SPLITTING THE DIFFERENCE
Stoke City’s ownership has changed from gambling giants bet365 to solely John Coates... a clearly significant move. But what does it actually mean in practice? Sentinel Potters correspondent PETE SMITH looks at how the decision will impact on the day-to-d
ONE of the most important stories of the summer at Stoke City has been the transfer of ownership from bet365 to John Coates in a deal that has cleared debts and put the training ground and stadium back in the club’s ownership.
Yet at the same time it was billed, by Coates himself, as business as usual.
The big money infrastructure projects led by the building of a new first-team facility at Clayton Wood – work should start next month – will carry on as planned.
After all, the football club has been owned by a company called Stoke City Holdings, Stoke City Holdings has been owned by bet365 since 2006 and bet365 is owned by the Coates family.
So what does it mean? And does it mean that Stoke have a bit more loose change in the transfer market heading towards the summer deadline day?
“I’m hugely proud of my association with Stoke City, it means a great deal to me and my family,” said John Coates, who is now chairman on his own, with his dad Peter Coates a director. Richard Smith, married to John’s sister Denise, is vice-chairman.
“The first thing to stress is that it’s very much business as usual, we’ve made these changes because it was the right thing to do from a licensing perspective so that bet365 can continue with its global expansion and it also allows us to continue to support the club in the various ways we do. Things go on as normal.”
That global expansion has seen bet365, which increased its workforce to 7,757 last year, invest heavily in new markets. This includes the United States, where a ban on sports gambling was overturned in 2018 and is now viewed as a potential $140 billiona-year market.
Even as far back as 2012, only up to 30 per cent of customers were from the UK.
But there are legal, logistical and licensing challenges to handle across different countries and states within countries.
In 2022, for example, an application for a betting licence in New York was turned down. It has operated a China-accessible website even though gambling has been banned on the Chinese mainland since 1949.
Kieran Maguire, the football finance expert, speculated that bet365’s global success could be a motivation to untangle itself from the football club in its base city.
He said on his Price of Football podcast: “I don’t see there are going to be (financial fair play) benefits here so in terms of the motivations… bet365 are a spectacularly successful organisation, very profitable. Why did they feel the need to sell the stadium? It’s a strange one.
“The one thing that does come to mind from my point of view is that perhaps bet365 themselves are looking for a partial sale.
“If they are going into international markets as the most successful online betting company in the UK and possibly the world it might put off some investors who say, ‘We like the look of the numbers but Stoke City? You’re putting in half a million pounds a week? We’re not interested in Stoke City and don’t really want to be part of that.’
“It’s good that it’s being kept within the Coates family in my view. John Coates has enough money and wealth coming from bet365 to be able to underwrite the current level of losses with ease.
“I think the motivation of the sale comes from bet365 being so successful that other parties perhaps want a slice of that particular pie but Stoke City doesn’t particularly fit in with that portfolio of investments.”
That has never been a plan for the Coates family. Back in its filing for the New York licence, a statement from the company said: “We have no plans to sell the company, merge the company, or to take the company public. These factors contract sharply with many of our competitors who are highly leveraged and dependent on outside investment to maintain their business and fund operations.
“If licensed, bet365 would be an operator that is ‘in it for the long haul’ in New York, with very little likelihood of a merger or acquisition resulting in the loss of our licence.”
It is remarkable how the intricacies of gambling licensing around the world can have such an impact on a football club but it is fair to say that thousands of Stoke supporters will probably be happy to leave how they are managed to the experts.
John Coates was asked at the eveof-season Q&A with supporters if the change of model would lead to a material change with the club.
“Hopefully we’ll win more football games!” he said.
“It’s now completely debt free, which I think is a real positive. We’ve moved both the stadium and the training ground into the football group and that’s good.
“But the ambition and the investment remains the same. We’ve got the infrastructure projects that started off as a fiveyear plan I think is now a six or seven-year plan. That all continues and the ambitions remain the same, we just want a successful football club.”
Other projects on the five/sevenyear plan have included installing safe standing, shifting the away end and building a 1,550-capacity fan zone, now known as the Boothen Quarter. The stadium sports bar has undergone a major renovation, seating and toilets have been replaced around the ground, the concourses have been improved and lounges upgraded.
“I think in its simplest form it’s about creating the best facilities and environment for both players and staff and the best match day experience for our fans,” said Coates. “We firmly believe that those together will give us longterm success.”
But how about financial fair play, the three dreaded words that have haunted Stoke since relegation
from the Premier League in 2018? It doesn’t have a material effect on profit and sustainability calculations, said Coates.
“In terms of competitiveness, clearly with the profit and sustainability rules hugely favour clubs with parachute payments at the moment. We’re not at a level where we can be competitive with them because they get the benefit of £40-odd million from the Premier League which counts towards their profit and sustainability calculation, whereas if we put equity in that doesn’t count. “However, within non-parachute payment clubs we will have a competitive budget.”
The FFP rules, however, are a-changing. Hopefully. In fact, Stoke’s head of finance John Pelling is sitting on an EFL working group that is reviewing the current rules and how they could be better serve the clubs’, the league’s and the game’s interest.
“I think if I was on Mastermind this would be my specialist subject,” said Coates.
“There are things changing on the Financial Fair Play front. If you look in the Premier League, they have been trialling, alongside existing P&S, what they call squad-cost ratio. Basically you can spend a percentage of your income on the squad. They are expecting that to then come in fully next year instead of P&S.
“In Leagues One and Two you’ve got what they call SCMP, which is again a percentage (of income) that you’re allowed to spend on your squad. The good part of that, the way that League One and League Two have done it, is that if you put in equity you can then bump up that amount. It’s a very sensible way of doing it in real time.
“There’s a working party to look into what we’re going to do in the Championship and we’re aligned with that. John Pelling is actually on the working party. I think watch this space. We’ll see where this leads to.”
There is one more thing, at least for now, to perhaps highlight on this subject. While bet365 might not be Stoke’s owners anymore, they are still a major source of income as sponsors. The stadium is still called the bet365 Stadium and the brand is printed across all three kits and training gear.
Advertising is coming under increased scrutiny and Premier League clubs will not be allowed to have gambling companies on the front of their shirts in two years’ time.
But Maguire said: “With regard to the football shirts issue, it’s a Premier League issue only so we’re not going to see that in the EFL. It only affects front of shirt so therefore the bet365 Stadium – and what’s going to happen to the naming rights of the stadium – I’m not so certain. I would imagine that bet365 would like to continue their relationship.
“While the Premier League from 2026/27 is going to ban front-ofshirt deals, back-of-shirt deals, sleeve deals, short deals, sock deals, you name it, shin pad deals can still be sponsored by gambling companies. We are seeing lip service from the Premier League to reducing its relationship with the gambling industry.”
The last word should go to Maguire too, as he discussed whether it was standard practice in business to have a nominal change of ownership for reasons that might be publicly unclear, at least immediately.
“Yes,” he said. “Switching assets around is quite common. It’s part of succession planning, it’s part of a broader strategy for a business. If you take a look at the way Mike Ashley runs his businesses, he’s got them all set up in different companies even down, effectively, to every branch of Sports Direct being a different company. It allows you to sell off bundles of assets in a cleaner manner.
“I don’t think the Coates family wants to end its association with the football club because they love the football club and they go to every match. That’s great.”
It might make interesting reading when the 2024/25 accounts are published late next year but hopefully there will be some decent football news to keep us busy until that point.