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.
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