And the walls came tumbling down.
Kyril Louis-Dreyfus, as revealed by The Athletic on Tuesday, owns just 41 per cent of Sunderland AFC. With that admission comes the uncomfortable truth that we were, knowingly or otherwise but almost certainly the former, misled by our football club. Again.
Today marks one year since Louis-Dreyfus officially took the reins on Wearside. It took him and the club 362 days to tell us that, actually, that thing they called a ‘takeover’ was something rather less clear-cut.
I was misled and so were you. So was whoever sits to your right at the Stadium of Light. And to your left. And behind and in front and all around the ground. They were misled just as those who follow from afar were, those who spend countless hours and pounds and pence following their club and believed that, this time, finally, it was different.
Some will doubtless point to the fact no lies were told. The wording upon Louis-Dreyfus’ arrival at the club was sufficiently woolly that its meaning can be twisted and bent according to the reader’s will. At no point did anyone, at least officially, claim he had obtained over 50 per cent of the club’s shares.
Yet they’d be telling a significant lie – or showing bewildering naivety – if they were to claim fans were aware back then of what we now know to be true. There is no chance on this earth anyone can claim with any real basis that, when the ‘takeover’ of the club was announced, fans were fully aware the scourge we know collectively as Madrox Partners had retained a 59 per cent stake in our club.
As always when it comes to the primary individuals involved in this tale, there is an awful lot to unpack now. The easiest way to summarise is to call it what it is: a mess.
In fairness, that was obvious already to anyone who refused to don rose-tinted glasses. Sunderland’s ‘ownership group’ (another phrase that will now enter the shameful lexicon of the worst period in the club’s history) is comprised of individuals with wildly different priorities, strategies and capabilities.
The waters are muddied yet further by shifting allegiances. Who does Juan Sartori support? Does Louis-Dreyfus actually want Charlie Methven out of the picture, or does he find him useful? If any shareholder is now likely to be isolated, it’s likely to be Stewart Donald. Is that a sufficient departure from the past?
We were led to believe the forward-thinking and apparently well-funded tranche of the ‘ownership group’ was firmly in the driving seat. Now it transpires the opposite is true, at least when it comes to funding the club. A group of three people who, to be frank, drove this club to near oblivion, have effectively been bailed out.
Worse, they have retained collective majority ownership, continue to attend games and, if reputable sources are to be believed, some of them remain heavily involved within the club itself. Certainly, back when the Louis-Dreyfus ‘takeover’ was first mooted, Methven was seeking an active role in proceedings. Events of recent weeks are difficult to square with the idea he is fully out of the picture.
How this all came to pass should be one of the many questions now asked. On 11 December 2020, 13 days before the club’s website announced a sale of shares had been agreed, the Daily Mail reported Stewart Donald had warned fellow chairmen Sunderland were at risk of administration if EFL funding were not forthcoming. At that same time, the club was known to be entertaining the notion of dipping into a pot of EFL money that would have restricted transfer activity in future years.
The clock was very much ticking. By the end of July 2020, our club had just £7.4m in cash to its name. This was despite being in receipt of £9m from FPP Sunderland – a sum Donald had been at pains to tell us could be “repaid easily” whenever he and his business partners chose to. Bear in mind the £7.4m also included cash from (hefty) season ticket revenues and the sales of youngsters like Bali Mumba, Logan Pye and Joe Hugill and one thing becomes abundantly clear: Madrox were dipping heavily into a loan that, were it not able to be paid back, would see Sunderland AFC taken from them by force.
How then did we arrive at a situation where Madrox not only managed to sell a minority stake in the club for a value they deemed acceptable, but retained a majority of shares and, by extension, influence over club affairs?
Some, the club included, will take issue with the latter point. Per The Athletic, they believe ‘the details [of the share split] have no impact on the day-to-day operations’. How can it be said the share splits have no bearing on the day-to-day of the club when the very same club is reliant on owner funding to survive? How can the club dismiss the relevance of a 59 per cent shareholding when Steve Davison told the Supporter Collective last year that some ‘decisions require shareholder agreement’?
It would be wildly optimistic to have expected Louis-Dreyfus to cover 100 per cent of the cost while only being due 41 per cent of the reward. Given what came out in The Athletic on Wednesday, it appears that isn’t the way things are structured anyway.
Per a spokesman for Stewart Donald (and yes, we’re best off taking whatever they say with a barrel-load of salt), there is now a ‘pro-rata funding commitment’ in place. That’s good business sense for a shareholder worried about whether his fellow shareholders will pony up, but if they don’t and he’s unable to squeeze them out – and it’s now increasingly unlikely Louis-Dreyfus can – then it’s going to massively hamstring our football club.
Peel back the curtain and you’ll see it already has. The scandalous state of the Stadium of Light pitch is a case in point, the damage well and truly done before they finally did something about it last week. The ticket office and club shop situations speak for themselves, as does returning staff to furlough last year.
Arguments over funding hindered the club’s transfer activity in the summer, apparently causing at least one deal to collapse after a fee had been agreed. Meanwhile the much-vaunted and welcome data revolution looks to be suffering from insufficient backing. A source close to the now departed Lee Johnson suggests the former manager was frustrated that, below the ‘icing on the cake’ aspects of the data approach, the club hadn’t recruited enough analysts to ensure the new project had the best chance of success.
All of the above and more is why the idea Louis-Dreyfus has ‘full control’ is a worry one way or the other. If it’s true (and agreeing it is relies on an interesting interpretation of the word ‘full’) then the blame for the shambles that has unfolded in the last month must lie at his feet. If it’s not wholly accurate, then the club are once again taking supporters for a ride. Pick your poison. Neither option is desirable.
The club’s and Louis-Dreyfus’ counter to all of this is that he is the final decision-maker, and Sunderland AFC is being moulded according to his will. That looks to be true. Certainly the new recruitment strategy is a world away from what came before. Plenty of promising signs are there. Yet there remains a stench of the past, a boil still to be lanced. And, in case you’ve missed it, our chances of automatic promotion have all but disappeared.
There will be, and already have been, calls for Madrox to sell up in entirety to Louis-Dreyfus and his (still not properly disclosed) entourage. That is understandable. We are desperate for Madrox to depart; it is easy to assume the best buyer is the individual who has already got his foot in the door.
But is that so? For plenty, this sorry episode will have damned Louis-Dreyfus too. He is enormously complicit in what has unfolded here. He has not just stayed quiet but, at times, actively encouraged the myth people bought into.
Inside a week of his chairmanship, he sat in front of club cameras and bemoaned “asset stripping”. He sent out letters to fans proclaiming a fresh start and sold in excess of 23,000 season tickets – at increased prices – under the same premise. In that same letter he thanked people for their patience during the lengthy ‘takeover process’. When offered the chance to head this scandal off in November, he refused. After an effective ‘no comment’ clearly wasn’t going to cut it, he cited “confidentiality clauses” that have now disappeared almost as quickly as they publicly arose.
Those who continue to whimper that nobody lied miss the point entirely. Louis-Dreyfus and those at the top of the club knowingly perpetuated a myth. They talked of a ‘takeover’ and a ‘new dawn’ and left a pretty big detail out. They knew what fans thought and they knew they were misleading them.
It would be easy to just lump Louis-Dreyfus in with the others. He is plainly not the same. There are orders of magnitude to these things and he still has some way to go before catching his three partners in that regard.
Yet the grave error he and his advisors made was to not appreciate a fact any fan of this club could have told them a year ago. Patience and trust are all but worn out here. Supporters have been misled for years, their loyalty exploited, mocked, then exploited again. Fandom is an incredibly malleable resource for football clubs, but once it is lost it might well be gone for good. Many Sunderland fans are approaching that nadir with increasing pace.
What happens now? That is a difficult question to answer but as the dust has begun to settle on Tuesday’s bombshell, it has become clear Louis-Dreyfus has only two realistic options in front of him. Buy them out or sell up himself.
Assuming the latter isn’t a choice he’s looking to entertain, buying out Madrox must now assume top priority. Their toxicity has tarnished his own reputation here. If he didn’t know before the depth of ill-feeling toward them, he surely does now. This football club simply cannot progress while the likes of Donald and Methven (and yes, Sartori should be included here too) linger in any form. It is all well and good claiming they are just waiting to cash their chips; when they retain control over the purse strings it is impossible to argue they have no influence on our football club’s fortunes.
Since Tuesday the narrative has moved onto such a share sale. Donald and Methven are apparently happy to sell, and it’s grabbed the headlines as a result. But it isn’t news. They’ve been trying to sell for three years. The problem is the valuation, and how out of kilter it is with a club losing millions a year with potentially worse to come.
Louis-Dreyfus did not attend Wednesday’s Supporter Collective meeting, but has committed to speaking with fans inside the coming week. That is better than hiding away but not worthy of too much praise. He promised “openness and transparency” but has delivered not very much of either.
Plenty of words will be spoken during that meeting. Whether they matter anymore is hard to say, though an apology should be forthcoming.
Otherwise, fans of this club are long tired of words and platitudes. Trust has been eroded, again. Actions matter far more. And, for Kyril Louis-Dreyfus, there’s only one that can fix this now.