To paraphrase Benjamin Franklin, there are few certainties in life except death, taxes and
Manchester United generating more revenue than any other Premier League club. But this truism
has been recently shattered by United’s noisy neighbours from the Etihad, after Manchester City
published their financial results for 2020/21. When the Premier League commenced in 1992,
the money generated by all clubs in the competition in its inaugural season was £205
million from 22 clubs, less than Leicester City earned by themselves in 2020/21. Manchester United
won the Premier League in that first season by ten points. United also had that season a significant
advantage in terms of revenue, generating 44% more income over the second highest earning team,
Liverpool, and more than twice as much as Premier League runners up Aston Villa.
Manchester United had significant advantages at the start of the Premier League over other
clubs. Old Trafford had a capacity of 44,000 in 1992/3 and attendances averaged just 35,000,
second to Liverpool that season, so the club had matchday revenues to match.
Where United excelled however was in respect of commercial income. Their income from this
source was £10.7m, more than twice that of Arsenal and four times that of Liverpool.
Manchester United was the most desirable brand in English football and this was reflected in
their ability to attract corporate guests to hospitality and extract maximum value
from sponsors such as Sharp and Umbro, with United selling more shirts than any other team.
With the reward of being in the Champions League in 1993/4 Manchester United were able to sign
Roy Keane for a record fee and attendances at Old Trafford increased to average over 44,000,
leapfrogging Liverpool by almost 6,000 fans. The increase in attendances combined with regular
success in qualifying for the Champions League meant that United had a significant advantage over
their Premier League rivals as more money in meant more capacity to pay high wages and transfer fees.
This created a virtuous circle with the money invested in talent on the pitch
generating continued interest in the club from the sale of tickets, commercial partners
and broadcasters, which allowed the club to invest in talent which brought in the revenues.
Only once in the history of the Premier League has the club who have not had a top
three wage bill won the trophy, and that was Leicester City’s 5000/1 achievement in 2016.
Manchester United therefore generated twice as much income as any other club
in the Premier League on six occasions in the first eight years of the competition,
winning the Premier League on six occasions too. The Premier League broadcast deal was another
contributory factor in United keeping ahead of the competition.
Under the distribution model agreed by club executives, half of the domestic broadcast
rights were split evenly between clubs, with the other half being linked to the number of
times a club was chosen for live broadcasts, and also the final league position. Clubs finishing
bottom of the Premier League would receive one share of the ‘merit payment’ pot of money,
the club second bottom two shares and so on until the winners received 20 shares. With Manchester
United finishing no lower than third until 2013/14 the club were always recipients of high merit
payment shares and also benefitted from being one of the most popular picks for broadcasters.
By the time the Glazer family acquired Manchester United in 2005 via a leveraged
buyout, which saddled the club with £700 million of debt, the club had generated
over half a billion pounds in revenue. Nevertheless, the Glazers felt that the club
had failed to realise its potential as a brand. Manchester United’s commercial team started to
focus on regional and national partner deals for individual products, and these proved popular as
corporate companies wanted to share the attention that Manchester United generated from their
on-field success and global fanbase. As a result, commercial income increased almost fivefold in
the first decade of the Glazers’ ownership. At Manchester City, in the first few years of
their Premier League existence, things were much tougher. The club was relegated twice in the first
decade of the Premier League and even had the ignominy of a season in the third tier. In the
boardroom a succession of owners failed to convert promises into sustained improvement on the pitch.
Even a move to the new City of Manchester stadium in 2003 did not make a significant difference as
the club failed to compete in Europe’s premier competitions. This, combined with a dedicated
local fanbase who were familiar with lower ticket prices rather than the benefits of tourist fans
willing to pay higher sums meant it was difficult to generate the additional revenue to compete.
City were therefore generating about a third of the revenue of Manchester United
until their world changed in September 2008, when Sheikh Mansour bought the club.
Within a year the club was being sponsored by Etihad Airways
and shortly after the stadium naming rights were acquired by the same organisation.
City were now seen as genuine rivals. The funding meant that City incurred large losses
as they invested heavily in playing talent, but in the days prior to Financial Fair Play these
losses came with no penalties, provided the owner was willing to underwrite them.
City finished 3rd in the Premier League in 2010/11, qualifying for the Champions League,
and this helped the club to sign more lucrative sponsor deals,
often in the Middle Eastern market. By the time Manchester City won the
Premier League in 2012/13, revenue had more than tripled in less than five years,
and the gap between the two Manchester clubs had fallen from £192 million to £92 million.
Winning the Premier League once was great for City, but in order to attract more lucrative deals
the club had to keep its popularity with sponsors by creating more of a dynasty. The recruitment of
Pep Guardiola in 2016 helped achieve that, preceding a consistent flow of silverware.
Meantime, things at Old Trafford were becoming more modest, both on and off the pitch. Vice
Chairman Ed Woodward was quoted at a shareholder meeting as saying that “playing performance
doesn’t really have a meaningful impact on what we can do on the commercial side of the business”.
However, the lack of investment in the infrastructure at Old Trafford has resulted
in matchday income flatlining over the last decade, and the lack of trophies since the
retirement of Sir Alex Ferguson has coincided with no growth recently in commercial income either.
Covid-19 first impacted the Premier League in March 2020, with matches being postponed
and pushed back until after the financial year end of 30 June.
This hurt Manchester United more than Manchester City as United generate twice as much money as
City from this source due to a combination of bigger ground capacity, more hospitality offerings
and a bigger tourist element in the fanbase who are willing to pay higher ticket prices.
Even so, United still had a £31 million income advantage over their city rivals.
The results for 2020/21 are however a first instance of a club generating more revenue
than Manchester United. A season taking place behind closed doors meant that Old
Trafford contributed only a tiny fraction of the usual £110 million year in ticket receipts.
City too suffered the same fate, but their reduction in income was about £55 million.
In terms of broadcast income, City won the Premier League and made the final of the Champions League
in 2020/21. Whilst fans at Old Trafford might claim that they generate higher viewing figures,
because broadcast money is linked, especially in UEFA competitions, to progress in the Champions
League, it means that City have generated more money from this source since 2015, and if there
is another Premier League title won by the team in light blue this could continue in 2021/22 too.
Manchester United have reported a dip in commercial earnings in 2020/21 as the club
gave sponsors Chevrolet an extra six months of exposure on their shirts for a relatively low sum,
as an acknowledgement of the disruption caused by the pandemic. No such deal was
struck by Manchester City with Etihad Airways. As a consequence, City’s commercial income
increased to £272m in 2020/21 whilst United’s fell to £232 million, as the extended Chevrolet deal,
combined with a decline in merchandise sales due to the pandemic, hit this income source.
Whether City can sustain this advantage is questionable. Manchester United will have
the benefit of a full Old Trafford for the 2021/22 season to boost matchday and merchandise earnings,
as well as making the knockout stages of the Champions League. But City’s ability
to generate more and more sponsors on the back of regular trophies will help their cause. City
generating more money than United could therefore give fans bragging rights in terms of revenue
for one year only, but there is certainly more potential competition from elsewhere.
Spurs now have the potential to have the highest grossing matchday income in the Premier League
with their multipurpose, relatively futureproof new stadium and Liverpool
are reaping the rewards of success on the pitch with having highly desirable
assets from a marketing perspective in the likes of Jurgen Klopp and Mo Salah.
The challenge to Manchester United is coming from more than one place.