Manchester City's recent seasons of profitability have led the club to a healthy PSR position
A Manchester City corner flat at the Etihad Stadium
(Image: Getty Images)
The summer spending of Liverpool has probably been the headline story of the current transfer window so far. Manchester City have been going about their business more quietly than usual.
The signing of Rayan Cherki for an initial £30.5m from Olympique Lyonnais, the £46.3m spent on Tijjani Reijnders from AC Milan, the addition of Wolverhampton Wanderers full-back Rayan Ait-Nouri for £31m, and the addition of Marcus Bettinelli for less than £2m have continued the rebuild under Pep Guardiola as City plot to wrestle back the Premier League crown from Liverpool next season.
But it should be noted that the business done this summer falls in the same financial year as the January flurry of activity that saw Omar Marmoush, Abdukodir Khusanov, Vitor Reis and Nico Gonazlez all arrive for a combined outlay of around £180m. That means spending in the last six months has closed in on the £290m mark.
City can afford it. The success of recent seasons, including the banner campaign of 2023/24 when the club won both the Premier League and UEFA Champions League, has resulted in seasons of profitability, which have meant that the club have not had to have any concerns when it comes to the Premier League’s profit and sustainability rules (PSR).
The club has players to sell to book some profit, with the likes of Yan Couto heading out, and the potential for others such as home-grown James McAtee to do the same for pure profit. Major wages such as Kevin De Bruyne’s have now created some flexibility on the payroll.
But what is City’s actual position when it comes to PSR, and how big could they actually go in the market before they need to be even remotely concerned?
Manchester City’s financial year for 2024/25 runs to the end of this month. For the 2022/23 and 2023/24 reporting periods they posted profits of £80m and £74m, respectively.
Premier League clubs are permitted to lose £105m over a three-year reporting period, with allowable deductions from those losses for such things as investment into infrastructure, the academy, the women’s team and community initiatives.
For 2022/23 and 2023/24, against that £105m figure, and with allowable deductions of £40m and £48m, according to analysis from football finance expert Swiss Ramble, City had a net positive PSR position of £241m.
Assuming similar allowable deductions for 2024/25, then City could feasibly post a loss of £350m and still be compliant.
The signings the club have made have, roughly, added around £58m to the club’s amortisation costs, which stood at £165m in 2023/24. But there will be deductions from that due to another year seeing a reduction in the book value for a whole 12 months of several players who still carry significant book value for City, as well as the long-term deal signed by Erling Haaland reducing his annual amortised cost significantly.
City have more room than any other club when it comes to being able to go out and spend, based on revenue generation, where they are Premier League leaders, and the club’s profitability in recent seasons. They have already started the significant reshaping of the squad some months back, but they have the ability to act should they wish. The ongoing legal case with the Premier League has not knocked them out of their stride.