Stoke reliant on the Coates family

The authoritative Swiss Ramble has reviewed the recently published 2017/18 accounts for Stoke City, the year that saw them relegated after ten consecutive years in the Premier League. He notes that the club 'has experienced a lot of changes in the last 18 months (players, managers, league status). The financial support of the Coates family will be more important than ever if they want to make a rapid return to the Premier League.'

Since 2009 Stoke have had available cash of £245m: (a) £148m from owners’ loans; (b) £96m from operating activities (negative for the first time in ages in 2018). Almost all of this has been used to improve the squad with £217m (89%) spent on player investment. That said, it is noticeable how Stoke City are once again hugely reliant on the Coates family, as they put in a further £47m in 2018. The funding had been cut to just £2m for the two years 2015 and 2016, but it’s now back with a bang. The owners have put in £148m since 2009.

Following the reduction in revenue, the club's wages to turnover ratio increased from 62% to 74%, which would have been the 3rd highest (worst) in 2016/17 (behind Crystal Palace and Swansea City). To be fair, this is not as bad as the 79% Stoke reported in 2016 – or 91% in 2013. Although Stoke's £94m wage bill is a record high for the club, it was still only the 13th highest in the Premier League. This was around the same level as West Ham’s 2016/17 wages, but £18m lower than Southampton and Crystal Palace.

The average attendance of 29,280 was the 13th highest in the Premier League in 2017/18, around 4,000 more than the next club, Crystal Palace 25,063. Prices for 2018/19 tickets have been frozen, which means that they have been held at the same level for an incredible 11 seasons.

Commercial revenue fell 7% (£1.5m) from £20.1m to £18.6m, mainly due to other operating income. This was mid-table in Premier League. Owner bet365 pays a reported £3.2m for shirt sponsorship and also has stadium naming rights. Macron have a 5-year kit deal from 2016/17.

Revenue was 'derived principally' from the Premier League broadcasting contract. In fact, a massive 79% of their turnover came from TV in 2017/18. In fairness, this is not uncommon in the top tier with nine clubs getting 80-90% of their money from TV. Premier League TV money fell £8m from £107m to £99m, as they were adversely impacted by dropping six league places from 13th to 19th (merit payment down £12m), though partially offset by being shown live three more times (facility fee up £2m) and a £2m increase in overseas payments.

The parachute payment will not compensate for the absence of Premier League TV money. The Swiss Ramble's estimate is a £58m (46%) reduction to £69m.

This is the first time that Stoke have reported a loss in five years, though the highest profit in this period was £5.2m in 2015. In fact, four consecutive years in the black only delivered £16m profits in total, as the club has invested almost all of its spare cash in the squad.

Wolves get raw deal from FFP

I used to see a lifelong Wolves fan for lunch once a month. He was approaching ninety, but still went to games. Sadly he passed away the other week. As football finance guru Kieran Maguire has noted, Wolves continue to be constrained by financial fair play rules. Radio 4 this morning described them as this year's 'crisis club' and the pessimists have certainly been piling in. Martin Samuel wrote sympathetically in the Sunday Times yesterday, saying that the Premier League drives talent away with regulatory red tape: 'Why could Al-Hilal sign Neves? Because Wolves needed the money. And why did Wolves need the money? Because the club had to comply with an artificial construct known as financial fair play. So Wolves are going skint, yes? No. There is no suggestion that Wolves are in financial trouble, only that they are failing to meet the rigours of FFP. Wolves’ owners appear to have the money to run the club, and invest in the club, and in fact came up with a pow

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Charlton takeover approved

The long awaited takeover of Charlton Athletic by SE7 Partners from Thomas Sandgaard has been approved: https://londonnewsonline.co.uk/se7-partners-obtain-efl-approval-for-charlton-athletic-takeover/ Charlton have had unhappy experiences with owners for over a decade, so how this works out will remain to be seen. There is certainly potential there, but will it be realised? This interview with Charlie Methven gives detail not available elsewhere: https://thecharltondossier.com/charlie-methven-on-the-record/

The Political Economy of Football V2

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