Where we stand now on the Sunderland takeover - and how will it affect the new manager search?

Chronicle Live Sports 1 month ago

As Sunderland begin their search for a new manager, uncertainty still surrounds the potential takeover of Sunderland AFC.

Three US investors have been in negotiations to buy a majority stake in the club from chairman Stewart Donald.

But reports on Tuesday just before the Black Cats sacked Jack Ross suggested that the takeover had collapsed. Donald has denied those claims.

There's a lot shrouded in uncertainty with the Stadium of Light club right now, but as best as possible we try to sum up what's going on and what comes next.

What we know so far

John Phelan, Glenn Fuhrman and Rob Platek - three US investors who handle Michael Dell's assets and work together at investment firm MSD Partners - have been in negotiations with Stewart Donald to buy the club.

They have been looking to buy an English football club for some time and were turned on to the idea of Sunderland after watching the Netflix documentary.

Dell, the 25th richest man in the world according to the last Forbes rich list, is involved, but not to the extent that many Sunderland fans believe. Described from the start as a 'passive, minority investor', his involvement is expected to be minimal.

MSD Partners: From L to R: Rob Platek, John Phelan and Glenn Fuhrman
MSD Partners: From L to R: Rob Platek, John Phelan and Glenn Fuhrman

That's nothing to be concerned about, however. The trio who are involved have more than enough money to take Sunderland back to the Premier League if a takeover is complete.

Phelan and Platek attended the club's win over AFC Wimbledon in August and the third, Fuhrman, was due to be at the Burton game in September, only for it to be postponed due to international call-ups.

In preparation for the potential takeover, the trio have already set up a company with Companies House in Cardiff in which they list themselves as directors. This is the company that will be used to buy the club should a deal eventually go ahead.

So where are we now after the reports it had collapsed?

The Sun reported on Tuesday that it collapsed over Stewart Donald's valuation of the club.

The chairman has denied that, but says he can't say too much because investment talks remain ongoing. So we do know that any deal isn't dead completely, although some of Donald's words were carefully chosen.

Non-disclosure agreements will be in place meaning he can't say too much, but Donald hasn't specifically named the trio when saying investment talks remain ongoing. It could be that Donald is actually talking to another person or persons over investment, or it could simply be a ploy to encourage the US trio to get moving. We do know there has been interest from other individuals and groups, but the US trio have been the most serious of those.

Donald hopes to update everyone as soon as possible, noting that the weekend might be a possible time he can do so. That would suggest we'll know one way or another if a deal is going ahead or not soon.

What are the chances of a takeover now?

Right now, it's looking a lot less likely than it was a few weeks ago, but that's not to say it definitely won't happen.

Without being privy to negotiations, it appears that something has likely cropped up that has unsettled the trio, but what that is would be impossible to guess, and wrong to speculate on.

What we know is that the trio are stringent businessmen. They specialise in investment, and will look at every finer detail of the club, its accounts and its future strategy.

What's interesting is that initially sources close to both parties were highly confident on this deal and were even bandying dates around about when the whole thing would be complete, to no avail so far.

John Phelan (right) and Robert Platek (back row, left) of MSD Partners at the Stadium of Light
John Phelan (right) and Robert Platek (back row, left) of MSD Partners at the Stadium of Light

Recently, Donald rated the chances of it happening as better than 50/50, but his response to yesterday's reports sounded less than convincing, albeit while limited in what he could say.

Unlike earlier in the process, sources on both sides have recently become a lot more close-guarded and silent on the deal. That could be a good thing with the non-disclosure in place and a deal potentially close, with neither wanting to say anything that jeopardizes the talks. Or, alternatively, it could be a sign that something has soured and this now isn't looking so likely.

Again, it's pure conjecture right now, but we can't absolutely rule out that Donald is now speaking to another individual or group separate to the American trio.

The uncertainty doesn't help, with many wild theories floating around on social media with supporters. The quicker this is sorted either way, and attentions can turn fully back to matters on the pitch, the better.

What state would the club be in financially if the deal falls through?

Purely a hypothetical scenario right now, but if it were to fall through in the short-term Sunderland should be fine.

In the past 18 months Donald and co. have worked tirelessly to bring costs down at the club and make it more sustainable. Fans would of course love to see the club splash millions on building a super-squad, but the reality is, trying such methods in the past is what ultimately led to the club's dramatic drop to League One.

Sunderland owner Stewart Donald
Sunderland owner Stewart Donald

Donald's mission has been to run the club in a sustainable manner and so why we won't see millions spent on new players, there is more than enough money available to build a squad capable of gaining promotion from League One. There's a bit of a false fallacy right now that Sunderland don't have a big League One budget. They do, when you factor in wages. They'll be outspending just about every, if not all, League One clubs on player wages this season, even after trimming a number of their high-earners this summer. Yes, only one summer signing actually required a transfer fee, but that is quite common at this level. Donald has enough money to run this club at League One level, but his investment of that money must be in a controlled way, rather then spending beyond their means.

There's very little money in League One, and in some respects being a club of Sunderland's stature, with it's facilities, can be debilitating because the running costs are so high.

The search for investment has always been about later down the line, if/when the club make it to Championship. To compete in the second tier now, far more money is needed.

Fans might point to the state of the squad right now but it has enough quality in it to be doing better than it currently is. Finances aren't the issue, recruitment, you could argue has been. That's still an area of the club that needs to be improved, but Donald revealed recently that he's just invested £500k on a new scouting team, with talent spotters now in Scandinavia, Germany, Ireland and the UK on behalf of the club.

Will the takeover affect the search for a new manager at all?

In theory it shouldn't. If the MSD Partners do end up completing a takeover then their plan is to have Donald continue in his role with the day-to-day running of the football club. It's been something Donald has tried to include in negotiations with any group showing interest.

So in theory, any new manager should come in knowing that the man picking them now will still be the man in charge after any takeover.

The truth, however, is that it will almost certainly be on the mind of any potential applicant for the job. Even if Donald is expected to stay now, what if a few months after the takeover he's gone? What if the takeover is complete and the new investors disagree with Donald and overrule his decision?

They're all possibilities, but they're also concerns that Donald should be able to quash when he gets to the point of selling the club to the man he chooses.

Tags: Football

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