Sunderland could pull off £35m FFP trick as Kyril Louis-Dreyfus and Juan Sartori ‘protect the club’

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For Sunderland and their peers, subsisting financially in the Championship is a lot like living in the flat below a tenant who’s constantly staging riotous house parties.

There’s a racket upstairs – the Premier League – and you’ve got two choices: stew in resentment or splash out on overpriced drinks just to get a seat at the table.

Okay, it’s a stilted analogy, but it’s pretty much the playbook of most Championship clubs. For their part, thanks to their outsized commercial and matchday income, Sunderland are more sustainable than most.

The Black Cats haven’t made a financial profit for a very, very long time but, under the command of Kyril Louis-Dreyfus and Juan Sartori, they have owners who can underwrite the losses.

Their spending in the transfer market and on the wage budget since promotion from League One has gradually ramped up. Crucially, they have spent smartly.

Signings like Wilson Isidor and Enzo Le Fee have secured them a spot in the Championship play-offs for a second time in three seasons.

Position	Team	Played MP	Won W	Drawn D	Lost L	For GF	Against GA	Diff GD	Points Pts
1	LeedsLeeds	42	25	13	4	82	29	53	88
2	BurnleyBurnley	42	24	16	2	57	13	44	88
3	Sheff UtdSheffield Utd	42	26	7	9	57	33	24	83
4	SunderlandSunderland	42	21	13	8	57	38	19	76
5	Bristol CityBristol City	42	16	16	10	54	45	9	64
6	CoventryCoventry	42	18	9	15	59	54	5	63
7	West BromWest Brom	42	14	18	10	51	39	12	60
8	MiddlesbroughMiddlesbrough	42	17	9	16	61	51	10	60
9	MillwallMillwall	42	16	12	14	41	41	0	60
10	BlackburnBlackburn	42	16	8	18	45	45	0	56

Investment in the stadium and academy meanwhile have ensured that Sunderland haven’t bet the far on promotion this term. It’s not a boom-or-bust scenario, as we see so often in the EFL.

For that, the owners deserve a lot of credit, especially in light of the mess they inherited from Stewart Donald and Charlie Methven.

As the heir to a £4bn fortune, the depth of Louis-Dreyfus’ pockets has never been on doubt on Wearside. His age, however, did have some fans questioning whether he had the necessary credentials.

But when you have access to the Louis-Dreyfus family’s contact book, you’re probably not short of helpful advisers from the world of finance.

The family also have deep connections within football. Kyril’s late father, Robert Louis-Dreyfus, was CEO of Adidas and owned Marseille during one of the more successful periods of the French club’s history.

Indeed, Kyril Louis-Dreyfus is said to still hold a five per cent stake in Marseille.

Previously, the 27-year-old has also been linked with purchasing Brazilian side Vasco da Gama. Sartori meanwhile is a board member at Monaco.

Could a burgeoning multi-club empire be in the works?

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Kyril Louis-Dreyfus and Juan Sartori’s new company could shield Sunderland from debt burden

At the end of March, Louis-Dreyfus quietly set up a new company on Companies House, the UK’s business registrar.

The firm, which goes by Bia Sports Group, appears to have been active for quite a while longer, listing Sunderland and the World Supercross Championship among its investments.

In the last few days, Bia Sports, who also list Sartori among its founders, have stacked the company with a number of new hires with impressive CVs.

Officially, Sunderland’s holding company – the parent firm with ultimate control – is Mercator Investments Limited, but could Bia Sports be about to take over in a corporate restructuring?

According to University of Liverpool football finance lecturer Kieran Maguire, Bia Sports Group could be a vehicle to allow the Black Cats to take on debt without impacting the club’s FFP quota.

“It’s certainly a model that we are seeing adopted more and more,” said Maguire, speaking exclusively to EFL Analysis.

“Look at the umbrella company for Chelsea, 22 Holdco. That sits above Chelsea and Strasbourg.

“Chelsea generate 90 per cent of the revenues of that group and 80 per cent of the amortisation costs. But Chelsea posted a profit of £120m and 22 Holdco published a loss of £480m.

“That shows the benefits of a holding company that can be used as a vehicle for raising finance.

“In the case of Chelsea, what has happened is 22 Holdco has borrowed an awful lot of money and appears to be paying interest at pretty eye-watering rates, but because their investment into Chelsea is in the form of shares, none of that interest burden is being borne by the football club.

“What we might see at Sunderland is an attempt to protect the club in terms of funding costs, going through the books at the football club and just being borne by the parent.

“It would allow Louis-Dreyfus to broaden the investment portfolio as we have seen at City Football Group and other multi-clubs.

“So we will await developments with interest, but it won’t have been done just on a whim.

“There is no indication of any funding for this organisation yet, but it could borrow money in theory and it wouldn’t affect Sunderland as far as FFP is concerned.”

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Could £35m loan be the reason for Sunderland’s new investment vehicle?

Another recent filing on Companies House shows that Sunderland have registered a charge with a firm called Akira, which signified a loan between the club and company.

Sunderland have used the Stadium of Light as security in the debt deal, but that shouldn’t worry fans as Akira is the holdings company of the Louis-Dreyfus family business.

The money will be used to cover cash flow, which is common at this point in the season when revenues are slow, and the owners have said that £20m worth of debt will at some point be converted into equity.

Separately, however, it has been reported that Sunderland have been in discussions with MSD Holdings, a private lender founded by technology titan Michael Dell, about a potential £35m loan.

Sunderland have previously borrowed from MSD Holdings to ease cash flow.

Could it be that the would-be MSD loan is registered with a separate legal entity, Bia Sports perhaps, and be used to cover the loan from the Louis-Dreyfus family?

If so, that would exempt any interest on the debt – and MSD are known to charge EFL clubs upwards of 10 per cent – would be exempt from Sunderland’s FFP calculation.