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Manchester City moved to make a significant statement to their Premier League rivals and the rest of the football world on Friday.
City, eight-time winners of the Premier League and UEFA Champions League winners in 2022/23, made the staggering announcement that talismanic striker Erling Haaland, one of the game’s most lethal marksmen, had inked a near decade-long new deal with the club.
In Haaland, 24, penning a deal until 2034, marking a seven-year extension to his current deal, it was a clear demonstration by the current Premier League champions that, while the backdrop of relevant struggle in the competition this season and the spectre of the 115 charges brought against them by the Premier League may loom large, that they remain bullish on the club’s trajectory.
An independent commission has been hearing the case around City’s 115 charges for alleged breaches of financial rules, with a decision expected in the coming months, although with a legal challenge expected in the event of any outcome it is likely a situation that won’t be concluded for some time.
This season on the pitch has been a challenge for boss Pep Guardiola, the kind of challenge he has not faced before in his Manchester City career, or even his entire glittering, trophy-laden time as a manager.
City are sixth and 12 points back from leaders Liverpool, and they have been out of sorts all campaign, suffering six defeats thus far in 21 games, three more than they had in the entirety of last season. The club looks to be entering into a transition period where some of the old guard who have been so key to the success under Guardiola look like being phased out and the next generation brought in to continue the good work.
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One player who they were desperate to keep, and who had been linked with moves elsewhere as City faltered on the pitch, was Haaland, a player who has notched a remarkable 111 goals in 126 games for the club in all competitions. The Norwegian has few peers in world football when it comes to his goalscoring exploits.
A new deal brings an end to any chatter, and hints at some confidence from Manchester City that they won’t be too negatively impacted by the findings of the independent commission, with Haaland’s commitment for such a long period a display of both competitive and financial strength.
The new deal is a record deal, with some reports putting the basic salary of the former Borussia Dortmund man at around £500,000 per week, not including any bonuses that might be attached to that.
But City have managed to build up plenty of financial headroom to make this kind of move, and in a market where signing a player of his quality would involve a fee north of £150m, not to mention similar wages, engaging Haaland for so long is a more cost-effective way of securing the services of a player they need in a vital area of the pitch.
Manchester City’s competitive success in recent years has had a significant impact on the club’s financial health. The most recently published accounts that covered the 2023/24 financial year showed that the club had record revenues of £715m, making a profit of £73.8m, a year after the Champions League success helped them turn a profit of more than £80m.
The club’s wage bill was down in 2023/24 to £412.6m having been £422.9m the previous year, albeit that was impacted by bonus payments for the year of the Champions League success.
The Premier League’s much maligned profit and sustainability rules (PSR) are in their final year, with the 2024/25 financial period the last to be considered before a switch to a squad cost ratio rule in line with what UEFA currently implement in their competitions.
City have seldom had any reason to be concerned about PSR, with figures for 2023/24 presented by football finance expert Swiss Ramble suggesting that the PSR headroom that the club actually had for the three-year cycle up to 2024/25 would be as much as £370m. Given City have turned a handsome profit in each of the last two financial years they aren’t likely to be too concerned about that.
Haaland’s deal at City initially was reported to be around £375,000 per week. Increasing his wages by a further £125,000 per week would see the annual commitment to his salary jump from £19.5m to £26m. But a £6.5m jump for City will be a drop in the ocean, and it won’t be significantly impactful even considering the introduction of new rules, with City’s current squad cost ratio, which takes into account wages, amortisation, severance pay and agents fees against turnover, standing at 54%, well under the 70% UEFA threshold and even further under the planned 80% initially for Premier League teams.
Strong player trading, allied with success on the pitch, has allowed for the club to create such a financial buffer, and while struggles may currently being endured, the financial headroom that they have managed to create over recent years means that they are in a position of strength like no other club in Europe, and they will be able to strike more major deals. Haaland’s could just be the start of things to come, and with rivals such as Manchester United and Chelsea having to worry more about being compliant and having less room for manoeuvre, it could well be that only Liverpool and Arsenal will be able to even attempt to keep pace at a domestic level for some time.