City flourish off the pitch

Manchester City’s on-pitch success in 2023/24was replicated off the pitch, as they delivered a sizeable £74m pre-tax profit, albeit down from the prior year’s £80m. Revenue slightly improved by £2m from £713m to £715m, which was the highest ever generated in England, while profit from player sales rose £17m (14%) from £122m to £139m, a new club high.

However, this was more than offset by operating expenses growing £26m (3%) from £754m to £780m, while other operating income fell £1.0m to £4.5m.

There was growth in match day, which rose £4m (5%) from £72m to £76m, and commercial, which increased £4m (1%) from £341m to £345m. However, broadcasting fell £4m (2%) from £299m to £295m, due to a less successful run in the Champions League.

City’s revenue has increased by more than a third (£180m) in just five years from the 2019 pre-pandemic level of £535m. All three revenue streams have grown, but the charge has been led by commercial, which rose 52% (£118m) and now accounts for 48% of total revenue.

City’s commercial income rose £4m (1%) from £341m to £345m, another club high, thanks to new sponsorship agreements, growth in the value of existing deals and record kit sales. Revenue was also boosted by an Asian pre-season tour plus the Netflix six-part docuseries, “Together: Treble Winners”.

City are the first English club to break through the £700m barrier, having the highest revenue in the Premier League for the last four years. Their £180m growth since 2018/19 has comfortably outpaced their rivals, though only United of the Big Six have so far published accounts for 2023/24.

It is clear that City’s £74m pre-tax profit is an excellent performance, only surpassed by Brighton’s £133m in the previous season. This is very different from the large losses reported elsewhere, especially Manchester United’s £131m last season, while no fewer than ten clubs lost more than £50m in 2022/23.  

Player trading

City’ superiority was mainly due to £100m more profit from player sales, though revenue was also £53m higher.  City’s bottom line significantly benefited from profit on player sales, which rose £17m (14%) from £122m to £139m, a new club record for the second year in a row.  City’s £139m profit from player sales is actually the second best result ever in the Premier League, only surpassed by Chelsea’s £143m in 2019/20. Player trading has become increasingly important to City, having made well over £100m of profit in each of the last two seasons with £122m in 2022/23 and £139m in 2023/24.

City earned €109m after reaching the Champions League quarter-finals, where they were eliminated by eventual winners Real Madrid. This comprised a €15.6m participation fee, €38.5m prize money, €33.0m UEFA coefficient payment and an estimated €22.3m from the TV pool.   Even after last season’s decrease, City’s €109m European TV money was still much more than the other English clubs. The next highest in the Champions League was Arsenal €93m, followed by Manchester United €60m and Newcastle United €34m.

In fact, despite City’s much publicised issues with UEFA, the Champions League has been a nice little earner, bringing in €567m in the last five years. This has been a major differentiator for the Citizens, as the next highest income in this period was Liverpool’s €399m, i.e. a full €168m less.

City’s average attendance increased from 52,774 to 53,346, but this was still only the sixth highest in the Premier League, around 20,000 below United 73,534, while three London clubs had crowds above 60,000 (West Ham, Tottenham and Arsenal). The club noted that it had sold over a million tickets with a stadium occupancy rate of 99.7%, giving the lie to the “Emptihad” insult from rival fans.

Wage bill

City’s wage bill fell £10m (2%) from £423m to £413m, as performance bonuses were lower than the previous treble winning season. However, this was offset by a significant 91 increase in headcount from 520 to 611 (football staff up 29, commercial/administration staff up 62).

City’s £413m wages are still the highest in the Premier League, just ahead of Chelsea’s £404m, followed by Liverpool £373m and Manchester United £365m, with a big gap to Tottenham £251m and Arsenal £235m. All the comparatives are from the 2022/23 season with the exception of United.

City’s 58% wages to turnover ratio is one of the best in the Premier League, only beaten by Tottenham 46%, Arsenal 51% and Manchester United 55%.

City have spent £970m on player recruitment in the last five years, which is undoubtedly a great deal of money. However, this was comfortably beaten by Chelsea’s £1.7 bln, while Arsenal and Manchester United were at a similar level to City with £981m and £918m respectively.

Much of the club’s available funds will be used on the £300m expansion of the Etihad Stadium, “as part of a wider project to develop a best-in-class fan experience and year-round entertainment destination at the Etihad Campus.”As a result, City invested £70m into infrastructure in 2023/24.

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

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

The 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 130 charges (as opposed to the widely reported 115). 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 had failed to co-operate with their investigation.

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 PSR targets, either by boosting profits or reducing losses. In other words, City have been accused of “cooking the books”.

City reference this investigation in a note in the accounts that reiterates their confidence that they will be cleared (repeated from the previous year): “In February 2023, in response to the charges, the club issued a public statement that it welcomes the review of this matter by an independent commission, to impartially consider the comprehensive body of irrefutable evidence that exists in support of its position.”

The club said that it “aims to be profitable in combination with on-pitch success”, though it did acknowledge that “significant revenues are dependent upon strong team performances in the Premier League, domestic and European competitions.”

Therefore, their problems this season, especially in the Champions League, could have implications on their finances, though it would be a brave man that bets against Pep Guardiola turning the ship around, especially with the huge resources at City’s disposal.  However, given an ageing squad, player purchases in January are essential.