How Championship rivals' £400k per week losses shine new light on Sunderland model

Hull City are an example often offered of a Championship club showing 'ambition,' but their published accounts show the value of Sunderland's more cautious approach.

Michael Graham | Feb 6, 2024

How Championship rivals' £400k per week losses shine new light on Sunderland model /

If there is one topic that has divided Sunderland fans since promotion, it has been the club’s spending. Simply put, as far as many fans are concerned, Sunderland are just not spending enough.

It’s an understandable frustration. There has always been a direct correlation in football between spending and ambition. If your club spends, you are giving it a right go, if not, you’re settling for mediocrity. It’s just the way it has always been.

From there, it all gets very counter-intuitive. We know there is more money in football than ever before, yet we are also told clubs and owners are more restricted that ever. We see other clubs in the Championship, smaller ones, spending far more than Sunderland, whilst also being told Kyril Louis-Dreyfus cannot bankroll the club. No wonder there is so much debate.

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One of the clubs that appear to be spending with freedom is Hull City, and they are often held up as an example of what Sunderland could be doing if they had ambition.

That’s half right, without a doubt. Sunderland absolutely could be doing what Hull are, but whether it would be aligned with ambition is far from certain – and the Tigers have just released their accounts to prove it.

Sunderland are yet to do the same, although that day will come. When they do, the chances are many fans will be surprised at how much Sunderland are investing in the club. In the meantime, though, the Hull figures make very interesting reading.

After all, we are talking about two clubs, one point apart in the table, trying to achieve the same thing by different methods.

Hull City having a go

The figures released by Hull are for last season, so 2022/23, but they make eyewatering reading.

Although their revenues were up, so were losses and wages. The headline figures certainly show a club having a real go under Turkish owner Acun Ilicali.

Wages have skyrocketed 86% to £24million per year. That is 131% of revenue, which is clearly unsustainable. Little wonder, then, that Hull posted operating losses of £21million for the season.

Spending on transfers was up quite significantly too, although that, and some of the losses, was offset by selling Keane Lewis-Potter to Brentford for a fee reported to be up to £16million.

Hull City publish 2022/23 accounts 🔑figs
⚽️Revenue £18m (⬆️18%)
⚽️Matchday £6m (⬆️ 12%)
⚽️Wages £24m (⬆️86%)
⚽️Op Losses £21m (⬆️162%)
⚽️Player purchases £8m
⚽️ Player sales £15m #hcafc
— Kieran Maguire (@KieranMaguire) February 6, 2024

We don’t know how Hull are doing, money wise, for this season yet, but we do know that spending has continued. They signed Jaden Philogene for £5million and paid fees for Abdülkadir Ömür, Ivor Pandur, and Aaron Connolly as well.

Meanwhile, Hull have been incredible aggressive in the loan market, taking Fabio Carvalho, Liam Delap, Tyler Morton, Anass Zaroury, Ryan Giles and, earlier in the season, Scott Twine, from Premier League sides, as well as Noah Ohio from Standard Liege.

It’s very clear, then, that spending has continued.

The Tigers have increased their revenues since last season too, thanks largely to a new seven-figure sponsorship deal with McVities over the next three years. However, there won’t be another eight-figure player sale in this season’s accounts to help the balance sheet.

If Hull can spend that much, why can’t Sunderland?

To be absolutely clear here: Sunderland can. There is nothing at all preventing Sunderland from doing the exact same thing. Financial Fair Play is often cited as the reason but Hull are not breaking any rules there so neither would Sunderland.

The reason Sunderland are not doing it is because they are simply choosing not to – and there is a good reason for that.

Ultimately, what we are seeing from Hull at the moment is a snapshot in time. They’re the player around the poker table, pushing all of their chips into the centre of the table. It’s bold but it’s not necessarily wise, and ultimately the outcome is yet to be revealed.

There will only be two outcomes either. Glory or bust. True, they might get promoted and walk away with the winnings, or they will lose the lot and probably have to leave the table.

Acun Ilicali - Hull City owner — IMAGO / Focus Images

Because, in the end, FFP has brought strategy into the boardrooms of clubs. Championship clubs almost all make a loss in pursuit of the Premier League. It’s largely inevitable due to the fact the revenue streams are very limited below Premier League level, although the costs are still incredibly high.

It’s now about how and when you take those losses, because the reality is that the books have to be balanced in the end. Hull have decided to go for a high-risk, instant reward strategy. They are hoping Premier League income will balance the books. However, if they can’t get promoted, then they will have to come up with another way to do it.

"Clearly, they are ambitious and that's ok,” football finances expert Kieran Maguire told Hull Live.

“But then you've got the spectre of the PSR (profit and sustainability rules) and the losses of £39m spread over three years, so if they don't go up, it could be that we might need a bit of a reset this summer or probably the sale of one or two of the most attractive players.

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"The owner in my view, has gone for it, has decided to effectively, if you're playing poker has effectively gone all in, in respect of investing this season and if that's successful, absolutely fantastic. If it's not, then you have to adjust your finances accordingly."

But again, a key point here is that player sales – and for Hull that would mean Jacob Greaves and/or Jadon Philogene – would be needed to simply to pay the piper. Little would be available to reinvest into the squad and replace those key players, or indeed the army of loanees upon which the Tigers currently rely.

That would obviously make another promotion bid an awful lot harder and would likely see Hull forced to sink into Championship midtable whilst they readjusted their finances, a little like we have seen Blackburn Rovers have to do.

How are Sunderland trying to be different?

I mentioned earlier about how FFP has brought strategy into the boardroom of clubs, and a cornerstone of Sunderland’s is the belief that strength lies in sustainability.

There is no lack of investment at Sunderland and it has always been a little strange when the accusation is made.

In the last two transfer windows, Sunderland have outright bought 11 players: Nazariy Rusyn, Jenson Seelt, Romaine Mundle, Jobe Bellingham, Leo Hjelde, Timothee Pembele, Eliezer Mayenda, Luis Hemir, Nectarios Triantis, Adil Aouchiche and Nathan Bishop.

That’s a lot of money going out of the door. It has been largely funded by the sales of Isaac Lihadji and Ross Stewart, which were believed to have bought in around £10m between them (before any conditional add-ons and after Ross County’s sell-on on Stewart), but Sunderland are still investing.

What they are not doing, though, is committing to spending beyond their means, creating a dependency upon Premier League money they have not yet earned.

In doing that, they believe they can sustain a promotion bid for however long it takes to get them to the Premier League. Without Premier League money needed to offset the losses of getting promoted, it also means Sunderland will be able to focus that money on funding further improvements once they do have it, strengthening their chances of establishing themselves in the top flight at the first opportunity.

If we go back to the poker analogy, whilst Hull are boldly going all in at the risk of getting knocked out of the game, Sunderland are cautiously and carefully managing their bets to make sure they are still at the table when the moment of greatest opportunity arrives.

Which club has it right?

It’s impossible to say right now, but what the Hull accounts do highlight is the cost of ‘ambition’ is in the Championship.

Ask Sunderland to follow a heavier spending model – and remember Hull are not throwing huge sums at it – and you’re also more than likely asking for them to take the same gamble with £400,000 per week losses and a wage bill that soars far beyond the club’s ability to sustain it.

That is just the reality of finances in the Championship. Generally speaking, fans overestimate the income potential and underestimate the costs, but Hull certainly provide a real reality check.