Leaked accounts show Sunderland's staggering £20.5MILLION financial hole as Stewart Donald 'writes off' debt Sunderland AFC are facing a £20.5MILLION hole in their club accounts – according to reports. A leaked draft set of accounts for the year ending July 2019 have been seen by the Daily Mail and the Times, who have revealed the staggering eight-figure shortfall in the club’s coffers. And as per the national reports, a number of investors who have looked at purchasing or investing in the club have been deterred by this significant hole. The Mail and Times claim that the £20.5million gap in the balance sheet represents one of the parachute payments to the Black Cats, which were due following their relegation to the Premier League. This sum has previously been reported to have been used to facilitate Donald’s purchase of the club for a sum of £40million. The purchase was facilitated through a holding company – Madrox Partners – and the national reports suggest that this £20.5million sum was used to help fund the deal. It was previously suggested that this money would be repaid by the shareholders, but the report claims that the money has now been written-off by Donald and his fellow shareholders by way of an 'exceptional operating expense' – which removes their legal obligation to repay the money. Sunderland have claimed that the money will be repaid as either a gift or by means of shareholder’s funds. They say that this process has already begun, but that it will take until the release of next year’s accounts for this to be evidenced. A full club statement said: “Madrox has continued to invest funds as required, (which will be reflected in next year's figures) and in a way to ensure the club remains debt free, as promised. “This has resulted in SAFC receiving around £11.5M since the year end, from Madrox. The funds are interest free and replace a significant portion of the parachute monies. “This takes the total Madrox investment to around £25M, to date. This investment, two years into their five year plan, is ahead of schedule.” A number of potential investors told the Mail and the Times that this hole in the club’s accounts – with no guarantee of repayment from the current owners – proved a stumbling block when they considered a takeover of the club. Indeed, the Echo understands that this was a significant issue for Mark Campbell’s consortium when they reached advanced stages of negotiations last summer. Sunderland remain up for sale, but a takeover is not expected in the coming months given the current global climate. Donald purchased the club from Ellis Short in 2018, initially as part of an ‘international consortium’ – which ultimately comprised the insurance tycoon, associate Charlie Methven and Uruguayan businessman Juan Sartori. Speaking at his first press conference after arriving on Wearside, Donald said: “We've given Ellis £40million so that's the big part. “Ellis was very clear that he didn't want the debt but we didn't want the debt either so we refused that benefit, which is only a paper tax benefit but nonetheless it leaves Sunderland with that debt. “So we said to Ellis that's fine, you wipe it and we won't take it." Charlie Methven added: “The discussion with Ellis was that we would be able to pay him over a period of time because he knew that we were going to have quite a lot of investment that needed to be made this summer. “As Stewart said the price was £40million and Sunderland are debt free.”
“Writing the debt off” is phrased so it looks like an act of charity. He created the debt, publicly said he’d pay it back then quietly did the opposite. If these accounts hadn’t been leaked he’d still be sitting on this information.
