Five years on from the first COVID lockdowns in the UK, the MEN looks at how it impacted Manchester City
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Manchester City's Etihad Stadium
Manchester City's Etihad Stadium(Image: Liverpool FC via Getty Images)
It is five years this week since the first COVID lockdowns were announced by the UK government as the pandemic took hold across the globe.
For football, a sport that attracts millions to congregate in stadiums every week to watch their favourite teams, the impact was hugely significant, with no club untouched by the effects of the pandemic and the shuttering of stadiums and physical retain in 2020, and the season played behind closed doors in 2020/21.
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Manchester City have become a financial juggernaut in European football, their success on the pitch ensuring the steep incline of revenue into the football club over the past decade. City fared better than many during the pandemic but still felt the financial pain, but to what extent?
In the last decade, City have posted just one loss-making season, which unsurprisingly was the significantly impacted 2019/20 season. For that period, City posted a loss of £125million, the eighth largest in Premier League history. Since then, pre-tax profits have been £5million (2020/21), £42million (2021/22), £80million (2022/23) and £74million (2023/24).
During the 2019/20 season, which was paused before resuming in front of empty stadiums, City’s loss was largely attributed to the steep decline in broadcast revenue, falling 25% from £253million to £190million. Matchday revenue fell £19million in that period, but heavy investment compared to the previous season, where the likes of Rodri, Joao Cancelo, Angelino and Pedro Porro all arrived, meant that the wage bill shot up from £315million to £351million, while amortisation rose £19million from £127million to £146million.
All these additional costs arrived in a season that was unexpectedly and significantly impacted by COVID, resulting in the financial performance that was seen. It also didn’t have the benefit of additional revenues from a deep run in the Champions League, or additional merit payments that had been there previously from winning the Premier League.
But City’s success on the pitch, and their strong player trading model during the period, meant that the rebound from the pandemic financially has been far swifter than most, plus the fact that they already had long-standing commercial deals that were already in place and did not need renegotiating during such economic uncertainty. Manchester United, for example, did have that issue, and it cost them significantly financially to see Chevrolet exit and replaced with the little-known TeamViewer, a deal that would last less than two years into a five-year arrangement.
The following season, a campaign played behind closed doors, was of course financially impactful, with matchday revenue just £700,000 for the year compared to £41.7million the previous campaign.
But City won the Premier League in 2020/21, while reaching the final of the Champions League, something that would have delivered around £100million to the club. That additional revenue, allied with the fact the club managed to rake in £97million of sales against £197million of spend, also keeping the wage bill on a near horizontal line, rising just £4million to £355million in 2020/21 before falling £1million the following season, meant that the bruising nature of the pandemic on clubs who had a lack of success, a burdensome wage bill and a flawed transfer strategy was felt far more keenly than it was for City and their owners, City Football Group.
City leaned on their cash at hand in 2019/20 to a significant level, with the cash balance at the club dropping from £130million in 2018/19 to just £18million as the club continued to have to cash flow the business and meet financial obligations at a time when cash flow was significantly impacted. The following year it climbed to £45million and then £79million in 2023, before dropping to £54million in the most recent set of accounts.
The lack of major debt hanging over the club also allowed them to have less concerns than others as they weren’t lumbered with meeting interest and principal repayments as debt was of the lowest in the Premier League at £65million, a figure that has remained fairly flat and sat at £63million in the most recent accounts.
Manchester City’s robust financial state has been facilitated by their success on the pitch that started to arrive before the pandemic hit, and the lucrative prize money that arrives with such success, and having engaged in their heavy spending earlier and been able to create a player trading model that kept net spend at around the £100million mark, ensured that they were able to move through the gears more quickly than most of their rivals, with City and Liverpool faring the best among the so-called ‘big six’.
It should be no real surprise that the two strongest forces post-COVID have been those two teams, and it remains the case that those two clubs are the best placed financially heading into the next five years, although that is predicated on continued on-pitch success.