Tightening purse-strings to hamper O'Neill's ambitions
Published 06/12/2011 | 05:00
Martin O'Neill, who will be presented as Sunderland's new manager today, inherits a club badly needing to reduce its wage bill to stem losses which have set it on course to fail Uefa's financial fair play rules (FFP).
O'Neill has been told by the club's owner Ellis Short that he will have funds to strengthen the squad in next month's transfer window, though the club's losses of £23.5m and £25.5m in the last two seasons must be radically reduced if they have future aspirations to play in Europe.
This season has brought the start of the three-year monitoring period of FFP, during which clubs may post no more than £45m aggregate losses, though Sunderland, whose wage bill was 72pc of turnover in their last financial year, are on course to record an aggregate loss of £73.5m unless they can begin to reduce that figure.
Short put £19m of equity into the club earlier this year and invested £48.5m in the last financial year but, because losses of over £5m a year are only acceptable under FFP rules if there is an injection of equity to cover that loss, he may have to plough in a further £40m.
Though clubs who do not seek European qualification do not have to comply with the FFP regime, Short has made it clear that he does want to ensure that Sunderland comply and can aspire to Europa League football at least.
Having invested £67.5m of his own money into the Wearside club over the past 18 months, he faces a major challenge in lifting revenues, as Manchester City have. "With financial fair play rules coming into effect, it is essential for the long-term success of the club that we develop interests on a global scale," Short said.
This may not be encouraging news for O'Neill, who will have no greater budget to work on than Steve Bruce was given over the last two years. O'Neill is likely to have known what he was walking into at Sunderland, though it was his frustration when another American proprietor, Randy Lerner, failed to meet his spending expectations which caused him to walk out of the manager's job at Aston Villa shortly before the start of last season. (© Independent News Service)