AN old adage says that if you want to make a small fortune out of football, it is best to start with a big one.
With an estimated net worth of around £2bn, Ellis Short is not going to be destitute after walking away from Sunderland.
However, even for a billionaire, a loss of more than £200m over the course of ten years has to hurt.
As he reflects on his time as an English football club owner at his new base in the United States, Short must be rueing his decision to attend the Ryder Cup at Ireland’s K Club in 2006. That was where he first met Niall Quinn, and it was where the opportunity to invest in Sunderland first took seed. Rarely can a round of golf have proved so expensive.
By agreeing to pay off all Sunderland’s debt in order to facilitate a takeover by a consortium led by Eastleigh chairman Stewart Donald, Short has agreed to write off more than £100m.
Sunderland’s latest set of accounts, which cover the period to July 31, 2017, are due to be released later this week, and are expected to show that the club’s total debt rose slightly from the figure of £110.4m that was quoted in the previous year’s figures.
Around £70m of that figure was owed directly to Short, with the Irish-American financier having put in an extra £19.5m in the form of an interest-free loan during Sunderland’s final season in the Premier League to ensure that day-to-day expenditure could be met. Short will not see any of that money again, and has also settled the £50m-or-so that Sunderland owed in the form of an external bank loan.
Since taking over from the Drumaville consortium in 2008, Short has already written off more than £100m by capitalising a large chunk of the money that was initially loaned during the early years of his reign. Throw in the money that was paid to actually buy the club in the first place, and there is every chance that his total losses during his spell as Sunderland chairman will exceed £250m. That is quite some sum.
His desire to hand over a club that is debt-free is commendable, although as previous failed takeover discussions prove, it was probably the only way for him to devise an exit strategy that did not involve placing Sunderland into the hands of the administrators.
Short could have opted for administration, thereby reducing his own liabilities and negating the need to personally pay off the banks, but that would have crippled Sunderland for years and possibly decades to come. By avoiding that course of action, the outgoing owner has lived up to his pledge to be a sympathetic custodian of an institution he professes to love.
He deserves credit for the course of action he has taken, although any praise for the manner of his withdrawal has to be tempered by an acknowledgement of why Sunderland are in this almighty mess in the first place. A decade of decline has occurred on Short’s watch.
Having inherited a club that owed around £50m, the level of Sunderland’s external debt remained relatively stable during Short’s tenure. But that ignores the vast explosion in television revenue that occurred during the Black Cats’ ten-year stay in the top-flight. Premier League football has never been more lucrative, but Sunderland squandered their golden eggs and eventually found themselves excluded from the goose that was laying them. Short has to take responsibility for that failing.
He kept on tipping the money in during Sunderland’s spell in the Premier League, but did nothing when it was disappearing at an alarming rate. His chief failing was that he appointed a succession of senior figures who were completely unqualified for the job they were given.
An Italian agent, Roberto De Fanti, became Sunderland’s director of football with complete control over the club’s transfer policy. In the summer when Paolo Di Canio was manager, more than a dozen players arrived and money was lost on each and every one of them.
Lee Congerton’s spell as sporting director was equally disastrous, and between 2009 and 2016, Sunderland signed 46 players and sold just three – James McClean, Simon Mignolet and Darren Bent - for a profit.
Players were signed for a fortune, and allowed to leave for nothing when their contracts expired. As an example, more than £25m was spent on transfer fees and wages on Steven Fletcher and Danny Graham, yet the pair both left as free agents when their deals came to an end. There are dozens of similar examples.
When financial prudence was required, Short took his eye off the ball. Then when he decided things were out of control, with Sunderland sliding out of the Premier League, he turned off the taps completely, with even more disastrous consequences.
It wasn’t just signings that were an issue either. Short appointed Margaret Byrne, a corporate lawyer, to the position of chief executive. Her time in the role was a disaster, yet she still left with an £850,000 pay off despite her disastrous handling of the Adam Johnson case.
Short was a willing supporter of hair-brained initiatives such as the tie-up with Invest In Africa, a charitable institution funded by oil giant Tullow Oil, that saw senior Sunderland executives jetting off to Tanzania and South Africa while the club was foundering at home.
Far too much time and energy was devoted to non-footballing activities such as the summer concerts staged at the Stadium of Light or the promotional tours to South Korea and the United States that were supposed to grow the ‘Sunderland brand’. Short was supposed to be running a football club; instead, he was presiding over an institution that had its lost sight of its core reason to exist.
Only the 57-year-old will know whether he enjoyed his time at Sunderland. He was an aloof presence during his most of his reign, but there were times when he would wander through the press room at the Stadium of Light, nodding to those he vaguely recognised.
On the eve of Sunderland’s Capital One Cup final loss to Manchester City, he staged a function at a London hotel and invited members of the press. He appeared to be in his element, introducing his American friends to the glitz and glamour of his football club.
In hindsight, that was probably the high point of his reign. Further relegation battles followed, and eventually his appetite for being in charge of Sunderland waned.
He took over a club that was struggling, and bequeaths one that is at the lowest point of its proud 139-year history. Some going when you’ve also managed to lose more than £200m.
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