Manchester City record £103m annual profit as CFG ownership group losses exceed £122m

City Football Group (CFG), the holding company that oversees the multi-club ownership group spearheaded by Manchester City, recorded a £122.2million pre-tax loss in the 2023-24 season, taking CFG’s combined losses since its 2013 founding to £972.8m. By contrast, across the same period, Manchester City recorded a pre-tax profit of £103.4m.

CFG’s losses have now cleared £100m in each of the last three seasons, though a £30.3m income tax credit reduced last season’s net loss to below that marker. John MacBeath, a board member at CFG, stated at the end of 2013-14 season that the board “expect the group to be profitable within the next three years.”

CFG has yet to make an annual profit or come anywhere close to doing so. Last season’s result did at least represent a stabilisation of sorts, with the pre-tax loss reducing by £4.7m (four per cent).

How did income compare between CFG clubs?

CFG’s pre-tax loss for 2023-24 came despite new record income for the group of £933.1m. CFG’s revenue, unsurprisingly, is principally attributable to Manchester City, whose £715m income in 2023-24 accounted for 77 per cent (2022-23: 81 per cent) of the multi-club group’s turnover. City’s annual income isn’t far shy of the total combined amount generated by CFG’s other entities since the group was formed in January 2013 (£865.8m).

The gulf to the next highest-earning club is significant: Girona generated income of just £59.6m while finishing third in La Liga last season. Below them, New York City FC of MLS contributed £46.5m, Brazil’s Bahia £31.3m, Italy’s Palermo £18.5m and France’s Troyes £11.2m.

The remaining five majority-owned clubs under the CFG banner generated turnover of less than £10m each. Elsewhere, City SoFive, which runs recreational football centres for children, added £24.5m to the top line.

What were CFG’s expenditures?

Overall, CFG’s income was up £56m on 2022-23, but it was mostly consumed by rising staff costs (up £46.1m), an increase in the group’s rather nebulous ‘other external charges’ (£41.7m) and heightened amortisation of transfer fees (£34.5m). Losses were slightly down on a year earlier due to the group recording player sale profits of £211.2m (2022-23: £133.3m).

In terms of wages, CFG’s staff costs were up to £664.3m, with non-Manchester City wages comprising £251.7m, a £56.4m (29 per cent) increase on 2023’s numbers. That reflects the growth of the group, as two clubs (Bahia and Mumbai City) bought towards the end of 2022-23 being accounted for in full this time around. City’s wage bill actually fell, in part due to no treble-winning bonuses being payable to the club’s squad this year.

The increase in CFG’s wage bill is explained by the group’s staffing numbers, which grew significantly. CFG employed an average of 1,543 commercial or administrative staff last season, a 56 per cent increase in a single year. At Manchester City, such staff only grew by 62, to 381 in 2023-24, meaning CFG’s workforce here rose from 670 to 1,162.

The accounts give little clarity on what was behind that level of growth. Some of it will be attributable to the group’s ongoing acquisition of businesses and clubs, including those two clubs acquired at the end of 2022-23, but those alone seem highly unlikely to cover such a large increase in administrative headcount. Despite being by far the biggest club in the multi-club group, City’s administrative staff make up only a quarter of this area of CFG’s staff numbers.

In a similar vein, what is included in CFG’s ‘other external charges’ has never been made clear, but at £316.1m they now comprise a quarter of the group’s cost base. £172.4m of that was booked in City’s accounts last season, meaning the Premier League champions were responsible for 55 per cent of this proportion of the group’s costs — a lower amount than City’s share of the group’s wage bill (62 per cent).

The bill footed by CFG for the legal costs of Newton Investment & Development tipped over the £30m mark last season. CFG and Manchester City chairman Khaldoon Al Mubarak, via a hacked email from a City lawyer in 2018, reportedly claimed he “would rather spend £30m on the 50 best lawyers in the world” than agree to a financial settlement or penalty from UEFA in respect of alleged Financial Fair Play (FFP) breaches.

How did CFG operate in the transfer market?

In terms of player trading, City’s success in this regard has been well-known for a while, but there are signs of fellow CFG clubs catching up (at least as a collective). £72.1m of last season’s player sale profits were attributable to clubs other than City, with the sales of Taty Castellanos and Gabriel Pereira by New York City FC and Santiago Bueno by Girona being the most notable contributors.

Castellanos joined Lazio from NYCFC in the summer of 2023 (Alberto Pizzoli /AFP via Getty Images)

Correspondingly, CFG has begun pump-priming the playing squads of clubs beyond Manchester. The group spent £322.2m on new players in 2023-24, £95.8m of it on players for clubs other than City. That was more than double the previous highest annual investment made in the playing squads of the other CFG clubs.

How has CFG’s funding strategy changed?

In terms of funding, CFG’s strategy has shifted in recent years. The group received £1.053billion in equity funding between formation and June 2020, with no debt taken on. That has since been turned on its head. Between July 2020 and June 2024, CFG received gross loan funding of £780.8m (a small amount of which has been repaid), while the only equity injection came in the form of £210m of preference shares issued last season.

A further £210m preference share issue was made in November 2024, meaning CFG received £420m in equity financing inside five months last year. All of that came via Newton Investment & Development, CFG’s majority shareholder, controlled by Sheikh Mansour.

CFG took out a $650m (£502m) loan with Barclays Bank, HSBC Bank and KKR Capital Markets back in July 2021, then added a further $270m (£209m) to that facility last June. That translated to a debt of £705m at the end of last June, though barely any of that is due for repayment soon, and the group has extended the maturity date of the overall facility to July 2030.

The upshot of such borrowing is CFG now pays significant interest to fund its operations. In the last three years, cash interest payments totalled £127.3m while, from a profit and loss perspective, financing costs made up half of last season’s £122.2m loss.

(Clive Brunskill/Getty Images)