IF ANY club among world football’s elite can withstand a substantial £ 125 million pre-tax loss it is surely Manchester City, who also remain on target for an unprecedented quadruple of major honours in 2021.
City’s loss may have highlighted the impact of the pandemic on even the biggest football entities, but the club was quick to reassure and predict they would return to profit in the current campaign. For most clubs that would sound an over optimistic claim, but there was an underlying sentiment that City had paved the way to make 2020-21’s accounts as normal as possible, which explains the caveat that 2019-20 and 2020-21 had to be viewed as one long, covid-affected balance sheet. City are also insistent their long-term approach means they are not over-dependent on revenue streams most compromised by the crisis.
Although City’s revenues declined by almost 11%, their total of £ 478 million representing their third highest annual result. They were just £ 22 million shy of a third consecutive half billion of income, but 2019-20 was also their first loss since 2013-14 – they had been in profit for five successive seasons.
| League | FA Cup | FL Cup | |
| 2010-11 | W | ||
| 2011-12 | W | ||
| 2012-13 | |||
| 2013-14 | W | W | |
| 2014-15 | |||
| 2015-16 | W | ||
| 2016-17 | |||
| 2017-18 | W | W | |
| 2018-19 | W | W | W |
| 2019-20 | W |
It’s very clear where the revenues were hit the most – both broadcasting and matchday were down by a quarter, with the former declining by more than £ 60 million. The club also took a £ 106 million hit on player amortisation, taking their pre-tax loss to £ 125 million.
The loss is likely to be the second highest in the Premier League in 2019-20, although Liverpool have yet to announce their results. Of those who have made their financial performance public so far, only Everton (£ – 139 million) have made a bigger loss. Only Manchester United’s revenues (£ 509 million), have been higher. Premier League clubs in 2019-20 lost around £ 780 million, but the figure is rising.
Over the past decade, City’s revenues have grown from £ 153 million in 2010-11 to the current level, a jump of 314%. No other major club has seen such a trajectory in their income generation. Liverpool’s total revenues have risen from £ 184 million to £ 489 million in 2020, a grow rate of 268%. During this period, Real Madrid and Barcelona experienced a 139% increase and Bayern Munich climbed by 192%.
City have almost closed the financial gap between themselves and Manchester United even though United have greater crowd potential than their one-time “noisy neighbours”. City are also more successful on the pitch now, having won 11 trophies since 2011 compared to United’s five. United’s global appeal is wider, though, as their social media presence across the three main channels shows. United have around 140 million followers versus City’s 75 million. Effectively monetised, social media expansion can reap big rewards for a club.
Revenue growth has been vital to accomodate player remuneration. City’s wage bill has gone from £ 174 million in 2011 to £ 351 million in 2020. However, in 2011, City were paying out more than they earned, as evidenced by a wage-to-income ratio of 113.7%, compared to 73.4% in 2019-20, the highest level since 2013. That said, the ratio was 58.9% in 2018-19, so an 11% increase in wages, coupled with lower revenues, put more than 15 percentage points on the ratio last season. By comparison, wage bills at some top clubs declined in 2019-20, for example, Arsenal went down by 3%, Barcelona 12%, Juventus 13% and Manchester United 15%. By contrast, Leicester City (+26%), Real Madrid (+5%) and Everton (+4%) all paid out more cash to players than they did in 2018-19.
By their own lofty standards, City’s transfer market activity was relatively muted in 2019-20. They spent, according to Transfermarkt, £ 144 million, with top signings being Rodri of Atlético Madrid, who cost the club £ 56 million and João Cancelo, a £ 58 million capture from Juventus. City’s net expenditure in 2019-20 was £ 79 million, which was exceeded by four Premier League clubs (Arsenal, Aston Villa, Manchester United and Wolverhampton Wanderers). Over the past five years, City have had the highest net deficit in the European market, however, their £ 590 million outlay around £ 100 million more than the second biggest net spender, Manchester United.
Since 2010-11, City have spent £ 1.4 billion, more than any other club, but how the current climate affects their ability to buy big remains to be seen. One could assume that they will fare better than most of their rivals in snapping-up young talent like the sought-after Norwegian, Erling Haaland. The club has said it will only entertain a “smart market” and will only pay “fair prices”, but even Pep Guardiola has made teasing remarks about paying a record fee for a player, a comment obviously aimed at the bidding war that will open up when the season ends.
The pandemic has, inevitably, impacted the club’s cash reserves which have fallen from £ 130 million in 2018-19 to just £ 18 million. Any big signings going forward will undoubtedly be made with one eye on ensuring City don’t run into Financial Fair Play trouble.
| 2020 £m | 2019 £m | Growth % | |
| Turnover | 478 | 535 | -10.6 |
| Matchday | 42 | 55 | -24.2 |
| Commercial | 246 | 227 | +8.5 |
| Broadcasting | 190 | 253 | -24.8 |
| Wages | 351 | 215 | +11 |
| Wage-to-income | 73.46% | 58.91% | +25 |
| Profit/loss, after tax | -126 | 11 | -1255 |
Manchester City are a club that will always divide opinion, from their ownership model to the power and influence of their expanding City Football Group. They will surely be at the heart of any discussions around restructuring European football, including the creation of a super league. They appear to be the epitome of modern corporate football, a topic that continues to be controversial. That is unlikely to concern City too much as they pursue their goal of domestic and European dominance. The 2020-21 season may just be the year it all comes right for them, even if their recently-published financials show they are mortal, after all.
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