A very modern takeover

April 1, 2021

The recent buy-out of Sunderland AFC may have taken several months to complete, but parties involved in the negotiations had extenuating circumstances to contend with, not least the global pandemic, which left them stranded and unable to meet in person. Despite the difficulties, the complex deal has now gone through and Kyril Louis-Dreyfus and his team have already started work. As it prepares to reopen its gates to fans, Colin Young examines the deal that could transform the club, and the region.

Kyril Louis-Dreyfus’ takeover of Sunderland AFC was achieved via Zoom calls over six painstaking months.

Seller Stewart Donald first met the ambitious young Swiss football fanatic online in June last year.

The deal was negotiated, signed, sealed and delivered virtually through an endless stream of rectangular on- screen boxes by Christmas, without the main protagonists meeting in person.

Eager to accept defeat on every level as Sunderland’s saviour, Donald and co-directors, one-time journalist Charlie Methven and Juan Sartori, a businessman and politician from Uruguay, persevered with the pandemic-inspired restrictions to seal a deal with English football’s youngest owner, which looks certain to transform the club and repair and reignite its relationship with the city.

The then 23-year-old prospective owner, who calls himself KLD, joined the calls from the south of France and their team of advisers. Steve Davison, an engineering consultant – and life long Sunderland fan – in his 60s based in Cheshire got involved as the deal drew to a conclusion to prepare plans once the takeover completed.

An exclusivity deal was agreed within weeks.

“The takeover did drag on for a long time,” Steve tells North East Times.

“But there were quite a few reasons why, and the most significant one is obviously the pandemic. It was literally a deal that was done on Zoom.

“They can be quite complex to conclude anyway, but there were three separate owners for a start, and we couldn’t meet in person, so everything had to be done online.

“Kyril didn’t meet Stewart until a few weeks ago at the game at Northampton.

“In fact, they never met in person during the whole time we were negotiating and until after the deal was concluded, which is a bit bizarre. But that sums up what we were dealing with.

“It is to everybody’s credit that we actually managed to conclude a deal. It’s not the easiest environment in which to try and buy a football club.”

Steve is now firmly ensconced in a new role as Sunderland’s chief operating officer, working alongside his new boss, who has moved to the area, and sporting director Kristjaan Speakman, recently recruited from a successful stint with Birmingham City.

The trio, he says, are methodically assessing the entire business, implementing and devising plans in preparation for the return of supporters.

The Stadium of Light has been closed to fans for more than a year now and even with a billionaire benefactor, the prospect of another year of emptiness is bleak.

Steve explains: “If you’re buying a business, and the football club is a business, and it has no revenue, then there are only uncertainties associated with actually trying to run an operational business with no revenue and no certainty of when that’s going to end.

“Those uncertainties caused some issues in the negotiations in terms of how you go about valuing the business and what the future revenues might look like.

“You don’t really know what it’s going to look like when we do finally have supporters back in the stadium – and there’s still some uncertainty even today about when that will be.

“Of course, the deal then gets announced, and you have EFL processes to go through, which are onerous now in terms of the checks with new owners and the fit and proper person tests and other tests
you go through.”

Selling was always the intention of Donald, the former owner of Bridle Insurance and Eastleigh FC, who had been seeking investment or a new buyer since he took over from Ellis Short in April 2018.

COVID-19, two painful failed attempts to return to the EFL Championship and the erosion of the fragile relationship with fans, forced his hand last summer.

Donald, who has maintained a small stake with fellow directors, wanted £37.6 million and the talks were additionally complicated by a £9 million loan taken out from US investors FPP, which was secured against the Stadium of Light and Academy of Light.

Defaulting on repayments would have handed control to FPP, a company established by American billionaires Glenn Fuhrman, John Phelan and Robert Platek, who have links to computer mogul Michael Dell. The sale of shares in Sunderland required approval from them, or the loan to be paid back in full.

It was originally hoped that Sartori would be tempted to make significant contributions to the Sunderland cause and there were initial hints of interest from the man who owned 20 per cent of the company.

But when Sunderland lost at Wembley in the League One play-off final to Charlton Athletic, Sartori’s interest seemed to dwindle just as he concentrated on personal political ambitions in Uruguay. Although he missed out on becoming president, following defeat to Luis Lacalle Pou, Sartori became a senator.

Before surrendering his Sunderland season ticket, Sartori at least made one final, all-important contribution.

He introduced Louis-Dreyfus, thanks mainly to his Russian father-in-law Dmitry Rybolovlev, who owns Monaco Football Club, the great rivals of Marseille, and the club once owned by Kyril’s father Robert.

Whether as a fan at the club’s famous Velodrome stadium, or intern at the training ground named after his father, Marseille was where Kyril was first bitten by the football bug.

I first met Kyril on a Zoom call around September time (when I met him and his brother) and I think it was an interview, at least I think he was interviewing me.

“But I was also doing my own due diligence on him because obviously if I was going to associate my passion for the club and put my trust in someone then I really wanted to make sure they were the right owners.

“We had this conversation, and it soon became clear we were going to work together and although we didn’t formalise a contract until a lot later, I effectively worked with him during the run-up to the takeover and got a contract at the start of January.

“As everybody knows, his family were heavily involved in Marseille, so he has football experience and cares passionately about football.

“He loves football, and you can see that when you spend any time with him. His enthusiasm for the game is unbounded, which is really great.

“You can imagine they have had lots of opportunities to buy football clubs and I think he made his mind up that football was something he wanted to make his career in and he’s looked at a number of clubs.

“But he clearly decided that Sunderland is the one that gives him the best opportunity to succeed.

“He did a lot of research around Sunderland and consulted with a lot of eminent people in football before making the decision.

“This is not something that’s on a whim – this is a really considered opinion this is the right club, and he can take us all the way to the higher echelons of the Premier League.

“That is basically what the plan is all about.

“We all know that is a long-term plan. It’s not going to happen overnight. But he’s in it for the long term.

“He’s based himself here with his fiancee – which was a challenge with a pandemic – and working at the club for many days a week.

“He’s very hands-on, very enthusiastic, and wants to see progress.

“He’s desperate for improvement but has a good balance between pragmatism and impatience.

“And, of course, we have Kristjaan too, and we are quite aligned now in our thought process, which is not to say we don’t have good debates, but that has been a real positive.”

The takeover was finally announced on Christmas Eve 2020 and KLD has been at every match since, even enticing his fiancee to windy Wearside or a night in Accrington.

The owner and his two deputies Speakman and Davison hold weekly meetings in the Black Cat House offices at the stadium, or the Academy of Light the club’s two bases which are still fit for the top flight.

Steve says: “Just prior to EFL approval and before Kyril physically took over, I came to work here and there was a fair amount of nervousness among the staff about me joining and what the plans of the new regime were.

“I quickly learned how destabilising the last six or seven years have been for all staff.

“They had periods of uncertainty, various activities and instability at boardroom level.

“It was about to go out for sale, was up for sale or about to be sold – that is not an environment conducive to long-term planning or stability.

“We’re trying to re-engage, not just with the whole community, but with staff to make sure everybody can appreciate we’re in this for the long haul.

“That sort of trust will come but it won’t happen overnight. We know we have to earn their respect.”

Under new manager Lee Johnson, a young, progressive coach who had a solid track record at Bristol City, Sunderland have already started to turn the corner.

A recent re-tweaking of the EFL wage cap rules suits Sunderland’s new financial power and has neatly coincided with the new arrivals, who have inherited numerous players out of contract this summer.

Perhaps most significantly, they finally won at Wembley within weeks of the deal’s completion, ending a 48-year, eight-game run at the home of football.

Steve adds: “It was a wonderful day, a fantastic win for the club and amazing to be there.

“But it was quite upsetting and humbling for me too.

“As soon as the final whistle went, there was also a real sadness because our fans could not actually be there after so many years, so many sacrifices and defeats.

“You could say it was typical Sunderland.”

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