Manchester City are back in front and back in profit

ON THE field of play, Manchester City overtook their neighbours United almost a decade ago, but in 2020-21, they became the first Premier League outfit to earn more than the team from Old Trafford. City’s revenues for 2020-21, totalling £ 569.8 million, were a club record, but they also topped United’s income by more than £ 70 million.

The 2020-21 season saw City win their fifth Premier title since 2011-12 and their 13th trophy since 2010-11. Since they were taken over by Abu Dhabi, City have won more than anyone else, including Chelsea, who have won 12 pieces of silverware in that timeframe. They have also finished above United nine times in 13 seasons. In 2020-21, they also won the EFL Cup and reached the final of the Champions League and semi-finals of the FA Cup. No surprise the club called it a “very special season”. Their win rate across the campaign was 77%.

City have become a sporting multinational that has more depth and reach than virtually every other footballing institution worldwide. They have arguably the best, most balanced squad in Europe, the most sought-after coach, a good stadium, an admirable style of play, a decent community presence, growing commercial operation and they have the fourth best brand in football (source: Brand Finance). City have also enjoyed a 47% growth in social media interaction and have around 80 million followers across the three main platforms. 

In short, Manchester City’s owners have not just built a good team with a top coach, they have aimed to create what looks like a solid, corporate structure that can ensure success is self-perpetuating. 

At the same time, the club is much-envied and disliked by many opponents and their success has often been dismissed as the product of limitless piles of money from the middle east. But what sets them apart from many monied projects is the long-term view they seem to have taken. Whether this is good for the competitive balance of the Premier League is a matter for debate. Already in Europe the Bundesliga and Ligue 1 have been monopolised by Bayern Munich and Paris Saint-Germain respectively, the Premier could be next.

City, after making a net loss of £ 126 million in 2020, moved back to a small profit of £ 2.4 million. Nevertheless, this was an impressive swing to the positive of more than £ 128 million. Net debt was also reduced significantly, largely due to an increase in cash of £ 27.3 million.

The revenue mix was dependent on commercial activity and broadcasting, more than compensating for the loss of matchday income. Broadcasting increased by 56% to £ 297.4 million, largely due to City’s run to the Champions League final, while commercial was up by 10% to £ 271.7 million.

City generated a £ 68.6 million profit on the sale of players, almost £ 30 million more than 2019-20 and the highest in the past decade. The club’s outlay in 2020-21 amounted to £ 155 million (only Chelsea spent more in the Premier), but they recouped £ 51.7 million. The biggest signings were Rúben Dias (£ 62 million, Benfica), Nathan Ake (£ 40 million, Bournemouth) and Ferran Torres (£ 20.7 million, Valencia). Among the players sold was Leroy Sané, who moved to Bayern Munich for £ 54.8 million.

Over the past decade, City have spent £ 1.37 billion on players, versus Chelsea’s £ 1.32 billion. Their income from sales is much lower, £ 465 million compared to £ 870 million. One notable feature of City’s transfer activity is that they make fewer mistakes than some of their peers, but if things don’t work out they are quick to move them on.

The 2021 current squad cost more than £ 800 million. The wage bill reached a record high, £ 354.7 million, representing 62.2% of income, more than 10 percentage points lower than the previous season. Since 2008, City’s wages have risen by 654%.

They have also made a strong commitment to women’s football and are one of the top clubs in the Women’s Super League. In 2021, they were runners-up and had extended runs in every major competition.

One prize eludes Pep Guardiola and his City project – the UEFA Champions League. It was clear to many people that Guardiola slipped-up in 2021 in his approach to the final and Chelsea deserved their victory. Despite this setback, they are the only English club to play in every Champions League for the past 10 years and they are in this season’s last 16.

Nobody should forget this is a club in a privileged position, but so much of what they do is not about short-termism. Admittedly, they are, to quote David Conn’s book title, “richer than God”, but it will be interesting to see how Newcastle United approach their new found status. If they are sensible, they will look at Manchester City.

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