The inside story on FPP Sunderland's loan to Madrox and what next for the Black Cats
It has been another seismic week on Wearside, with concerning results on the pitch and major developments off it.
So exactly where do Sunderland stand and what are the key questions unanswered at the moment?
What we’ve learned about the FPP deal
Both Stewart Donald and Charlie Methven have now spoken at length regarding the FPP deal, and though some key details remain unanswered, the shape of how that money will be used has been made clear.
Both have referenced recruitment, the academy, and infrastructure projects around the club’s key facilities.
This, it has been said, includes everything from lifts at the Academy of Light to what Donald said is a £500,000 project to maintain the roof at the Stadium of Light.
There have already been some signs of this deal beginning to take hold.
Both Donald and Methven have discussed the implementation of a scouting network that will report in to Tony Coton, with former Aston Villa scout Janne Wilkman the first publicly-named addition to the network, leading the club’s Nordic operation.
Further full-time appointments are expected and there will be part-time scouts feeding in to that network.
Elsewhere, Phil Parkinson has also pointed to the arrival of Nick Allamby as physical performance coach as a sign of key departments being ‘built back up’ after the cuts that followed the consecutive relegations.
The funds will also be key at academy level as the club seeks to maintain its category one status. There has been a pledge for more recruitment and investment in the U18 and U23 age groups, where the club is struggling on the field this season. Methven and Academy Director Paul Reid have bemoaned the club’s vulnerability to losing talent to top Premier League academies and the modest renumeration that brings, the former telling the Echo that he wants this injection to help incentivise those players to stay.
Companies House documents have confirmed a £10 million injection into the club, with FPP investing into Madrox, the holding company owned by Donald, Methven & Juan Sartori.
If it is not repaid, FPP takes control of Madrox and therefore the football club and all of its assets, including the SoL and the AoL.
What we still don’t know
Much remains unclear about the deal struck between Sunderland’s current owners and the FPP group.
The terms of the repayment are, Donald said, confidential, as is the timescale in which that repayment has to take place.
It is also not known whether there will be interest and with that in mind, even more important is exactly how the money will be repaid by Madrox.
The long-term plans and aspirations of the FPP group are yet to be publicly stated by the group, with Donald seeking to try and clear that up in his radio interview earlier this week.
He insisted that they saw the partnership as a long-term, 10 to 20 year project, and that their interest in investing not just in the club, but the wider city and region, was why he had done this deal, rather than leaning on his own funds, or Juan Sartori’s, to complete the projects the FPP cash will fund.
Why they backed out of taking a controlling stake as initially expected in favour of this more limited involvement is, Donald said, a ‘private matter for them’.
He said they did not want to control the day-to-day running of the club, and that is consistent with much of their investment portfolio.
Their interest and involvement in Sunderland has been welcomed by supporters, and given their long-standing interest in investing in European football, there is significant they have long-term interest in the club’s success and rise through the divisions.
Public clarity of that would be welcome, with the group so far declining to comment beyond backing an initial club statement released in the aftermath of the deal.
That said: “FPP Sunderland Limited is backing the current management of Sunderland AFC through a significant investment it has made in the club's holding company, Madrox Partners Ltd.
“With the completion of the new investment, Mr Stewart Donald remains the majority and controlling shareholder of Madrox Partners. Other terms of the investment are not being disclosed.
“The new investment is consistent with Mr Donald's intention to attract additional financial resources to support the second phase of his plan to regenerate the club, including investing in the club's academy, recruitment structure, stadium infrastructure and fan experience."
Donald has said that the only people who could lose from this deal were himself, Methven and Sartori.
If they were to default on the repayment, they would lose all their investment in the club, with FPP taking the assets. It is, therefore, lose-lose only for them, and not the club or its supporters.
That is true only if FPP’s long-term goal is the progression of the football club.
Donald insisted on more than one occasion that this was moot regardless. He would not default on the loan and both he and Sartori can cover it.
Crucially, he said that he ‘expected’ that future discussions over a full takeover would likely be possible.
How that relationship develops is key and it is also clear that is indeed very much related to Sunderland AFC, not just FPP and Madrox.
Indeed, it is fair to say that the relationship between those two parties will define the success of the football club for the next decade and beyond. Fan’s interest and demand for clarity is more than justified.
Where Juan Sartori stands
FPP’s investment into the club raised obvious questions regarding Juan Sartori’s commitment to the club, both financially and in terms of his day-to-day contribution.
Sartori’s purchased a 20% stake in the club last autumn, with Donald saying that his connections in the European game would help the club go to the next level in the long term.
His father-in-law is Dmitry Rybolovlev, President of AS Monaco FC.
There were also suggestions that Sartori could help bring exciting South American talent to the club’s academy.
He was a visible, energetic presence at the Stadium of Light in the early weeks of the season, singing with fans in the Roker End during a 3-0 win over Scunthorpe United.
That began to change at the turn of the year as he launched his political career in Uruguay, his appearances in the UK more sporadic.
Though he was unsuccessful in his bid to win the presidential nomination for his National Party, FPP’s arrival coincided with his election as senator.
That will require him to spend a certain amount of time in Uruguay, but Charlie Methven has insisted that he remains in regular contact with both himself and Donald.
Methven also told the Echo that he would be a more visible presence on Wearside moving forward. Thus far, he has attended one game this season, the 1-1 draw with Oxford United on the opening day.
Donald has said that Sartori had offered to invest the funds required for the upcoming projects that the FPP’s injection will fund, but that the pair felt bringing the American’s into the fold would be the best for the long term development of both the club and the region.
Where that leaves Sartori, particularly in the light of his recent election, and the longer-term plans touted when he took a shareholding, remains to be seen.
The structural issues still to be resolved
The wider structure of the club remains a key issue and one that fans will be interested to watch develop over the coming months.
In a recent interview with the Echo, Methven rejected the idea that a Chief Executive would improve the day-to-day running of the club.
He said it made more sense, as most of the top clubs in the country do, to separate the commercial and footballing operations of the club.
That means, for example, a managing director on the commercial side and a technical or sporting director on the football side.
As it stands, Sunderland have neither.
Tony Davison left his post as managing director last month and has not yet been replaced.
On the footballing side, Richard Hill has the title of head of football operations but is has been said that his primary remit is with negotiations, rather than in the identification of players.
He did, however, play a role in the managerial search following the departure of Jack Ross, while Methven has also credited him in a role with laying the groundwork for the new scouting network.
Coton will now take charge of that scouting network and will therefore work closely with Phil Parkinson, who has already passed on his primary goals for the upcoming January window.
A figure to knit this all together and drive the club’s longer-term footballing strategy is not in place.
Donald says there is a structure and a plan for growth that has impressed the Americans and secured their involvement.
It remains to be seen how that takes shape, and whether it will include some fresh voices in the club and more day-to-day presence on Wearside.
What we know about plans for a critical January window
Speaking on Wednesday night, Donald said he would back Parkinson in what looks set to be a vital month.
“Having spoken to the manager and got his initial assessment of the squad, there’s no doubt he’s going to want to strengthen the squad,” he said.
“He sees some positives but also some things that we need to address.
“We’ll do what’s needed.”
Parkinson has begun working with Coton on his demands for the window, and his priority is likely to be increased athleticism and power throughout the squad, but particularly in the final third.
The capacity Sunderland have to do that, and to what extent it will necessitate some players leaving the club, is the central question.
So too, is whether the process can function more effectively than last January, Donald defending his investment but accepting that the end results fell short of what was required.
That January window of 2018 is a good place to start in reflecting on where Sunderland are and what comes next.
Ultimately, it ended in the Chairman backing his manager significantly and landing his number one target. Yet it left the manager frustrated about the club’s structure and that carried into the summer window any beyond, exacerbated by the major question marks over who would own the club.
Will Grigg was the striker Ross wanted, the manager open in his admiration for his goalscoring record at League One level and also the attributes he felt he could bring to the side in open play. He had not wanted to lose Josh Maja and felt a better solution of all parties could have been found had it been planned for further in advance, but Grigg was the best possible alternative.
What rankled was discovering at the 11th hour that the club's financial parameters in the market were suddenly markedly different.
That defined his frustrations at the club, a lack of clarity over budget and the model the club were pursuing.
The investment in recruitment structures is a belated recognition of some of the shortcomings Ross was working against.
Some key questions surrounding FPP’s arrival remain unanswered, but Donald has been insistent that it is down to him to deliver success and lay the groundwork for a successful long-term partnership between the two.
“We have gone to these guys because we believe that for the long term benefit of the football club, they are going to be really, really good, if we can show them we know what we’re doing,” he said.
“That’s the big thing isn’t it and if the jury is out [on us], then the jury is out.
“We have got to prove to everyone we can do it right and if we don’t, we are the only ones who lose.”
He has made one key decision to this end, replacing Ross with Parkinson. The results have been mixed so far but most would acknowledge that it is early days and some big games, and big opportunities, are on the horizon in the league.
The club's issues clearly go beyond the dug-out, however, and recent results are a reflection of that.
How Donald goes about addressing these, particularly the changes made in crucial departments where the club looks to be lacking day-to-day leadership, will be just as vital as the work on the training ground and in the January window, certain to define how this challenging season ends.