(Bloomberg) -- Sunderland AFC’s owners are targeting a valuation of as much as 40 million pounds ($52 million) as they seek a buyer for the U.K. soccer team, people with knowledge of the matter said.
Insurance entrepreneur Stewart Donald and his partners have been holding serious discussions with at least two suitors, the people said, asking not to be identified because the information is private. They hope to identify an acquirer as soon as the end of February, according to one of the people.
Sunderland’s backers argue that the team could be worth as much as 250 million pounds in the future if it regains entry into the financially lucrative Premier League, which would require it to win two promotions, the person said. Teams playing in the top tier of English soccer can bring in at least 100 million pounds in broadcast revenue annually.
Buyers may be attracted to the passionate fan base of Sunderland, which plays in the 49,000-seat “Stadium of Light” at its home in England’s industrial northeast. The team’s travails have been the subject of two Netflix Inc. miniseries, the latest of which will be released in the coming months.
Fan Backlash
Sunderland said at the beginning of January it has started a process to sell the team, just days after a fan backlash against Donald. The team’s neighbor and biggest rival, Premier League club Newcastle United, is in talks to be taken over by a Saudi Arabia-led investor group for about 340 million pounds, a person with knowledge of the matter said last month.
The Sunderland owners may not be able to achieve the valuation they’re seeking, and there’s no certainty the negotiations will lead to an agreement, the people said. A representative for Sunderland didn’t immediately respond to emailed queries.
Donald teamed up with two other investors, Charlie Methven and Juan Sartori, to buy Sunderland from U.S. businessman Ellis Short in 2018.
Historic Teams
Sunderland’s pretax loss widened to 19.9 million pounds in the 12 months through July 2018, from a loss of 10.3 million pounds a year earlier, according to U.K. corporate filings. Its revenue fell 48% to 63.7 million pounds after the team fell from the Premier League.
Historic teams with large fanbases do not often change hands in English soccer. The last change in ownership of such a storied club came in July 2018, when Egyptian billionaire Nassef Sawiris and Fortress Investment Group cofounder Wes Edens acquired a majority stake in Birmingham-based Aston Villa.
The potential for English soccer teams to fetch big-ticket valuations was highlighted in November last year, when U.S. private equity group Silver Lake bought just over 10% of Manchester City for $500 million.
(Updates with other team takeovers in last two paragraphs)
To contact the reporter on this story: David Hellier in London at dhellier@bloomberg.net
To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Matthew Monks
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2020-02-05 08:58:00Z
https://finance.yahoo.com/news/sunderland-owners-seek-52-million-085812885.html
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