Manchester City have been able to spend heavily in the current financial year, and can continue to do so
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Pep Guardiola, head coach of Manchester City, speaks during the Press Conference ahead of their FIFA Club World Cup 2025 match between City and Wydad AC
Pep Guardiola ahead of the Club World Cup match between Manchester City and Wydad AC
For a serial winner like Pep Guardiola, last season would have been a chastening experience for the Manchester City boss.
A third-placed finish in the Premier League and an exit at the play-off knockout phase of the UEFA Champions League fell below the lofty standards that Guardiola has set at the Etihad Stadium over the years, and the determination to put things right next season can already be seen through the club’s approach to the summer transfer window.
In January some of the pieces had started to arrive, with the decision to make moves for Omar Marmoush, Vitor Reis, Nico Gonzalez and Abdukodir Khusanov all indicative of the club needing to do some major work in the summer.
But such is the financial strength of Manchester City, built up through achieving record-setting revenues thanks to player success, and some superbly savvy player trading, that they are still in the same financial year and have added Rayan Cherki, Rayan Ait-Nouri, Tijjani Reinders and Marcus Bettinelli.
The total spend across the current financial year for City stands at around €370m (£316m), not all of that guaranteed, with some of the fees including add-ons.
But City had given themselves the opportunity to spend heavily and not be concerned about things such as the Premier League’s profit and sustainability rules (PSR) due to their headroom being so large.
Working on the basis that around £275m would be in guaranteed fees, then that amortises at £55m per year on the books. City’s amortisation charges for 2023/24 were £165.1m, below Manchester United and Chelsea.
But while a significant sum will be added, the club have seen the book value of a number of players decrease over the last year, as well as removing the book value of Julian Alvarez and Joao Cancelo, both sold for profit.
The sales of players who held little or no book value, such as Tommy Doyle, Taylor Harwood-Bellis, Yan Couto and Sergio Gomez mean that the club has booked more than £50m in pure profit over the past financial year, and that is money that can be accounted for immediately. It is money that almost accounts for an entire year's amortisation costs for their signings since July last year.
City also have more players to trade, and ones that hold book value where they feel they can make money, Jack Grealish being one. There is also the possibility that players who represent pure profit, such as James McAtee, could depart into the new financial year, which clicks into gear from July 1.
Manchester City still have the ability to spend into the new financial year due to several years of success and excellent player trading. The model has allowed them to invest on the back of disappointment, and at a time when there was a necessity to replace some of the players that had been so instrumental but were facing competitive decline. That is the model working as intended.
City will still be alert in the market, and the bad news for other clubs is that they have the muscle to act and to not be concerned over rule breaches. They have a strong wages to revenue ratio that falls beneath the cap, and they have incredibly robust revenue streams, not to mention at least £50m from this summer’s FIFA Club World Cup.
It will be a rebuild that doesn’t put them in a tough spot, and one that won’t have an enormously detrimental impact on what their balance sheet looks like.