Sunderland reports losses

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The Premier League club published its first annual results for the year ended 31 July 2005 since the club has been delisted from the stock exchange. Turnover fell by 11% to reach GBP 25.5m and the club reported a pre-tax loss of GBP 8.8m compared to a loss of GBP 1.2m the year before. The main reason for the loss is the club’s devotion of its investment activities towards strengthening the squad in order to achieve promotion from the Championship to the Premiership, a focus of resources that was ultimately successful.

According to the club’s official statement, it was determined to focus on achieving promotion after finishing third in the Championship the season before and twelve players were acquired in order to do so. Offers were rejected to buy some of the club’s players and the club made a small loss on the disposal of players compared to a profit of GBP 3.9m in the year ended 31 July 2004.

Club chairman, Robert Murray said: “We maintained one of the top wage bills in the Championship and committed over £1m net expenditure in transfer fees, a substantial investment in Championship terms.” A great deal of this investment will naturally be recouped through the earning of the significantly higher broadcast revenues available to clubs playing in the Premier League from the contact between BSkyB and the League. However, Murray warned that “any promoted club must live with the reality of moving quickly from the euphoria of promotion to being one of the favorites for relegation.”

Since the club was promoted they have continued to invest in players by using the loan system, contracting with free agents paid for by negotiating an increase in the length of the club’s loans. However, despite the investment the club’s net debt has stayed stable at GBP 40m.