Manchester United's Cristiano Ronaldo stands dejected following the Premier League match at Old Trafford, Manchester. Picture date: Saturday November 6, 2021. (Photo by Martin Rickett/PA Images via Getty Images)
By Philip Buckingham 7h ago 157
Manchester City successfully knocked Manchester United off their perch long ago.
Four Premier League titles have been won by the boys in blue since their neighbours at Old Trafford were last crowned champions in 2012-13 and few would bet against that number growing to five in May.
The 22 points that separate the clubs in the table just after the midpoint of this season is a telling measure of City’s modern domination and now, after a decade spent closing the financial gulf to United, they can now boast the better financial results to boot.
City’s annual accounts, published in brief yesterday, revealed a record-breaking year at the Etihad Stadium.
Total income for 2020-21 stood at £569.8 million in a campaign that ended with defeat to Chelsea in the Champions League final. United, meanwhile, were left trailing in their wake with annual revenues totalling £494 million.
This battle of the balance sheets will not be one to sing about when the clubs next meet on the first weekend in March but they do underline City’s status as the rising force of European football.
United, for all their commercial clout and worldwide following, have finally been bettered by their noisy neighbours. The nouveau riche are now top of the English tree.
How has the shift in power happened?
City’s financial growth over the last decade has been unparalleled. A club that failed to even make Deloitte’s Football Money League top 20 for 2006-07, lagging behind Celtic and Marseille, has been transformed since the takeover of Sheikh Mansour bin Zayed Al Nahyan with Abu Dhabi’s millions in 2008. From an annual turnover of £87 million in 2008-09 to almost £570 million last season, income has gone up more than six-fold in 12 years.
Season on season, there has been success-driven growth, gradually propelling City up towards Europe’s elite. United had been the only English club left to catch in recent seasons but a new frontrunner emerged in 2020-21.
City’s run to the Champions League final was the undoubted driver for a changing of the guard.
KPMG, the renowned accountancy firm, says that was worth £108 million in prize money from UEFA, while a quirk of timing only increased broadcast streams in the club’s accounts.
The 2020-21 financial year included City’s participation in the knockout stages of the 2019-20 Champions League. Real Madrid were beaten in the last 16 before Lyon upset Pep Guardiola’s side in the quarter-finals, which were pushed back to a post-domestic season mini-tournament in the August by the COVID-19 pandemic.
Then there was another Premier League title won last season, as well as the almost-annual Carabao Cup final success and a run to the semi-finals of the FA Cup. All of that combined to give City a broadcast income of almost £300 million across 12 months, dramatically up from the £190 million of disrupted, extended 2019-20.
Commercial revenue was also up to a new high of £271 million, according to the club’s accounts.
An army of 31 global partners, including a host associated with the club’s Abu Dhabi ownership, now work with City and allow them to eclipse United’s reduced commercial income of £232 million.
Put it all together and there might not be a club in world football to trump City’s accounts, which showed a small profit of £2.4 million after the brutal losses of £126 million in the previous calendar year.
“From a revenue perspective, it is true that Manchester City have leapfrogged Manchester United,” says Andrea Sartori, KPMG’s global head of sports and author of the European Champions Report 2022.
“And at the moment, they are the highest revenue-generating club in Europe and the world. They have higher revenues than Barcelona and Real Madrid, higher than Bayern Munich — as we’ve shown in the report.
“We still don’t have all big clubs’ numbers. Liverpool haven’t published, but I would be astounded if Liverpool can surpass them (City). Paris Saint-Germain could be a contender in that sense but, as of now, with all the available information, City are not only on top of United but also the rest of Europe.”
Has the pandemic done anything to skew the figures for 2020-21?
Undoubtedly. And in a big way. A season spent playing behind closed doors did an awful lot more to hurt Manchester United than it did Manchester City, and makes it a slightly misleading picture.
In any normal campaign, United can expect to make twice City’s match-day revenue.
Take the 2018-19 season, for example, and it was £111 million at Old Trafford up against £55 million over at the Etihad.
Strip all that back and it is clear that United, who boast a home with over 20,000 more seats than City’s, were left far more exposed by the pandemic. Only now, with Old Trafford back at full capacity, are United able to call upon the income streams they used to take for granted.
“COVID-19 hit United far harder than it hit City,” says Kieran Maguire, the football finance expert. “United would normally make around £110 million from ticket sales in a season. City typically get half of United’s match-day revenue because they’ve got a different fan profile: Fewer corporate fans, fewer international fans.
“Put that all together and it’s United hit hardest by playing games behind closed doors.”
So, City were helped to catch United by the pandemic. But how have they now managed to overtake them in terms of commercial income?
This is where the greatest change has taken place in the last decade.
United have always traditionally been the most attractive option to sponsors. They have the history, the fanbase and the appeal to ensure commercial backers are never in short supply. Brand United sells itself in the 21st century.
City, meanwhile, had traditionally been the poor relations of Manchester. Go back to when Sheikh Mansour first pitched up and their commercial income was just £23 million a year. Or a third of United’s.
Keeping pace with United, the savvy market leaders, was an enormous task but City can now claim to be the Manchester club out in front. While United’s commercial revenue fell from £279 million to £232 million last season, City’s was climbing from £246 million to £271 million.
Those with a cynical eye, of course, will point towards City’s commercial partners and where in the world they are based. They have Etihad Airways as shirt sponsors, and also have link-ups with Visit Abu Dhabi and Expo 2020 Dubai.
And they keep coming.
There are also partnerships with Masdar, Abu Dhabi’s renewable energy company, and Etisalat, the Emirati-based telecommunications firm.
There is little question City have maximised opportunities with related parties in the UAE but their on-field success has also brought in significant sums from the likes of Nissan and Nexen Tyres. Corporate sponsors typically pay additional performance-based sums and reaching the club’s first ever Champions League final, as well as winning another domestic title, will have inevitably brought an uplift.
United saw a year-on-year fall in commercial revenue but they will point to the make-up of their sponsors, typically blue-chip firms that were exposed to the pandemic, as a reason for the stumble. Theirs, as a floated company, is a very different model to City’s and one that suffered.
There was a variation agreement with General Motors, whose Chevrolet brand was United’s shirt-front sponsor last season, struck in August 2020,; revised deals with other partners, taking into account disruption to TV rights, also had a further impact on United’s commercial activity.
At a time when City’s commercial income was seemingly immune to COVID-19, United were left to count the cost of a £47 million shortfall year on year.
“We are proud of the strength and resilience that our club has shown through the pandemic, despite the significant loss of revenues from normal levels while matches were being played behind closed doors,” said a United spokesperson. “Our commercial business remains industry-leading, as demonstrated by the series of new globally-recognised, third-party partnerships and renewals announced over the past year.”
If United have lost their place as England’s richest club, what are the chances of them reclaiming that status this season?
Much will depend on the fortunes of City and United over the 2021-22 season’s final five months. Although City are the overwhelming favourites to retain their Premier League crown, both clubs have qualified for the Champions League knockout phase and will hope to go deep in that competition.
United have already bettered last season’s group-stage exit by reaching the last 16, but City will have ambitions to go one step further than last season and win their first European Cup.
How big a slice of UEFA’s broadcast revenues the two clubs receive will have a significant bearing on who comes out on top in the next set of accounts, but United can at least expect to close the gap now they have Old Trafford back to full capacity. Every sold-out game there is worth in the region of £3 million to them.
Financially, the inability to host fans during the pandemic hit Manchester United harder than neighbours City (Photo: Martin Rickett/PA Images via Getty Images)
“For Manchester United, the impact of playing in closed stadia was bigger,” adds KPMG’s Sartori. “We all know that the Etihad Stadium is much smaller and does not attract as many fans as Old Trafford. Manchester United’s match-day revenue has been double Manchester City’s. A season playing without fans was far more negative for United than City.
“It remains to be seen if City can maintain this. Manchester United have a history of 30 years in being in the top three richest clubs in Europe.
“Getting to the final of the Champions League was the big differentiator for City in 2020-21. Should they reach the final again, or go and win the Champions League, this will help to keep the top place.
“If they were eliminated at the earlier stages, I would presume that would change things. But that is always the case — sporting success, COVID-19 aside, makes the difference.”
Expect United to make up lost commercial ground, too.
Their new shirt sponsorship deal with TeamViewer is considered to be among the largest of its kind, while the re-signing of Cristiano Ronaldo after 12 years away with Real Madrid and Juventus brings its own guaranteed yield.
To be even considering City as financial rivals to United, though, indicates a remarkable feat.
“United’s total income in 2009 was £278 million,” says Maguire. “City’s was £87 million — United were almost treble that of City. To have eliminated that over the course of 12 years is incredible.
“But United can reclaim that number one spot with that match-day revenue advantage. City will always be playing catch-up there. But a lot will depend on how the two clubs perform in the Champions League knockout stages.”
(Top photo: Martin Rickett/PA Images via Getty Images)
