Kyril Louis-Dreyfus praised for 'adult' financial approach with Sunderland emulating Brighton & Brentford. Majority owner and billionaire Kyril Louis-Dreyfus has been praised for his financial approach at Sunderland... Kyril Louis-Dreyfus has been praised for his “adult” financial approach at Sunderland. Since he arrived at the club, the French billionaire has implemented a strategy of gradual improvement with Sunderland targeting a relatively sustainable approach in the Championship. The Black Cats have sold players for big money such as Ross Stewart and Jack Clarke, while also recruiting well. For instance, players like Jobe Bellingham, Dennis Cirkin and Trai Hume are now worth much more than Sunderland initially paid for them. The club have also utilised the Academy of Light with the likes of Dan Neil, Chris Rigg, Tommy Watson and Anthony Patterson now worth tens of millions. The strategy has worked well thus far with the Black Cats winning promotion out of League One after a four-season stay. Sunderland then improved to reach the Championship play-off semi-finals the season after before enduring a disappointing campaign in the second-tier during 2023-24. However, under Régis Le Bris, Sunderland are now back on course and in the mix to win promotion to the Premier League. Indeed, majority owner Louis-Dreyfus has been praised for his management of Sunderland’s finances and their incremental improvement by football finance expert and academic Kieran Maguire. Kryril Louis-Dreyfus takes ‘adult’ and ‘sensible’ approach. “It's a horrible word to hear if you're a football fan who wants to get your club promoted, that sensible makes sense,’ Maguire told The Echo when asked about Louis-Dreyfus’ management of Sunderland’s finances since his arrival at the club. “Look, I'm a Brighton fan. They had a long-term plan to get to the Premier League and it was gradual improvement season by season. Brentford did the same and those two clubs are probably now the poster boys for how effectively the clubs with a modest fan base in terms of the ability to sell tickets can get there and establish themselves. “I think the Kyril Louis-Dreyfus approach appears to be adult. We want to be indulged as football fans. We want to set aside reality and live in a world of fancy football, but it doesn't work. There have been many owners, some of whom may have been at Sunderland, who talk the talk but don't walk the walk in terms of progressing the club. The scars of those years still remain. “As an outsider observing, the average losses in the Championship, I think I calculated, is £370,000 a week. That's £18 to £19 million a year. Sunderland are being subsidised by Kyril Louis-Dreyfus. I think he's set out the limits to the extent to which he wants to subsidise the club. “The budget works on that basis. As we saw with Stewart Donald and the legendary signing of Will Grigg, you've got to be adult and you've got to be professional when it comes to player recruitment. If you gamble and lose, it can be quite a significant setback for two or three years.” The strategy challenges Sunderland’s strategy could face in the future “I think the approach which Sunderland appear to be taking is that we can't be bigger, so therefore we're going to be smarter and if you have a culture, if you have a strategy and you stick to that, and sometimes people don't want that because that involves long-term planning,” Maguire added. “And as we both know, in the Saturday, Tuesday, Saturday environment of football, eight days is a long time in football. You lose three matches, it's people screaming for their manager out. I was at Nottingham Forest two weeks ago, Brighton lost 7-0. And then I went onto the forum afterwards, more than half the fans are screaming for the manager to be sacked. “And then we beat Chelsea twice in a week, and it's as if it never happened. So yeah, football is a weird industry in the sense that success is built on long-term strategy. The emotion is an instant fix, an instant hit, and trying to reconcile those two is really difficult.” What did Sunderland’s latest set of financial accounts reveal? Sunderland made an operating loss of £9million in their first campaign back in the Championship, the club's accounts tell us. The Black Cats released their annual report covering the 2022-23 campaign last May, which saw the club surpass all expectations on the pitch to secure a sixth-place finish in the Championship, before losing to Luton Town in the play-off semi-final. The losses have grown from the £5.1million figure in Sunderland's promotion campaign in League One, underlining the challenge of attaining sustainability in the second tier. Sunderland's return to the Championship led to a sharp increase in media revenues as a result of greater revenues from the EFL's TV deal, which did lead to a significant increase in the club's overall turnover. The club brought in £35,543,000 over the course of the season, up from £26,099,000 in the previous campaign. This was also helped by growing commercial revenues, aided by the return of summer concerts to the Stadium of Light. The Echo has launched a new WhatsApp SAFC channel to bring the latest news, analysis and team & injury updates directly to your phone. Simply click this link to join our SAFC WhatsApp channel. This was significantly offset, however, by a major rise in operating expenses and primarily through the growth of the club's overall wage bill. Operating expenses rose to £41,048,000 from £30,380,000 the previous season. This was driven mostly by the rise in the wage bill, which grew to £25,614,000 from £16,289,000. The notes accompanying the accounts, signed off by Kyril Louis-Dreyfus, said: "Turnover increased from £26.1m to £35.5m. and operating expenses increased from £30.4m (restated) to £41.9m. The loss after tax for the year was £8.9m. During the 22-23 financial year, the Club received £5.5m from shareholders. The shareholders have a strong commitment to continue to support the Club and its ambitions. Since Kyril acquired control, the shareholders have contributed a total of £18.1m." The club made a £308,000 profit on player trading over the course of the year. With the accounts covering the period up until the end of July 31st 2023, this means that figure does not include returns received from the sales of Isaac Lihadji, Lynden Gooch and Ross Stewart, all of which will be shown in next season's accounts. The acquisitions of Adil Aouchiche, Timothee Pembele and Nazariy Rusyn are also not included due to their arrival on deadline day, though significant summer additions such as Jobe Bellingham were. Obviously several trades - both incomings and outgoings - have taken place at Sunderland since the last set of accounts and the period the cover were revealed. Fans will be able to gain a more up-to-date picture when the next set of figures are released, presumably at some point in 2025. The last set of accounts also revealed the club's key focus in trying to reduce losses further in the years ahead. Their commitment to investing in young players and the club's academy was highlighted in the board notes, which remark on the club having the youngest average age in the Championship and that 109 consecutive games (at the time) had featured a club academy graduate at the end of the season.
Part 2 Football finance has become big business in recent years with large swathes of cash entering and exiting the game at an alarming rate. That raises the question: why should fans, care? There is a balance to be had, it would seem, between ambition and sustainability. Ellis Short, you could argue, showed tremendous amounts of ambition at Sunderland before it all started to go wrong. The American signed the cheques away every month and the club became unsustainable. Once Short, pulled the plug, problems arose. However, Short’s successors - Stewart Donald, Charlie Methven and Juan Sartori - became obsessed with cost-cutting and sustainability after purchasing the club leveraged against its own Premier League parachute payments. They took it too far, there wasn’t enough investment in the right areas in terms of structure and player acquisition and Sunderland languished in League One for four seasons. Madrox also sold many of the club’s most promising young talents at the time. Donald and Methven departed, Sartori somewhat curiously stayed and along came Kyril Louis-Dreyfus, under whom Sunderland have invested. There is now a proper scouting department and a first-class data analysis team. The Black Cats have a sporting director and a head of recruitment alongside an academy manager. In terms of the modern footballing world, this is how you have to do it if you’re going to make it to the top. Another key facet of football finance is, of course, buying players for money. It is what gets our juices well and truly flowing as fans and in the media. However, a curious argument seems to arise now and again when Sunderland are chasing a player. Take Kieffer Moore in January 2024, for example. Michael Beale desperately needed reinforcements and Sunderland, at the time, were in with a shout of making the play-offs before it all went horrendously wrong. Ipswich Town ended up signing the Welshman and winning promotion to the Premier League as they were prepared to offer more money in wages. Supporters were split into two camps. The first centred around the cash. The figure quoted to cover Moore’s wages were astronomical for a Championship club. Many fans argued that at that price, they weren’t keen on the deal. The second camp thought that it wasn’t their money, so why should they be bothered? It made for some interesting social media interactions, let me tell you. However, the debate is an interesting one. Should fans, ultimately, be bothered about how much Sunderland’s French billionaire owner spends on transfer fees? Especially when it isn’t our money he is spending to a large degree, though many fans would rightly argue their spending across a lifetime entitles them to a say. The Echo caught up with football finance expert and university academic Kieran Maguire for his take. Should Sunderland fans care about what the owner does? “Spending other people's money is quite painless, isn't it? If I think about where football finance was. I've been involved in it now for quite some time, it used to be a non-subject. Now, rightly or wrongly, and a large part of me says wrongly, even though I've benefited personally in terms of my career, it is something which fans take interest in,” Maguire told The Echo. “It is something which the media take interest in, partly due to the fact that we're dealing with an extra couple of zeros in terms of the numbers, which means that there's no way 10 years ago or 20 years ago private equity or hedge funds would be interested in football, but now it's seen as an opportunity to invest and make money. “We've got new people coming into the game. We've got celebrity and notoriety being associated with football finance. Outside of our immediate family, your football club is extended family and therefore, I think as far as the finance is concerned, you want the knowledge that you'll be able to hand over the love that you have to your kids and your grandkids, but there are people out there that will gamble with the future of your club and therefore having the knowledge of the finances and an awareness of this isn't sustainable. “I know sustainable is a bit of a word which generates a mixed response because there's another club in the northeast called Newcastle United. They had an owner called Mike Ashley who operated a very sustainable financial regime, and it created misery amongst the fans because we don't want sustainability. “We want glamour. We want glory. We want to be bestowed upon with expensive trinkets in the form of football players and that is not part of a sensible financial regime, and trying to tread the right path in terms of being ambitious and being prudent and sensible is genuinely tough.”
The fans who want the owners to hoy their millions at it will be the first to moan when their season tickets go up. I'm all behind the current regime.
Eh? But… but… we’re only 4th, with a team that we built, we should’ve signed keiffer Moore for £25m (if you don’t realise, I’m being very sarcastic!! I agree completely with you)
