Stoke City dream boosted as John Coates fights £50m black hole

Stoke City dream boosted as John Coates fights £50m black hole

 

Joint-chairman John Coates has been lobbying for a change to Financial Fair Play rules and to the way that money is distributed from the Premier League.

Stoke City chairman John Coates has been challenging the EFL and Premier League about profit and sustainability rules.

New Championship financial analysis shows next season will be one of the most level playing fields in years – as Stoke City try to make sure summer recruitment gives them as strong a chance as possible to take advantage.

 

The three relegated teams – Ipswich, Leicester and Southampton – will receive nearly £50 million in parachute payments to keep them operating in a different stratosphere to the rest except Sheffield United, who will collect a £30m payment if they lose their play-off final against Sunderland.

 

That is in comparison to six clubs receiving parachutes in 2024/25 and six again in 2023/24. There were five a season before that but as many as eight in 2019/20 – with the ninth eligible, Sunderland, picking up their cheque for that season in League One.

 

There have never been as few as three since the parachute model took on its current form a decade ago – and having so few could save the Premier League about £130m in payments it won’t have to make. That money will be shared between the 20 top flight clubs, getting about £6.5m each.

 

The system, coupled with challenging Financial Fair Play rules, present a major problem for English football to fix to stop the Premier League becoming an increasingly closed shop.

 

Fourteen of the 20 clubs who have been promoted since Stoke came back into the Championship have gone up while in receipt of parachute money – leaving the Potters still kicking themselves for Gary Rowett’s disastrous summer of 2018 when it was their time in the black.

 

But it does set up a particularly intriguing battle in the Championship for 2025/26, with the spending power across up to 21 clubs being much more equal. Fifteen clubs are within £7m of an average £22.41m income, according to their latest accounts.

 

Stoke are well placed in terms of commercial revenue (£16.7m), the fourth highest out of next season’s Championship clubs. Only Leicester (£32.8m), Bristol City (£25.4) and Wrexham (£17.5m) can beat that and, remarkably, that figure for Hollywood-backed Wrexham came when they still in League Two.

 

Birmingham City’s owners have been bullish in claiming that their commercial revenue alone will skyrocket to be in line even with the total income of parachute clubs. They made £12.9m on the commercial side in their most recent accounts so will have had to improve that by an unprecedented £60m to come good.

 

“If our revenue progresses as we expect into next season, which is basically a certainty, we will be the highest revenue-generating club in the Championship ever not receiving parachute payments — and we will be on a par with those receiving parachute payments,” said chairman Tom Wagner recently.

 

Stoke are mid-table when it comes to match day income (£5.7m), in part because season tickets have been capped at the same price since 2008. Sunderland (£11.6m) and Norwich (£11.3m) lead the way in that regard for the non-parachute clubs.

 

Mark Robins is still probably going to have to wheel and deal in the summer window because Stoke are carrying Alex Neil’s 2023 shopping spree in their three-year rolling FFP cycle – and John Coates will continue to lobby for changes to the rules to address the game’s larger problems.

 

“I always give the example that parachute payment clubs receive (nearly £50m) from an external source, which is the Premier League, and that money counts towards revenue for profit and sustainability purposes,” he said about the situation. “Sustainable owner equity put into a non-parachute payment club, for some reason, doesn’t count towards that calculation. I can’t see in anybody’s world how that is fair.”

 

But the 2024/25 season was incredibly close – the 20 clubs who are confirmed to be in the division again next season were all within 10 points of 59 points – and getting transfer business right over the next couple of months will be a differential if it is at least as tight again.

 

The three relegated clubs will be the runaway bookies’ favourites to go straight back up. Leicester, however, are in a pickle with profit and sustainability rules, having posted considerable losses in recent years – and the Premier League and EFL closing a loophole where clubs could escape censure through relegation or promotion.

 

Southampton are managerless following a wretched season and Ipswich seem comparatively stable, albeit having been demoted with an embarrassingly small points haul.

 

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