It isn't a very well constructed sentence. I read it 4-5 times before I finally got the meaning. It would be better written as: The Manchester clubs set a punishing pace that winter. Rivals Arsenal, Chelsea and Spurs are out of it before the traditional run-in." You are right that 'punishing pace' does mean outperform. 'Out of it' here is a contraction of 'out of contention'. In other words, they have left them so far behind, that they are out of contention for the lead of the competition.

I agree with you. It doesn't really make sense, and nor does the use of 'winter' there either.

Yes, in this sense it means they are outperforming them. The pace or speed at which that Manchester and Arsenal are winning is too difficult for the other two teams to keep up with. This is why 'out of it' is used. It's directed to the standings or scores. They can't keep up with the pace which is set so they are falling behind or out of the running. I hope that helps!