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Player value downgrade pushes relegated Stoke financials into the red

By David Owen

November 21 – Stoke City, the main club in England’s traditional potteries region, nosedived into loss in its relegation season, after directors decided to write down the value of its playing squad.

A pre-tax loss of £30.1 million was recorded for the year to 31 May 2018, after taking into account a £29 million “impairment provision” against the previously calculated carrying value of the playing squad in the balance-sheet.

A downturn in TV and media income was behind a dip in turnover from £136 million to £127.2 million. After an uninterrupted decade of Premier League football, the Midlands club was relegated to England’s second tier for the present season and currently lies in mid-table in the Championship.

Excluding player trading, operating expenses still came in below turnover, at £123.8 million. Staff costs jumped nearly £10 million, from £84.9 million to £94.2 million.

Another feature of the new figures was an upturn in net liabilities, which rose from £18.8 million to £50.7 million. The principal indebtedness – £122.7 million, up from £75.7 million – was, however, to the parent company and carried no interest. The ultimate parent company is bet365 Group Limited, which is controlled by the Coates family.

While relegation means that turnover is set to plunge in 2018-19, the club has generated some value from player disposals since the year-end, notably the sale of Swiss star Xherdan Shaqiri to Liverpool in July. The accounts note that initial proceeds from such disposals subsequent to the year end have reached £22.8 million. The year-end net book value of these registrations was said to be £8.8 million.

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