A judge in London ruled in favour of businessman Melvyn Levi, 65, who brought the action over comments made about him by Mr Bates.
Sir Charles Gray said the libel action arose out of events surrounding the acquisition of Leeds United Football Club by a consortium headed by Bates in 2005.
Levi alleged he was "persecuted" and sued over three articles written by Mr Bates in the Leeds United programme in 2006 and 2007 and a letter written to club members in August 2007.
His claim was that they contained "grave and offensive" libels which "seriously injured" his reputation.
Bates, 78, denied libel, but the judge ruled on Thursday that he had failed in his defences of justification and fair comment.
Levi, who lives in Leeds, said he was accused of being a "shyster" who had tried to blackmail the club over money.