Sunderland's £9m million loss explained and what you need to know after accounts released

Sunderland made an operating loss of £9 million in their first campaign back in the Championship, the club's accounts have today revealed

The Black Cats have released their annual report covering the 2022/23 campaign, which saw the club surpass all expectations on the pitch to secure a sixth-place finish in the Championship, before losing to Luton Town in the play-off semi final. The losses have grown from the £5.1 million figure in Sunderland's promotion campaign in League One, underlining the challenge of attaining sustainability in the second tier.

Sunderland's return to the Championship led to a sharp increase in media revenues as a result of greater revenues from the EFL's TV deal, which did lead to a significant increase in the club's overall turnover. The club brought in £35,543,000 over the course of the season, up from £26,099,000 in the previous campaign. This was also helped by growing commercial revenues, aided by the return of summer concerts to the Stadium of Light.

This was significantly offset, however, by a major rise in operating expenses and primarily through the growth of the club's overall wage bill. Operating expenses rose to £41,048,000 from £30,380,000 the previous season. This was driven mostly by the rise in the wage bill, which grew to £25,614,000 from £16,289,000.

The notes accompanying the accounts, signed off by Kyril Louis-Dreyfus, said: "Turnover increased from £26.1m to £35.5m. and operating expenses increased from £30.4m (restated) to £41.9m. The loss after tax for the year was £8.9m. During the 22-23 financial year, the Club received £5.5m from shareholders. The shareholders have a strong commitment to continue to support the Club and its ambitions. Since Kyril acquired control the shareholders have contributed a total of £18.1m."

The club made a £308,000 profit on player trading over the course of the year. With the accounts covering the period up until the end of July 31st 2023, this means that figure does not include returns received from the sales of Isaac Lihadji, Lynden Gooch and Ross Stewart, all of which will be shown in next season's accounts. The acquisitions of Adil Aouchiche, Timothee Pembele and Nazariy Rusyn are also not included due to their arrival on deadline day, though significant summer additions such as Jobe Bellingham are.

The accounts also reveal the club's key focus in trying to reduce losses further in the years ahead. Their commitment to investing in young players and the club's academy is highlighted in the board notes, which remark on the club having the youngest average age in the Championship and that 109 consecutive games had featured a club academy graduate at the end of the season.

The club has also made clear that it is planning to invest to try and grow the club's commercial revenues further - and cite the planned wind farm on the club land near the Academy of Light as one future source of revenue.

"The Club will continue to strive to secure promotion to the Premier League," the notes read.

"As a Club that aims to be financially sustainable this will be built on continued investment in the Club to improve the overall commercial performance. In future seasons we are aiming to increase the contribution from commercial activities to allow greater investment in on-field playing success."

The accounts also reveal that the club’s debt to Mercator, the parent company run by Kyril Louis-Dreyfus and Juan Sartori, has risen to £18,050,000. The accounts continue to insist that this will at some stage be converted to equity.