Manchester City has reported its first profit in the seven years since the football club was bought by Sheikh Mansour bin Zayed in 2008.
The club made a £10.7 million after-tax profit for the 2014/2015 season thanks to record annual revenues of £351.8m and a reduced wage bill, according to its latest annual report, released Wednesday.
City’s chairman Khaldoon Al Mubarak, gave credit to Sheikh Mansour’s strategy, “predicated on long-term sustainability and the ongoing development of momentum year after year”. “We are now a profitable business with no debt and no outstanding restrictions,” said Mr Al Mubarak in a statement.
“All metrics point to the right kind of accelerated commercial growth.”
The news is of huge significance amid ongoing scrutiny of football finances by European governing body Uefa.
For the previous season, 2013/2014, when City were crowned Premier League champions, the club reported a loss of £22.9m even as turnover surged to £346.5m, which was the second highest in the division, according to records at Companies House in the UK.
The loss had followed Uefa sanctioning City in 2014 for non-compliance with Financial Fair Play rules, denying the club £16m of Champions League revenue.
Last season’s profit comes as the club’s wage to turnover ratio fell, to 55 per cent, from 59 per cent. In 2013/2014, City had the second highest wage bill in the Premier League at £205m.
Mr Al Mubarak said that a “central element” of the club’s successful strategy was the opening in December of its football academy.
The academy “has global resonance and that has significantly contributed to the ongoing growth of the Manchester City brand globally”, said Mr Al Mubarak in the forward to the club’s annual report. The City brand is now attached to clubs owned in the US, Australia and Japan.
Robert Haigh, marketing and communications director at consultancy Brand Finance, said that City’s success is down to more than its footballing prowess.
“[Its] international, multi-club structure allows the City brand to be leveraged across the globe whilst simultaneously benefiting from synergies through association with its regional partners ranging from Nissan in Japan to Etisalat in the UAE,” said Mr Haigh.
Brand Finance ranks the top 50 most powerful brands in club football and in 2015 it put City fourth with a brand valued at US$800m.
“The club’s plans to expand its stadium capacity will provide a healthy boost to match-day income in future allowing the brand to accommodate its growing fan base whilst increasing its appeal to new commercial partners,” said Mr Haigh.
From the 2016 season, a record TV rights deal worth £5.1 billion, will kick in, providing Premier League clubs with a 71 per cent increase in domestic broadcast revenue.
However, in City’s annual report, Mr Al Mubarak also conceded that the performance on the pitch had been somewhat of a “disappointment” last season with the club finishing second in the Premier League and failing to win a trophy in both domestic and European competitions.
This season, after spending a net £124.45m on marquee signings in the summer, including Raheem Sterling and Kevin De Bruyne, the club currently lead the Premier League table with eight games played.