Owners have provided £1.3bn of funding for City

The authoritative Swiss Ramble has carried out his usual forensic examination of the accounts of a club, this time Premier League champions Manchester City.

Although City have become self-sufficient in the last few years, an additional £58m of share capital was issued in 2017/18, possibly to fund the transfer of Aymeric Laporte. To date, the owners have provided more than £1.3bn of funding via new shares or loans.

They also have relatively low annual interest payments of £3.5m, far below Manchester United at £19.5m and Arsenal at £12.3m, as Mansour’s funding via additional share capital provides some competitive advantage.

Their £66m gross debt is much smaller than United's £503m (Glazers’ leveraged buy-out) and Arsenal £227m (Emirates stadium loan). It is worth noting that Chelsea have around £1.2bn debt in their holding company.

The wages to turnover ratio reduced from 56% to 52%, which is one of the lowest (best) in Premier League, though not as low as Spurs 41%, United 45% and Arsenal 47%. This important ratio has significantly improved since the 114% reported in 2011, the year of the £197m loss.

However, City’s £260m wages are a fair way above the other leading clubs: Chelsea £220m, Liverpool £208m, Arsenal £199m and Tottenham £127m (all 2016/17 figures). The wage bill is almost at the same level as United's £264m, though this is expected to rise to £290-295m (based on United’s financials up to Q3). The last time that City’s wage bill was above United’s was 2013.

Match day income rose £5m (9%) from £52m to £57m, as they staged two more home games and had a Champions League quarter-final as opposed to a play-off. However, this was still only the fifth highest in the Premier League, around half of United's £112m.

The importance of commercial business to City is clear, as 46% of their 2017/18 revenue came from this revenue stream. The only comparable club is United 47%, while Liverpool and Chelsea are only at 37% and other clubs are significantly lower.

Etihad shirt sponsorship was worth £45m a season, while naming rights for stadium and campus estimated at £15-20m. (Some critics have suggested that this is above a commercial rate). City Football Group will reportedly have a £50m kit deal with Puma from 2019/20, a big increase on current Nike £20m. Nexen Tire sleeve sponsor is £10m.

The club has earned a lot more revenue (€277m) from European competition than any other English club in the last 5 years: Chelsea €216m, Arsenal €214m, Manchester United €170m, Liverpool €150m, Tottenham €138m and Leicester City €82m. (No doubt they are hoping for even bigger earnings this season as they target winning the Champions League).

TV money from the Premier League increased £3m to £149m, boosted by finishing 1st versus 3rd the previous season (merit payment), though hit by being shown live fewer times (facility fee).

Based on 2016/17 figures, Manchester City were in fifth place in the Deloitte Money League, as their £453m revenue was only surpassed by Manchester United £581m, Real Madrid £580m, Barcelona £557m and Bayern Munich £505m.

Up to now, the Manchester City strategy has not been overly reliant on player sales, but the £39m they made from this activity in 2017/18 would have been the fifth highest in the 2016/17 Premier League. Largely due to Iheanacho to Leicester, Bony to Swansea and Mooy to Huddersfield.

Despite the rise in profit to £10m, this would still have been one of the smallest in 16/17. Thanks to TV money and wage controls, the Premier League has become very profitable with only one club reporting a loss, while many had huge profits.

Wolves get raw deal from FFP

I used to see a lifelong Wolves fan for lunch once a month. He was approaching ninety, but still went to games. Sadly he passed away the other week. As football finance guru Kieran Maguire has noted, Wolves continue to be constrained by financial fair play rules. Radio 4 this morning described them as this year's 'crisis club' and the pessimists have certainly been piling in. Martin Samuel wrote sympathetically in the Sunday Times yesterday, saying that the Premier League drives talent away with regulatory red tape: 'Why could Al-Hilal sign Neves? Because Wolves needed the money. And why did Wolves need the money? Because the club had to comply with an artificial construct known as financial fair play. So Wolves are going skint, yes? No. There is no suggestion that Wolves are in financial trouble, only that they are failing to meet the rigours of FFP. Wolves’ owners appear to have the money to run the club, and invest in the club, and in fact came up with a pow

Gold standard ground boosts Tottenham's income

The gold standard in European football grounds is the Tottenham Hotspur stadium in north London, a £1bn construction project completed in 2019. Its impact on the club’s finances has become increasingly clear as the effects of the pandemic have faded. Previously, the average fan would spend less than £2 inside the ground on a typical match day, but now that figure is about £16, thanks to new facilities including the longest bar in Europe and an on-site microbrewery. Capacity has gone up from 36,000 at the club’s previous home of White Hart Lane to 62,000. The new stadium — built on land adjacent to White Hart Lane — has opened the door to a broad range of other events that have helped to push commercial income up from €117mn in 2018 to €215mn in 2022. Last year, Tottenham hosted US singer Beyoncé for five nights on her global Renaissance tour, two NFL matches, as well as rugby games and heavyweight boxing bouts. Money brought in from football has gone up too. Match day income is

Charlton takeover approved

The long awaited takeover of Charlton Athletic by SE7 Partners from Thomas Sandgaard has been approved: https://londonnewsonline.co.uk/se7-partners-obtain-efl-approval-for-charlton-athletic-takeover/ Charlton have had unhappy experiences with owners for over a decade, so how this works out will remain to be seen. There is certainly potential there, but will it be realised? This interview with Charlie Methven gives detail not available elsewhere: https://thecharltondossier.com/charlie-methven-on-the-record/

The Political Economy of Football V2

Search This Blog