to be the second-largest shareholder in Sunderland AFC and a member of the board, Juan Sartori, has recently been appointed to the board of his wife’s family business - AS Monaco of Ligue 1.
In any ordinary club, this would be the focus of intrigue and questions regarding the links between one of the most famous names in European football, its Russian oligarch backer, and our English League One club.
When Sartori first came on board - gaining 20% of the club for a mere £1m investment, Donald told us on the record that this was vitally important for attracting the serious big-money investors in the club who would be able to take the club forward beyond what his relatively modest bank balance could accommodate.
The Louis-Dreyfus family are those big-money investors, with a serious track record in European football. That promise, amongst all the broken ones, was kept by the previous Chairman.
But, I am nervous about the multi-club, multi-national group ownership model that has been whispered about but never outlined in any detail by the ownership group.
Clubs, big and small, in England, in Uruguay, in France, are unique and precious institutions that deserve to be run entirely in the interests of their fans, their local communities and their national games.
It is a route that we should be very cautious of going down, and when one of our directors is now intimately involved in a club that we could realistically face in competition within the next decade, we need to be asking the questions now before deals to link with clubs elsewhere around the world are signed and presented to fans as a fait accompli.
Yet, Roker Report still supports the vision and long-term plans as set out by the Chairman, CEO and Sporting Director of Sunderland AFC - not uncritically, or without the healthy scepticism that a fan outlet should have about the way rich and powerful international businessmen conduct their affairs.
We’re not here to make the club’s life easier or be its mouthpiece. We do want to push the club to be as good as it can be and will always highlight things that we feel should be done better. And we also see that when matters are raised, the club does generally take action - whether on digital inclusion, anti-racism, or women’s football.
We are fiercely independent, and are podcasters and writers who want the best for our game, club, our city, and the people in the Sunderland football community. We think that having an informed and closely engaged fanbase, despite the wrangling on social media, means that Sunderland AFC is a better club and a more cohesive community.
That’s why the editorial team at the time chose to accept the invitations to interview Stewart Donald and Charlie Methven back in 2018-2019. But the series of podcasts that you will see featured on Sunderland ‘Til I Die stopped when Donald started playing silly-beggars with us and Wise Men Say, just as the wheels started to fall off the bus as it became clear that FPP wasn’t taking over late in 2019.
We felt it important that you all knew what has gone on. You can make your own minds up as to why this approach has been taken. Keep the faith #SAFC— Wise Men Say Podcast (@WiseMenSayPod) December 21, 2019
Shortly after, we joined the Red & White Army, A Love Supreme and Wise Men Say in starting the Donald Out campaign, which ultimately set off the chain of events that has led us to both a new owner and a new Supporters Trust.
We, like them, judged that the series of broken promises meant that it was no longer tenable for Donald to remain in charge as custodian of our club’s future. I initially took some convincing to move away from a “better the devil you know” position, fearful as I was about the financial state of the game even before the pandemic hit, but it was a conversation with Dave Rose of Red & White Army where he went through all the things that had been said and not done that ultimately made me #DonaldOut too.
The close relationship that fan media and the club had enjoyed stopped almost immediately, and they also refused to engage in structured dialogue with fan groups.
We defended others in the fan media when they were threatened with legal action and personally attacked by Donald. We were as glad to see the back of Donald as anyone when it all got too much for him, and we celebrated with other fans when he sold the majority of his stake in the club.
Sunderland’s fan media includes a cluster of long-established, well-respected and award-winning outlets. Each has its own spin on things, as should be the case. We compete, we disagree, we have different audiences, and different perspectives, but we need to continue working through our democratic structures to get the answers to the important and pressing questions that concern us as fans, bloggers, and podders.
Amongst the opinion, there are also hard truths born out by observable facts. Kyril Louis-Dreyfus is now firmly in charge of Sunderland AFC, but Juan Sartori, Stewart Donald, and Charlie Methven remain minority shareholders. This much is very well established.
We have wholeheartedly welcomed KLD taking effective control of the club because, whilst it’s not perfect, his new regime does represent a significant change in the way we approach the game and fundamental progress for Sunderland AFC as we rebuild following the worst decade in our history.
With Sunderland two points off the top of the table with the majority of the season to play - and in a League Cup quarter-final too - I can’t think of a reason to call for a change of course.