By David Owen
April 7 – Premier League champions-elect Manchester City plunged heavily into the red during the covid-impacted 2019-20 season, posting a king-sized pre-tax loss of £125.1 million.
The result pushes up the cumulative 2019-20 loss by Premier League clubs, with 15 of the 20 having reported, to an eye-watering £725 million-plus. With some big clubs still to publish, an overall loss of a stunning £1 billion remains a distinct possibility.
The 2020-21 financial year should be better, with the end of the 2019-20 season shunted into it for most clubs. But the health of the summer transfer market, and hence the accurate valuation of players, remains a major questionmark for the future.
Abu Dhabi-owned City did have a landmark year in one respect: its payroll costs steamed far beyond local rivals Manchester United to £351.4 million, from £315.3 million. This amounted to an increase of just over 11% in a season in which City ended up winning “only” the League Cup.
Judicious summer transfer dealings, notably the arrival from Benfica of defender Rúben Dias, have helped to restore the club’s previous aura of domestic invincibility under Pep Guardiola, along with the imperious form from midfield of Kevin De Bruyne, İlkay Gündoğan and Phil Foden.
With covid taking its toll and the season’s finale delayed, revenue slid back below the £500-million level to £478.4 million from £535.2 million. Comfortably the biggest contributor was “other commercial activities” at £246.3 million, up from £227 million. Broadcasting revenue dropped from £253.2 million to £190.3 million and matchday revenue from £55 million to £41.7 million.
The club made the point that for “full context”, the new results should be “viewed alongside” 2020-21 figures, adding that this had been “recognised by UEFA”. It said that changes to the European body’s licensing and regulatory approach would “assess the combined results of both seasons”. City were “confident” that their results for the two-year period would “fall within UEFA’s Financial Fair Play requirements”.
The club also noted that “a provision for a €10 million fine from UEFA has been made within these statements”.
Notes to the accounts disclosed that short-term trade debtors at the year-end had more than tripled to £150.1 million, while short-term debts to group undertakings jumped from less than £2 million to £29.3 million. Conversely, other short-term loans were cut from £7.5 million to zero.
The accounting treatment of the club’s 250-year lease on the Etihad stadium has also changed. The finance lease, with a net book value of £84.3 million, has been reallocated and recognised as right of use assets.
Inflated by £145.8 million in amortisation of players’ registrations, operating expenses reached £641.2 million and the operating loss £159.6 million. A £39.8 million profit on player sales was booked, similar to the prior year.
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