Louis-Dreyfus and Sartori reach ‘private arrangement’ over Sunderland debt
Sunderland owners Kyril Louis-Dreyfus and Juan Sartori have transformed the Black Cats since they arrived in 2021.
Sunderland were in a poor state prior to the change of ownership, languishing in League One under Stewart Donald. However, the North East outfit are on their way back to where they should be.
The Black Cats are in the Championship play-offs as they attempt to return to the Premier League for the first time since 2017, and promotion would give their finances a massive boost.
However, one concern over the club’s finances has been flagged.
Sunderland owners delay equity conversion
The Sunderland owners are popular among fans. However, it recently emerged that they are yet to convert £20million of debt to equity as promised.
This essentially means that while Sunderland are not paying interest on any of their loans, on their accounts, their debt is shown as £20million to holding company Mercator.
Football finance expert Kieran Maguire told the Sunderland Echo (8 May) that the two majority shareholders, Louis-Dreyfus and Sartori, may have an agreement to delay these payments.
“The reason why the loans from Mercator haven’t been converted into equity just yet could be due to some form of private arrangement between Louis-Dreyfus and Sartori,” Maguire stated.
“They might have decided who’s going to contribute the most, and under what circumstances would that cause involve what would happen if Sunderland are promoted this season or another season. So, there’s a variety of reasons why debt isn’t converted into equity.
| Championship | W | D | L | P |
| Sunderland (4th) | 21 | 13 | 12 | 76 |
“Sometimes it’s tax planning, sometimes it’s long-term financial planning.”
Maguire went on to state that Sunderland may be aiming to follow Brighton’s financial model, which has proven to be one of the most profitable in the world.
“It could be that they might follow a similar approach to that of Tony Bloom of Brighton, who put £400million in as loans and said he’d only take it out if the club started being profitable in the Premier League, which it has done for the last couple of seasons.
“If that’s not the case, then the money’s not taken out.”
Sunderland need Premier League promotion
Sunderland’s model under the current owners has not been dissimilar to that of Brighton’s, with young talents scouted and developed before being sold for profit or used in the first team.
Watson is the latest player to generate pure profit as a homegrown player, with the attacker moving to Brighton next season.
A lot of Sunderland’s best young players have been scouted by other clubs. However, promotion to the Premier League would enable them to keep these stars.
If Sunderland fall at the last hurdle in the play-offs, then they will struggle to keep hold of their key stars.
While their model will enable them to profit and replace them, it will still create a difficult situation for manager Regis Le Bris.