Stoke have biggest losses in Championship to date

The authoritative Swiss Ramble has been reviewing the recently published 2019/20 accounts of Stoke City.

The club’s pre-tax loss widened from £15m to £88m, as revenue dropped £21m (29%) from £71m to £50m and profit from player sales fell £15m (83%) from £18m to £3m. Total expenses increased £37m, mainly due to £43m impairment charge (reducing player values). Loss after tax was £86m.

Unsurprisingly, the £88m loss is the highest to date in the 2019/20 Championship, though others have also reported significant losses in 2019/20. Only three Championship clubs made a profit.

Following four consecutive years of (small) profits between 2014 and 2017, Stok have now posted losses three years in a row, adding up to a hefty £134m in total, though it is worth noting that £74m of this is due to player impairment (non-cash) charge

The main reason for the £21m revenue reduction was broadcasting, which dropped £20m (39%) from £51m to £31m, mainly due to lower parachute payment, though match day also fell £1.6m (25%) from £6.4m to £4.8m. In contrast, commercial rose £0.9m (7%) from £12.9m to £13.8m. EThe main driver of the increase in commercial income was sponsorship and advertising, up £2.9m, probably due to a higher payment from owner bet365 for shirt sponsorship and stadium naming rights. Even after the fall, the club’s revenue was one of the highest in the Championship.

If parachute payments were excluded, revenue would fall to £20m (£34m parachute replaced by £4.5m solidarity payment). This would have placed them mid-table in the Championship with the gap to the top club (Leeds £54m) increasing to £34m.

Revenue has dropped £86m (63%) from £136m in 2017 to £50m in 2020, falling three years in a row. The decline is very largely due to £77m less TV money in the Championship, though commercial and match day are also down £6m (31%) and £2m (33%) respectively.

The club estimated a £38m impact from COVID, split between £4m revenue loss, £4m additional costs (e.g. not utilising the furlough scheme) and £30m of the £43m player impairment. Without this, revenue would have been £54m, but the club would still have posted a £50m loss.

Profit from player sales fell from £18m to just £3m, mainly Erik Pieters to Burnley, whereas prior year included the sales of Shaqiri to Liverpool, Sobhi to Huddersfield Town and Muniesa to Girona. Far below WBA £29m, Bristol City £26m, Brentford £25m and Hull City £23m.

have traditionally made very little from player sales – just £4m a year in the 5 years up to 2015. However, in the last 5 years, profit has increased to £62m, though only £3m of that came in 2019/20 and very few profitable sales have been made in 2020/21 either.

The club have spent £224m to bring in new players in the last five seasons, including £67m in the first season following relegation. Sales proceeds have also increased, but net spend has doubled compared to previous 5-year period. Hardly anything spent in 2020/21.

The wage bill fell £3m (6%) from £56m to £53m, which means wages have been cut £42m (44%) in the two years since relegation (revenue down £77m in the same period). This is the club’s lowest wage bill since £47m in 2011. Following the decrease, the £53m wage bill was still one of the highest in the Championship.

Threat of financial calamity removed from Baggies

West Bromwich Albion had effectively been in decline ever since the club was sold to a Chinese consortium in August 2016, paying a figure north of £200m to buy former owner Jeremy Peace’s stake. Controlling shareholder Guochuan Lai’s ownership was fairly disastrous for the club, but his unloved tenure finally came to an end after Bilkul Football WBA, a company ultimately owned by Florida-based entrepreneur Shilen Patel and his father Dr Kiran Patel, acquired an 87.8% shareholding in West Bromwich Albion Group Limited, the parent company of West Bromwich Albion Football Club. This change in ownership was urgently required, due to the numerous financial problems facing West Brom, including growing high-interest debt and serious cash flow concerns, following years of no investment from the former owner. Indeed, West Brom’s auditors had already rung the alarm bell in the 2021/22 accounts when they cast doubt on the club’s ability to continue as a going concern without making player s

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000. The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts. Money brought in from football has gone up too. Match day income is

Spurs to sell minority stake

Tottenham Hotspur is in talks to sell a minority stake in a deal that could value it at up to £3.75 billion and pave the way for Joe Lewis and his family to sever ties with the Premier League football club. Tottenham chairman Daniel Levy is seeking an investment that values the club at between £3.5 billion and £3.75 billion, including debt. While the terms of any deal have not been finalised, City sources expect Spurs to sell about 10 per cent. The club is being advised by bankers from Rothschild on the sale. Tottenham wants to raise fresh capital for new player signings and to help fund the development of an academy for its women’s team, as well as a 30-storey hotel next to its north London stadium. The financier Amanda Staveley, who brokered the deal for Saudi Arabia’s Public Investment Fund to take over Newcastle United, is understood to be among the parties to have expressed an interest in Tottenham. Staveley’s fund, PCP Capital Partners, has raised about £500 million to depl

The Political Economy of Football V2

Search This Blog