Sports Business : Man U pips Premier League giants Manchester City off the field

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Manchester City is the team to beat in the Premier League championship. The league leaders are yet to lose a game in their 12 outings this season. But the giants are pinned down by their city rivals Manchester United yet again on the financial pitch. But City is cruising fast to bridge the gap.

Manchester City has usurped their cross-town rivals Manchester United on the pitch for the past ten years since ever since the Red Devils’ acquisition by Abu Dhabi United Group in 2008. The point was emphatically proved yet again last weekend with ManchesterCity’s 3-1 derby win.

Off the pitch, it is a complete reversal of the order. Manchester United are the winner in the business of football, according to the report KPMG Football Benchmark.

“Considering operating revenues, both clubs show an impressive increase between the 2011-12 and 2017-18 seasons: +76% for Manchester United FC and +108% for Manchester City FC. This higher percentage increase allowed the Manchester City to reduce partially the existing gap with the Red Devils; indeed, while in the first season under analysis Manchester United registered revenues 39% higher than Manchester City, in the last season such a gap was reduced to 17%,” says the report.

“These figures are a result of the wider international appeal gained by Manchester City FC in recent seasons, which is especially reflected in broadcast (+129% over the seven seasons), thanks to constant UEFA Champions League participation unlike the Red Devils, who have suffered fluctuating on-field performance, and in their commercial income streams (+109%), due to the numerous new partnerships secured both at regional and global levels. Meanwhile, the matchday improvements of City (+52%) are mainly due to the capacity extension of the “Etihad Stadium” in the 2015-16 season.”

But where Manchester United are losing in terms of performance revenues, they significantly ahead in terms of matchday and commercial revenues. Old Trafford sells out its 75,000 capacity every home game compared to City’s 54,000 average attendance last season.

Looking at costs – a hot area for Manchester City in light of the financial revelation of the recent week and their battle to stay within FFP rules – the report finds an increasing trend over the past seven seasons with the City having jumped 23% and United a massive 75%.

Also, Read: UEFA warns to reopen FFP investigation against Manchester City

“One remarkable finding is the huge reduction in staff costs/operating revenue ratio in the period under analysis for the Cityzens, whose ratio decreased from 87% in the 2011/12 season to a more sustainable value of 52% in the past season; meanwhile, the Red Devils’ ratio remained stable at around 50%, still below their rivals,” say the authors.

The report examine the financial investment made by both club and finds City’ losses were €206 million in the first three years but dropped to €151 million for the next seven. In contrast, Man Utd made €285 million of net profit in the same period.

The report concludes that “a gap between the two Manchester clubs still exists. However, starting from the first Premier League title won under the new ownership (2011/12), Manchester City FC have been able to keep on growing, reducing the gaps from their city rivals and consolidating their position in the football elite. In the future, the challenge is surely on the pitch.”

CLICK HERE to read the full report.


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