Strong set of financial results for City

Manchester City’s on-pitch success was replicated off the pitch, as they set new club records for both revenue and profit in 2022/23.  City’s pre-tax profit nearly doubled from £42m to £80m, as revenue surged by £100m (16%) from £613m to £713m, which was also the highest ever generated in England, and profit from player sales rose £54m (80%) from £68m to £122m.

It is clear that City’s £80m pre-tax profit is an excellent performance, more than twice as much as the highest profit made by anyone in the previous season. This financial strength is very different from the large losses reported elsewhere, e.g. Chelsea £121m, Leicester City £92m and Newcastle United £73m.

However, there was a price to pay for this success, as operating expenses also shot up by £113m (18%) from £641m to £754m.

City have now reported a profit in every year since 2014/15, with the exception of the COVID-impacted 2019/20 season. Even including that sizeable £125m deficit, City are in the black to the tune of £52m for the last nine years.

City’s financial performance has dramatically improved since the early days of the current ownership, when they made massive investments resulting in the club posting some of the Premier League’s highest losses.

There was good growth in all three of City’s revenue streams. The largest increase was in broadcasting, which rose £50m (20%) from £249m to £299m, but there were also sizeable uplifts in commercial, up £32m (10%) from £309m to £341m, and match day, up £18m (32%) from £54m to £72m.

However, the treble winning season also drove large increases in the cost base, as City’s wage bill rose £69m (20%) from £354m to another English record of £423m.

Player sales

So City’s bottom line significantly benefited from profit on player sales, which rose £54m (80%) from £68m to £122m, easily a club record. This was mainly due to the big money sales of Gabriel Jesus and Oleksandr Zinchenko to Arsenal plus Raheem Sterling to Chelsea, though a decent amount was also related to academy graduates.  They have quietly accrued a lot of money from youth development, amounting to £171m in the last three years alone.

Player trading has become increasingly important to City, having made over a quarter of billion profit in the last three seasons, which is more than thIn revenue terms, City have been the leaders of the pack for the last three seasons, overtaking Manchester United in 2020/21.

Increasingly, it looks like there is effectively a Big Three in England in terms of revenue with United, City and Liverpool holding an advantage of more than £100m over the rest of this group.

City’s €131m Champions League revenue last season was much more than their rivals, none of whom got further than the quarter-finals. The next highest was Chelsea €94m, followed by Liverpool €82m and Tottenham €64m.

City have plans to expand the North Stand, so that the stadium capacity will increase to over 60,000. This will include a City Square fan zone, a new club shop, museum and hotel. The aim is to complete this during the 2025/26 season.

After remaining at around the £350m level for the previous three years, City’s wages surged £69m (20%) to another English record of £423m, driven by a big increase in bonuses linked to the treble, a few contract extensions and the arrival of Erling Haaland (for a relatively low transfer fee, but on high wages).  City’s £423m wages are now much more than any other English club. The next highest are Liverpool £366m and Chelsea £340m, though those are from 2021/22.

City have very largely become self-sufficient, only receiving £81m funding from their owners in the last eight seasons in the form of additional share capital: £23m in 2021 and £58m in 2018.

Of course, it was very different in the early years of the takeover by the Abu Dhabi United Group, when the owners pumped in a massive £1.2 bln to help the club reach today’s heights.

Premier League charges

Of course, any review of City’s accounts is incomplete without referencing the fact that the Premier League has referred a significant number of alleged breaches of its financial rules to an independent commission.

The scale of the accusation is unprecedented, adding up to more than 100 charges. The offences are alleged to have taken place over nine seasons from 2008/09 to 2017/18, while the Premier League also claimed that City have failed to co-operate with their investigation in the five seasons since then.

Basically, it is claimed that City have over-stated sponsorship revenue and under-stated costs in order to improve their bottom line, thus helping them to stay within FFP targets, either by boosting profits or reducing losses. In short, City have been accused of “cooking the books”.

This is obviously a very strong set of financials, featuring new Premier League highs for revenue, broadcasting and commercial plus club records for profit, player sales and match day.