Owner support has not brought success for Stoke

Little appears to have gone right for Stoke City since the club dropped down to the Championship.  Even though they are backed by the wealth of bet365, Stoke have been constrained by the need to comply with the EFL’s Profitability and Sustainability regulations, though it’s also true that they did not make the most of the parachute payments they received after relegation.

Stoke swung from a £102m pre-tax profit to an £11m loss, though the decline reported in the accounts was almost entirely due to the owners of the club forgiving £120m of historic debts in the previous season.   In terms of normal business, Stoke’s revenue was unchanged at £31m, though profit from player sales rose £4m from £11m to £15m.

Player trading

This is the third highest profit from player trading to date in 2022/23, only surpassed by Watford’s £59.2m and Middlesbrough’s £22.3m. Traditionally, the only clubs in the Championship that make big money from player trading are those that have recently been relegated from the Premier League, so from a financial perspective Stoke had a pretty good result here.

After two fallow years during the pandemic, Stoke have made £26m profit from player sales in the last two years, though this is still less than the £40m they generated in the two-year period between 2018 and 2019, i.e. when they were last in the Premier League and the first season after relegation.

However, this season will not be so good, as most of the departures have been on free transfers. As far as can be seen, the only deals that brought in any money were Jacob Brown to Luton Town, Josh Tymon to Swansea City and Connor Taylor to Bristol Rovers.

Not only was Stoke’s total revenue flat compared to prior year, but there was also little movement in each of the revenue streams. There were small increases in both broadcasting, up £0.3m (3%) to £9.3m, and commercial, up £0.3m (2%) to £16.9m. However, this was offset by a £0.5m (10%) reduction in match day to £5.1m.

Although Stoke’s £11m loss is still not great, it was actually not too bad for the Championship. In fact, it is the third best financial performance of the eight clubs that have published 2022/23 accounts to date.

Stoke have now posted losses in five of the last six seasons, the only exception being the year that benefited from the substantial loan write-off. This is very different from their time in the Premier League, when the club consistently managed to make (small) profits.

Since relegation from the Premier League, Stoke’s revenue has dropped by three-quarters, falling by £96m from £127m in 2018 to £31m, almost entirely due to less TV money in the Championship (a £92m decrease), though gate receipts and commercial are also down by £3m and £2m respectively.

As a result, Stoke’s revenue fell five years in a row from a peak of £136m in 2017, mainly as a result of declining parachute payments, before bottoming out last season.

Since relegation from the Premier League, Stoke’s revenue has dropped by three-quarters, falling by £96m from £127m in 2018 to £31m, almost entirely due to less TV money in the Championship (a £92m decrease), though gate receipts and commercial are also down by £3m and £2m respectively.

As a result, Stoke’s revenue fell five years in a row from a peak of £136m in 2017, mainly as a result of declining parachute payments, before bottoming out last season.

Stoke’s broadcasting income rose £0.3m (3%) from £9.0m to £9.3m, mainly due to the televised fifth round FA Cup match against Brighton & Hove Albion. However, this is down almost £100m from the £109m peak in 2016/17, when they finished 13th in the Premier League.

Stoke’s £16.9m commercial revenue is one of the largest in the Championship, only behind Bristol City £21.4m and Norwich City £17.0m, with a big gap to the next highest, Watford £10.3m.  Of course, Stoke benefit from a good commercial agreement with their owner bet365, covering shirt sponsorship and stadium naming rights. In addition, the Macron kit supplier deal has been extended to 2024.

Stoke’s £5.1m match day revenue is in the bottom half of the Championship, only around half of Norwich City’s £10.0m, partly due to low ticket prices, which have been held at the same level for an incredible 16 years.

The club said that Stoke’s average attendance was “consistent” with the prior year, albeit “reflective” of the club’s 16th place finish in the Championship. In other words, it reduced (slightly), which means that crowds have dropped every year since relegation.  They have now fallen by nearly a third (8,400) from 29,280 in the last season in the Premier League.   Despite the decrease, Stoke’s 20,678 average attendance was still the sixth highest in the Championship, though nearly 18,000 below Sunderland’s 38,480.

Wages have now reduced five years in a row, dropping nearly 70% since relegation. In fact, this is the club’s lowest wage bill since £29.7m in 2009, but it should fall even further after the departure of some relatively high earners last summer.

Stoke have spent relatively little on new players recently, amounting to only £25m in the last four years, which is in stark contrast to their first season after relegation, when they splashed out an amazing £67m. As further evidence of the brakes being applied, in the last three years in the Premier League their gross spend averaged £49m.   However, the club did put its hands in its pockets last summer (relatively speaking) with an outlay of around £18m.

Stoke’s gross financial debt in the football club increased by £17m from £105m to £122m, all ultimately owed to the Coates family, as there is no bank debt. This was substantially reduced the previous season from a high of £212m after the owners waived £120m of debt.

The Coates family have pumped £338m into Stoke City since regaining control of the club in 2006, comprising loans £251m, share capital £2m and £86m payment for the sale of the stadium and training ground

Excluding the property sale proceeds, the Coates family put in £188m of funding in the 10 years up to 2022. That’s a lot of money, only surpassed in the Championship over that period by Fulham £722m, QPR £268m and Cardiff City £194m.

Stoke’s owners should be praised for their strong financial backing, but the performances on the pitch have left a lot to be desired with the club finishing closer to relegation to League One than promotion back to the Premier League in the past few years.