Sunderland have £200m ‘stretch target’ as Kyril Louis-Dreyfus sets Premier League transfer budget
Sunderland’s financial situation has changed drastically following their Championship play-off final win, and EFL Analysis has dissected what transfer budget the club will possess for next season.
Sunderland’s Championship play-off final win over Sheffield United has dramatically changed the financial firepower of the club.
The Black Cats have already made one signing, with Roma loanee Enzo Le Fee becoming a permanent player, and the Frenchman will not be the last to sign on the dotted line for Sunderland this summer.
Sunderland have banked a staggering fee, north of £200 million, as a result of their Premier League promotion and will need to spend wisely to equip Regis Le Bris with quality reinforcements ahead of an inevitably testing top flight return.
As the summer transfer window ramps up, EFL Analysis’ resident football finance expert has shed light on the Premier League transfer budget Sunderland owner Kyril-Louis Dreyfus will set for next season.
Sunderland owner Kyril Louis-Dreyfus’ Premier League budget
Business has begun on Wearside, both in terms of incomings and outgoings, in the wake of their dramatic win at Wembley.
Jobe Bellingham is linked with a move to Borussia Dortmund, Le Fee is set to become a permanent Black Cats player, and Sunderland have been linked with a move for £20m defender Wilfried Singo.
Investment and recruitment will need to be wise to survive in the top flight next season, aided by their increased financial firepower as a result of promotion.
Regarding Sunderland’s financial situation for next season, EFL Analysis’ football finance expert Adam Williams explained: “The thing about Premier League promotion is that it’s framed as this stunning rise in revenue – and that is true – but what people regularly omit is that the extra revenue is often swallowed up entirely by extra costs.
“We’re seeing different clubs take different approaches these days as a result.
“Some go for boom-or-bust. Nottingham Forest, for example, are a good example of a non-parachute payment Championship club that this has worked perfectly for.
“On the flip side, you’ve got someone like Ipswich, who spent £100m-plus only to go straight back down.
“Others, take Luton Town in 2023-24 for example, are more conservative. The aim there was to not bet the farm and then, if they do go down, use parachute payments to build more sustainably. We all know how that went.
“There are clubs for whom it’s working, though. Burnley are a good example.”
How much can Sunderland spend this summer?
Looking ahead to the Black Cats’ potential summer spending power, Williams continued: “So how much Sunderland spend in the summer depends on which approach the owners want to take, basically.
“They have the luxury of pretty good baseline revenues by Championship standards, so I think that means they can afford to be more ambitious than someone like Luton.
“If they beat relegation, they’re probably going to get about £125m in prize money as a minimum. Their revenue at the moment is just shy of £40m.
“If they get sponsorship and ticketing right, I don’t think it’s out of the question that they could be pushing towards £200m total revenue, which is really, really good for a newly-promoted club. It’s a stretch target, but they won’t be a millions miles off.
“That gives you a big cushion with PSR. However, it’s a double-edged sword going up as a non-parachute payment club in terms of the spending rules.
“Because Sunderland will have spent two of three seasons in the Championship, their losses over three years will be capped at £61m, otherwise they’ll breach PSR.
“They lost £17m in 2023-24. We won’t have the 2024-25 accounts for some time yet, but I suspect they’ll probably be something like £10m for the season.
“Add back PSR-allowable expenditure, Category 1 academy investment and so on, and they’ll be at negative £15m or so going into 2025-26.
“So that gives them leeway to room to lose just less than £40m before they breach PSR.
“Remember, any transfer fees paid are amortised over up to five years, so if Sunderland spend £100m this summer, it’s likely that only £20m of that will count towards the profit-and-loss account next year.
“So, long story short, I don’t think PSR is going to be a problem unless they go absolutely crazy in the transfer market and start paying huge wages straight away. I don’t think that’s Louis-Dreyfus’ style.”
As Williams explains, Sunderland could be pushing for a “stretch-target” of £200 million in revenue, and we can also reveal the Black Cats hierarchy’s expected investment fee for the summer window.
Expert explains Sunderland’s expected investment fee ahead of Premier League return
Football finance expert Williams has also explained the expected level of investment that the Sunderland hierarchy will be able to inject upon the club’s Premier League return.
“The benefit of coming up as a non-parachute payment club is that you’re usually not coming from a particularly high wage base either, so there’s plenty of room to increase operating costs with Premier League TV money before you get into the red.
“Access to liquid cash is another factor. You obviously don’t get all the Premier League prize money in one go.
“But with season ticket renewals, player sales and the first quarterly tranche of broadcast cash in the summer, I don’t think they’ll need to go to the owners for short-term cash either.
“I’d be surprised if we didn’t see an investment around the £100m mark in net terms. That means if they sell one or two of the promising youngsters they’ve got on top of that, their total spend could be significantly higher. They’ll have to do the cost-benefit analysis there.”
Bellingham is expected to be that “promising youngster” Williams mentions, who could be sold given his transfer talks with Bundesliga sides, with Chris Rigg also attracting interest from elite European clubs.
Williams concluded: “Either way, I think Sunderland have the opportunity to make a good fist of it in the Premier League. If they can survive that first season, they’re a sleeping giant for sure.”
