Man City kick off new financial results season in solid but unspectacular fashion

By David Owen

September 14 – Just for a change it is the blue, rather than the red, side of Manchester that has kicked off the latest Premier League financial reporting season. A pity then that Manchester City’s newly-published 2017-18 results should be as solid and, well, unspectacular as much of the football played last year by Pep Guardiola’s record-breakers was irresistible and inspired.

Yes, as the publicity material trumpeted, the Abu Dhabi-owned Premier League title winners achieved the milestone of a first £500 million-plus turnover season. But this was only a 6% advance on the prior year – not really surprising in the second year of a three-season domestic TV deal.

And while the pre-tax profit jumped 100-fold, from a minuscule £104,000 to £10.4 million, this would still have been enough for only sixteenth place in the 2016-17 profits table. It should be remembered, moreover, that a shift of year-end meant that the year-ago period covered 13 months, with the one-off change resulting, in the club’s own words, in “an extra month of cost with minimal revenues”.

With non-UEFA broadcasting revenues nearly flat at just under £157 million, commercial income was the main driver carrying turnover to £500.5 million. This climbed 7% to £232.3 million. Matchday income rose nearly £5 million to £56.6 million.

Operating expenses continued to outstrip turnover at £525.7 million. It was a £39 million profit on player sales – which included those of Kelechi Iheanacho to Leicester City and Aaron Mooy to then newly-promoted Huddersfield Town – that reversed a £22.2 million loss at the operating level and carried the club well into the black at the bottom line.

Details of note included a surge from £335.5 million to £489.3 million in the balance-sheet value of intangible assets, ie players. Inflation in the market for top performers suggests that a similar phenomenon is likely to be observed in the finances of other leading European clubs.

The 13-month year in 2016-17 also helped City to record an approximately £4.5 million reduction to £259.6 million in aggregate payroll costs. Rather remarkably, this was in spite of a big increase in football staff numbers from 153 to 210. It is perhaps worth recording that wage costs were still below £200 million as recently as 2015-16.

With domestic TV revenues again likely to be fairly flat, perhaps the biggest opportunity for significant off-field improvement in the season now under way lies in doing better in the Champions League. In 2017-18, City were removed by Liverpool at the quarter-final stage.

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