English Premier League football club Manchester City posted a net loss of £126m (€147m/$174m) for the 2019-20 season but expects to return to profitability in 2020-21 as the financial impact of Covid-19 begins to lessen.
The 2019-20 season was paused last March as the pandemic took hold, with the campaign ultimately concluding in the 2020-21 financial year. When the Premier League did return in June, matches were held behind closed doors and City cited a loss in matchday revenue as a reason for its overall 11-per-cent reduction in revenues to £478.4m.
City also noted that the sale of German international Leroy Sane to Bundesliga club Bayern Munich for an initial £44.7m did not appear in the 2019-20 accounts as the transfer went through in July. The club also pointed to the refunding of season card costs and reductions in broadcasting revenues as factors for the £126m loss.
Despite the loss, City said it expects to “immediately return to profitability” in 2020-21 as a result of a less Covid-impacted season and deferred 2019-20 revenues. City is predicting normalised losses for each of the 2019-20 and 2020-21 seasons to be less than £60m per year.
Manchester City chief executive Ferran Soriano said: “Clearly, the 2019-20 accounts in isolation are not the best representation of the reality of the season with delayed player trading and numerous games being played after June 30, 2020, the revenues from which will be accounted in the 2020-21 period. A better financial picture of the Covid years will be provided at the end of the 2020-21 season, when the two seasons are combined and normalised.”
City said that it continued to meet its full financial commitments despite the problems posed by the pandemic. City had been facing exclusion from the Uefa Champions League last year over allegations the club broke Financial Fair Play (FFP) rules by overvaluing sponsorship deals, but the Court of Arbitration for Sport (CAS) overturned the ban in July.
Last month, Andrea Traverso, Uefa’s director of research and financial stability, said that the governing body would look to rework its FFP rules in light of the difficulties facing clubs during the Covid-19 crisis. The new rules, which would be considered before the end of the year, are set to focus on the wage levels of clubs and transfer fees – as opposed to the current break-even measure, which is set to be reviewed.
City won the Carabao Cup in the 2019-20 season but finished second behind Liverpool in the Premier League and lost in the quarter-finals and semi-finals of the Champions League and FA Cup, respectively. The club is still in all competitions this season and sits 14 points clear at the top of the Premier League table.