Stoke City’s latest financial figures have been revealed in new accounts posted by the club. These figures cover the 2023/24 season so are slightly different than the numbers that were published recently by then parent company bet365, which ran to the end of March 2024.

In brief, they show Stoke made an operating loss of £26.3 million but that number in itself doesn’t quite tell the full story so here we try to unpack what it all means.

Stoke make huge Investment in stadium and training ground

Money spent on infrastructure does not count towards Financial Fair Play calculations and Stoke, constrained in the transfer market, have been spending a lot on this over the last few years.

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There was £6.1m spent in 2023/24, which included the new LED lighting system at the bet365 Stadium and starting work on the Boothen Quarter fan zone, which opened at the start of the 2024/25 season.

That was on the back of an £8.2m investment in 2022/23 and work has since been launched on a new £12m first team facility at Clayton Wood, which is scheduled for completion in December.

The stadium and training ground were both transferred back to ownership by the club from bet365 as part of a restructure last summer that saw John Coates take sole charge. It will be a bonus for Stoke in the 2024/25 season not to have to pay an annual lease of about £9m to bet365 for the stadium and training ground.

The frenetic 2023 summer transfer window

Accounts show a transfer net spend in 2023/24 of £6.1m “principally due to the revenue generated from the sale of Harry Souttar in January 2023 (the previous year’s accounts) being reinvested in the playing squad during the subsequent summer transfer window”. Stoke also brought in £4.4m in by selling Josh Tymon to Swansea and Jacob Brown to Luton.

But the £18.2m signings made in the summer of 2023 have not been as successful as Stoke had hoped from a big reset, when then-manager Alex Neil and then-technical director Ricky Martin, with then-newly appointed head of recruitment Jared Dublin, had a near-blank slate to build a squad.

Big buys included Wouter Burger, Bae Junho, Million Manhoef and Ryan Mmaee while seven-figure deals were agreed for Junior Tchamadeu, Nikola Jojic, Mehdi Leris and Lynden Gooch.

Some have already left or been written off while Burger, Junho, Manhoef and Tchamadeu are the ones left flying the flag for that year’s recruitment. It will be interesting to see if, in time, how much the club recoups, loses or is successful in the Championship with that intake.

The wage bill rose by 14 per cent to £34.4m.

In the here and now there is a depressing line in the accounts next to the figures charting how much was spent. It compares the final league position in 2023 (16th) to the final league position in 2024 (17th).

A statement from Stoke said: “As for any football club, staff and player costs remain the most significant expense. The directors will always seek to maximise the cash available to spend on player wages within the constraints of the income and costs of the business and profit and sustainability rules.”

Stoke City reliant on backing from the Coates family

Never mind FFP for a second, in the real world as a business Stoke ended up with a cashflow deficit before owner funding of £34.3m. Football finance expert Kieran Maguire said recently: “To lose more than £30m when you’ve only got £23m or £24m coming into the club – in any other business you’d say let’s call the whole thing off.”

But football is not like any other business and the staggering £676,000 that Stoke have been losing on average per week since relegation from the Premier League in 2018 is not even all that unique in the mad world of the Championship where there is a huge revenue disparity between clubs with and without parachute payments – and that is still dwarfed by the disparity with what clubs earn even at the bottom in the division above.

The EFL is lobbying for changes in distribution but there is an admission in the board’s strategic report that ongoing losses are expected and that they will cover them while also pursuing a change in financial regulations to allow for more “sustainable investment from committed owners”.

It says: “The directors are aware that, in common with virtually all clubs in the Championship, the club will continue to operate with underlying annual financial losses unless and until: the club is promoted back to the Premier League, which remains the directors' principal objective; the funding formula within English Football is changed to provide more income for clubs outside of the Premier League; and/or further profits are made from player sales such that they balance the trading losses being incurred.

“In the absence of the above, the owner not only remains committed to fund the ongoing losses of the club but also acknowledges the desirability to provide this funding through non-refundable, non-interest bearing share capital.

“The directors are currently restricted from implementing their full plans for the club as a result of the financial regulations implemented by the EFL in the Championship that currently prevent their use of sustainable investments that would otherwise be made.

“The directors remain committed to working within these restraints as required, but will continue to press for a change in the financial regulations to allow for sustainable investment by committed owners for the benefit of the club and the local area.”

Stoke’s stance on a new regulator

An independent regulator was one of the big recommendations of a fan-led review into English football, tasked with making the sport sustainable, accessible and affordable – and with making sure supporters are taken into account regarding big decisions.

It may even have the power to step in and try to sort out distribution of finances, which some Premier League clubs have refused to countenance.

Stoke’s strategic report says: “The club will, as previously, continue to engage with relevant stakeholders regards the development of an Independent Football Regulator and the promotion of the concept of sustainable owner investment realised through changes brought about by the Football Governance Bill, currently making its way through the legislative process.

“The club will continue to engage with the EFL, Government and other stakeholders to pursue the successful realisation of this objective.”

What does this all mean for Stoke’s transfer budget?

Stoke posted an operating loss of £18.2m in 2021/22, £11.4m in 2022/23 and £26.3m in 2023/24 – but that includes spending on things such as infrastructure, the academy and women’s team, which does not count towards FFP.

Clubs in the Championship are allowed to lose up to £41.5m on things such as transfer fees, agent fees and player wages over any rolling three-year period.

It would be interesting to know the exact details of how much wriggle room Stoke have in the January window but Mark Robins and Jon Walters have been clear that there isn’t much scope to sign big cheques at this stage of the cycle.

Robins said on Friday: “We’re working hard with the players we’ve got in the building and also to try to do something ourselves this January.

“January, like I’ve said before, is a really, really difficult window but everyone is working as hard as they can do in a really difficult market and at a restrictive time for the football club. We’re trying to make the best of that and navigate our way through.”

Will the FFP rules change?

The FFP rules have been up for review and Championship clubs have been debating how and why they should change.

The Premier League is now moving towards a Squad Cost Rules approach, introduced for Uefa competitions in 2022, that instead ties how much each club can spend on player wages and transfer fees to a percentage of their revenue. Uefa will eventually set that at 70 per cent while the Premier League are going for 85 per cent.

Clubs in the lower leagues already use a cap; set at 60 per cent in League One and 50 per cent in League Two - but until now, and unlike in the Championship or Premier League, investment with guarantees from owners has counted towards revenue, which is in part why Birmingham City were able to spend so much last summer.

But League One and League Two clubs have voted to tighten those rules by staggering the amount of cash that owners can pump in.

Research has apparently been commissioned by the Championship about going forward with an SCR plus luxury tax proposal, “which would allow the laissez-faire brigade to spend more than 85 per cent providing they match their over-spending by putting the same amount in a central pot that would be shared with the other teams.”

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