Sunderland’s chairman, Stewart Donald, has described his decision to borrow £9m from a group of United States-based investors as a “win-win” scenario for the League One club and claims he and his co-owners, Charlie Methven and Juan Sartori, are shouldering all the risk.
Donald acknowledges that defaulting on the loan would hand control of Sunderland to FPP – a company established by three American billionaires, Glenn Fuhrman, John Phelan and Robert Platek, with links to Michael Dell, of Dell Computers – but said he had made the arrangement for the club’s long-term good.
When FPP put €12m into Sunderland last month Donald presented it as an investment but no fresh stake had been taken and the money was a loan to Madrox, the holding company which owns the club. The money is secured against assorted assets including the 49,000-capacity Stadium of Light and the Academy of Light, a state-of-the-art, Premier League-calibre training ground.
It initially appeared a high-risk remortgaging but Donald, talking to BBC Radio Newcastle, conceded that, were he and his co-owners to default on the loan, Sunderland would simply fall under the control of FPP.
The Americans would gain a club relegated from the Premier League in 2017 after a decade in the top tier for a bargain £9m, and the current owners would lose the money they have put into Sunderland since buying out Ellis Short in a complicated £40m deal last year.
“The investment we have got – or loan, if you want to call it that – is into our holding company Madrox, and that owns Sunderland in its entireity,” said Donald. “The money is secured against everything that Madrox owns.
“So the only exposure, in reality, is for Juan, Charlie and I, because if we don’t make good on the repayment, all that basically happens is – what quite a lot of Sunderland fans want, I think – is that the guys who have lent us the money will have control of Madrox. We’d lose the money that we have invested, that would go into the ether, and the American investors would get the lot.
“They have invested into us, we will invest that money in Sunderland, and if we don’t invest it well or if we don’t make any repayments on the terms we have agreed, then it defaults to them. It’s a win-win for the club. Sunderland has got no debt; the ones that have the debt is ourselves to the Americans.”
Sartori, a Uruguayan businessman, owns 20% of Sunderland, Donald has a 74% stake and Methven a minority holding. The chairman is confident they will not lose their investment. “It won’t be defaulted,” he said. “We can get the money. Juan could put the money in tomorrow, I could put the money in. I could have asked Juan –who indeed offered – to put in the same amount of money as FPP but the idea was to get these guys.”
Donald talked of FPP potentially investing in business throughout the north-east and dismissed suggestions he and his co-owners were “chancers”, out to make a fast buck.
“One thing that isn’t fair, that isn’t right, is that we have come here as chancers to cash in and take the money,” he said. “We could have quite easily walked away with £30m-plus profit in the summer – we’ve had a lot of people interested in the club – but we chose not to do that because the idea was to bring in quality investment. The Americans involved are globally reputable, they have wonderful connections.”
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