Source: Northern_Echo
Quinn confident Pompey’s problems won’t befall Cats
THERE was a time when the only results that mattered in football were the ones that were determined on the pitch.[LNB] Not any more.[LNB] On Monday, Sunderland will release their financial results for the year ending July 2009, and after a month that has seen Portsmouth become the first Premier League club to enter administration, their contents will be considerably more important than anything that happens on the pitch during tomorrow's home game with Manchester City.[LNB] The headline figures will not make pleasant reading.[LNB] Sunderland will post a pre-tax loss of £26m, and expect to make a similar loss during the current financial year. Their external debt has been reduced, but still stands at £35m, and their wage bill, which has risen to £50m, represents an alarming 78 per cent of turnover, significantly above the recommended industry level.[LNB] Such figures are hardly unprecedented in the Premier League, but it is hard to take solace from the identity of the club that last posted similar results.[LNB] In their last set of published accounts, to May 2008, Portsmouth made a £17m loss, less than Sunderland's. Their turnover was £70.5m (slightly more than Sunderland's) and their wage bill was £54.7m (again, slightly higher than the Black Cats). Their wage to turnover ratio was 78 per cent, exactly the same as the one that will be contained in the accounts that Sunderland will release in two days time.[LNB] With that in mind, is it fair to conclude that the Wearsiders are a Portsmouth waiting to happen[LNB] Not according to chairman Niall Quinn, who spells out the difference between the two clubs in two words. Ellis Short.[LNB] In the last two years, Sunderland's billionaire American owner has completed his buy-out of the Drumaville consortium and purchased 100 per cent of the club's shares.[LNB] In addition, he has also invested a further £77m (£48m in the last financial year, £19m last summer and a further £10m in December) to pay off debts and subsidise the club's spending and losses.[LNB] In layman's terms, Short's investment has enabled the Black Cats to sign the likes of Darren Bent, Lee Cattermole, Lorik Cana and Michael Turner and pay them high-end Premier League wages. Without the American's support, Sunderland would still exist, but their starting line-up would contain Murphy rather than Mensah, Healy instead of Hutton.[LNB] All of which is fine and dandy until Short loses interest and decides to call time on his involvement. When Alexandre Gaydamak pulled the plug on his investment in Portsmouth, his desire to get his money back kick-started a financial unravelling that eventually ended in administration.[LNB] Could the same happen at Sunderland No, says Quinn, because of the model Short has used to invest his money in the club. Gaydamak's money was invested in the form of loans, which were repayable at a prearranged point in the future. Short's £77m has come via a process known as capitalisation', which involves shares rather than loans. If he was to say enough is enough tomorrow, he would be unable to recoup any of the money he has already spent.[LNB] Ellis has put an awful lot of money into the football club to allow us to improve our squad and pay debts from previous regimes, and he will never get that money back, said Quinn.[LNB] There is no noose around the neck of this club because we are having a go.[LNB] He is giving this club a chance on his terms, which I think it deserves because of its size and history. It is him that will take the hit, not the club. The club is safe, and that is also the case if we go down, the club is solid as a rock. The fans need to know his input is incredibly genuine.[LNB] But what is driving that input What does a Kansasborn American, who boasts business interests all over the world, see in a Premier League club stuck out on a limb in North-East England[LNB] A combination of things according to Quinn, from the sporting pursuit of raising the standards of one of English football's perennial underachievers to the financial vision of long-term growth and profitability.[LNB] People ask me, Why is he here' all the time, said Quinn.[LNB] Partly, it's the potential. He wants the asset to grow, and he feels in five to ten years, that asset will be worth far more than if he had just let it go. He feels it will be good value in time, especially with the way the value of the world (television) rights is going.[LNB] But he also has an emotional attachment which is incredibly important. I drove him into Sunderland city centre after the Chelsea match on the last day of last season and said, I've got to show you this to give you an idea of what I'm on about'.[LNB] We'd just survived by the skin of our teeth, but our fans were literally dancing in the streets. We drove through and he said, This Sunderland is one crazy, son-of-a-bitch club'.[LNB] That's exactly what it is, welcome to Sunderland.[LNB]
