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.

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The Political Economy of Football V2

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