Rich List: What impact would relegation have on the fortunes of Sunderland owner Ellis Short and Newcastle’s Mike Ashley?

Sunderland owner and chairman Ellis Short
Sunderland owner and chairman Ellis Short

Sunderland and Newcastle United may be battling at the wrong end of the Premier League table but their owners are competing at the top end when it comes to finances.

The annual Sunday Times Rich List is out and Newcastle owner Mike Ashley tops the North East pile with a personal fortune of £2.43billion.

Lee Charnley and Mike Ashley

Lee Charnley and Mike Ashley

Ashley, who also owns Sports Direct, has actually seen his fortune fall by more than £1bn in one year according to the Rich List 2016 – the definitive guide to wealth in Britain and Ireland.

But the 51-year-old remains the richest man in the region.

Shares at his Sports Direct business have almost halved in value since December, leaving Ashley’s stake worth £1.25billion but he has - at least - transformed Newcastle into a profitable club.

Newcastle United posted a profit of more than £32m last season and had almost £50m in the bank at the end of the campaign.

Meanwhile, Sunderland AFC owner Ellis Short has seen his wealth grow by £200m in the past 12 months to £1.2billion.

Through his London-based Kildare Partners private equity operation, 55-year-old Short raised nearly £1.4billion to invest in distressed property in 2014.

With both clubs battling the drop as the season reaches a climax, how would relegation impact the clubs and owners?

At Sunderland, a whopping £70million of the (roughly) £100m annual turnover is allotted to salaries.

That sum puts Sunderland’s wage bill among the top 10 in the country – more than Southampton, Leicester, Swansea and West Ham.

At least every Sunderland player has a 40 per cent wage reduction built into their contract in the case of relegation - unlike Newcastle.

It has been compulsory club policy ever since Sunderland returned to the Premier League in 2007.

Clearly, relegation to the second tier would be disastrous for both Sunderland and Newcastle United, with both clubs also missing out on the bumper £100million television deal.

But the impact on the individual fortunes of Short and Ashley remains to be seen.

Sunderland reporter Chris Young has looked in-depth at the financial implications.

Chris wrote: “If Sunderland miss out on the £100million annual bounty from the new television deal, then the financial reality of life in the Championship is stark.

“For starters, their income from TV money would instantly be reduced to around £2m a year.

“Under the new arrangements for parachute payments, Sunderland would receive around £90m over a three-year period.

“That’s not a great deal more than the income currently banked from television cash in a solitary season.

“The club’s stand-out figures would have to be sold, while the unsavoury side of relegation is that non-playing staff invariably lose their jobs.

“There is never any fairness when players banking £30,000 a week are kept on, while those barely earning that in a year face redundancy, but it’s a sad reality.

“Sunderland were beginning to consider those deemed dispensable two years ago and Aston Villa similarly announced that there will be job losses stemming from their relegation.

“Don’t forget that the Black Cats continue to post hefty annual deficits too.

“There has been a reliance on Ellis Short’s pocket for years to bankroll Sunderland’s spending in the transfer market and that would have to remain the case in the Championship.”

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Meanwhile, Newcastle United writer Miles Starforth wrote a piece recently saying the club’s money-making has come at a HUGE cost – and Newcastle could pay dearly for failure.

Miles wrote: “The club has spent almost £80million on players in the last two transfer windows.

“And there has been a “significant” increase in the wage bill, according to Newcastle.

“Yet that spend – the first part of which didn’t touch the sides at st James’s Park after years of under-investment – has not bought results.

“United might be rich in terms of finances, but the club has been impoverished on the pitch.

“The team lacks leadership and the squad lacks depth and quality in key areas.

“And players who should have been sold or paid off years ago are still on the books.

“Committed, hard-working players have been discarded, and the club hasn’t learnt from transfer-market mistakes.

“Hindsight can’t be used as an excuse. Enough people have point out the club’s shortcomings enough times.

“This has been coming.

“And if ever there was a season NOT to be relegated from the Premier League, it’s this one.

“A new multi-billion pound TV deals kicks in next season.”

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