Manchester City has reported its first profit in the seven years since Sheikh Mansour bin Zayed bought the football club in 2008.
The club made a £10.7 million (Dh60.6m) after-tax profit for the 2014-15 season thanks to record annual revenues of £351.8m and a reduced wage bill, according to its latest annual report, released yesterday.
City’s chairman, Khaldoon Al Mubarak, gave credit to Sheikh Mansour’s strategy, “predicated on long-term sustainability and the ongoing development of momentum year after year”.
He said: “We are now a profitable business with no debt and no outstanding restrictions. All metrics point to the right kind of accelerated commercial growth.”
The news is of huge significance amid ongoing scrutiny of football finances by Uefa, the governing body of European football.
For the previous season, 2013-14, when City were crowned Premier League champions, the club reported a loss of £22.9m even as turnover surged to £346.5m, which was the second-highest in the division, according to records at Companies House in Britain.
The loss had followed Uefa’s sanctioning of City last year for non-compliance with Financial Fair Play rules, denying the club £16m of Champions League revenue.
Last season’s profit comes as the club’s wage-to-turnover ratio fell to 55 per cent, from 59 per cent. Wages stood at £193.8m last season. In 2013-14, City had the second-highest wage bill in the Premier League at £205m.
In 2014-2015, commercial revenue increased 4 per cent to £173m and broadcast revenue rose 2 per cent to £135.4m, but matchday revenue decreased by 9 per cent to £43.3m partly because of expansion works at the Etihad stadium.
“Key drivers of increased revenue included the retention and recruitment of a variety of regional and global commercial partners,” according to City’s annual report.
It also made a £13.8m profit on player sales during the period. Under Uefa’s financial fair play rules, investment in stadiums, training facilities, youth development and women’s football are exempt from spending limits. Mr Al Mubarak said that a “central element” of the club’s successful strategy was the opening in December of its football academy.
The academy “has global resonance and that has significantly contributed to the ongoing growth of the Manchester City brand globally”, he said in the club’s annual report. The City brand is now attached to clubs owned in the United States, Australia and Japan.
Robert Haigh, the marketing and communications director at the Brand Finance consultancy, said City’s success was due to more than its footballing prowess.
“[Its] international, multi-club structure allows the City brand to be leveraged across the globe while simultaneously benefiting from synergies through association with its regional partners ranging from Nissan in Japan to Etisalat in the UAE,” said Mr Haigh.
Brand Finance ranks the top 50 most powerful brands in club football. This year it ranked City at fourth place with a brand valued at US$800m.
“The club’s plans to expand its stadium capacity will provide a healthy boost to match-day income in the future, allowing the brand to accommodate its growing fan base while increasing its appeal to new commercial partners,” said Mr Haigh. From the 2016 season, a record television rights deal worth £5.1 billion will kick in, providing Premier League clubs with a 71 per cent increase in domestic broadcast revenue.
However, in City’s annual report, Mr Al Mubarak also conceded that the performance on the pitch had been somewhat of a “disappointment” last season, with the club finishing second in the Premier League and failing to win a trophy in both domestic and European competitions.
This season, after spending a net £124.4m on marquee signings in the summer, including Raheem Sterling and Kevin De Bruyne, the club currently leads the Premier League table with eight games played.
malrawi@thenational.ae
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