Real Madrid's Bernabéu To Be Renamed ARU Backs Brumbies To End Finance Woes ASA Clears Beckham's Whisky Ad Legia Warsaw Launches $2.3M Fund Aussie Open Match Attracts 3.5M Viewers Executive Transactions Argentine Footballerr Returns To China Cologne To Increase Stadium Capacity Force India To Skip Jerez Test Names In The News
SBD Global/December 17, 2012/FinancePrint All
Winning the EPL title "incurred a loss" of £97.9M ($158.3M) for Man City, although that represented "half the deficit the club suffered the previous season when it finished third," according to Blitz & Bounds of the FINANCIAL TIMES. Man City "managed to cut its annual losses to £97.9M on the back of higher revenues," but said that "its wage bill had also grown." However, the club now "expects the wage bill to reduce in future seasons." The Premier League champions "declared a pre-tax loss of £189.6M for '10-11, the biggest annual loss in English football." However, club CEO Ferran Soriano said that "revenues last season had grown 51% to £231.1M ($373.6M) putting the club 'on the verge of a historic transformation.'" The club was bought in '08 by Sheikh Mansour bin Zayed bin Sultan Al Nahyan of the Abu Dhabi royal family who "has poured millions into buying players who are retained on some of the most-lucrative contracts in football" (FINANCIAL TIMES, 12/14). BLOOMBERG's Christopher Elser reported Man City said the "peak of the club’s investment in its playing squad has passed." It "paid £70M ($113.2M) in net transfer fees, compared to £120M in each of the three previous years." The football staff, including players, "rose to 237 in the '11-12 year from 205 in the year earlier period." Man City spent a net of £39M ($63.1M) on players "after the close of the financial reporting period" (BLOOMBERG, 12/14).
FINANCIAL FAIR PLAY: In London, David Conn reported Man City "will present a stern test for UEFA's new Financial Fair Play rules when they come into force for the '14-15 season." UEFA rules "allow clubs in European competitions to make a total loss of €45M ($59.2M) between '11 and '13, if that loss is bankrolled by an owner." So, Man City's loss for '11-12 alone "is almost treble the figure allowed." The club indicated that "it will rely on UEFA's detailed exemptions in the hope of complying." The ultimate sanction for a flagrant breach of the rules, which are aimed at stabilizing European football's finances, "is exclusion from continental competition." The rules allow a club to deduct from its losses money spent on infrastructure -- mainly its stadium and youth academy. Man City is building a £140M ($226.4M) training campus on 80 acres near its Etihad Stadium, but "the bulk of the construction has not yet been done and so that expenditure does not eat far into the £97.9M loss" (GUARDIAN, 12/14).
Bundesliga club Hamburg SV "has released its financial numbers for the '11-12 fiscal year in which it lost €6.6M ($8.7M)," according to the NDR. During the '10-11 fiscal year, the club lost almost €5M. Club Chair Carl-Edgar Jarchow said, "This is obviously not the result we were wishing for. We are currently working to make sure the minus won't be as high this season. However, this is also depending on possible player transfers during the winter." The club "has to save money and wants to sell several of its substitute players during the winter break." Hamburg SV "has been able to reduce its payroll by only €3M ($4M) to €43.8M ($57.6M)." Jarchow announced in April '11 that he "wants to cut payroll costs by €35M" (NDR, 12/14).
HELPING HAND: The SID reported 2nd Bundesliga club MSV Duisburg "has been saved from bankruptcy due to a further financial donation by club patron Walter Hellmich." Hellmich said, "A point deduction is off the table, the season is secured. The team, administration, coaching staff and numerous fans have asked me to not let the club die." Hellmich, who owns a construction company, will reportedly pay the final part to close an initially €5M ($6.6M) gap. Reports suggest that Hellmich will invest €600,000 ($790,000) of his private money in the club (SID, 12/16).
National Rugby League club Newcastle Owner Nathan Tinkler will "be asked to hand over control" of the Knights by giving the club's NRL license back to the Members Club board, according to James Hooper of the SUNDAY TELEGRAPH. With his "billion-dollar asset-rich empire crumbling by the day," Tinkler "will be told to cut ties and walk away for the good" of the Newcastle club and community. Given the Australian Tax Office has "commenced wind-up proceedings against Tinkler" for a A$2.7M ($2.9M) debt and the New South Wales Government is suing him for A$600,000 in unpaid rent on Hunter Stadium, the Knights Members Club board has "been presented with little alternative." Tinkler will be asked to give up his A$20M bank guarantee and allow the Members Club board to "take over the licence and the day-to-day running of the NRL club effective immediately." Knights Members Club board Chair Nicholas Dan was "guarded when asked about the proposition." Dan: "Our top priority is to keep the club going at its best, so we will be discussing all options. Owners come and go, players come and go but the club must always come first" (DAILY TELEGRAPH, 12/16).
TOO INVESTED: In Sydney, Brett Keeble reported Hunter Sports Group CEO Troy Palmer, Tinkler's right-hand man, said that Tinkler had "invested too much into the Knights and the A-League's Jets to consider handing back the NRL licence to the members club." Palmer said that Tinkler was "in much better financial shape than reported" and that a A$3.19M tax bill would be paid to the Australian Taxation Office in the next ''seven to 10 days.'' Palmer added that all of HSG's creditors "would be paid and that an audit report into the Knights' financial operations would reveal HSG met all requirements." Palmer: ''We're not going anywhere. We haven't done all this work and made this investment in Newcastle and brought a lot of good people to this town to walk away. We're 100% committed to this" (SYDNEY MORNING HERALD, 12/17).
A KEEN PERSPECTIVE: Also in Sydney, McDonald & Kogoy reported Newcastle coach Wayne Bennett "warned the club's supporters against getting caught up in the anti-Tinkler fervour sweeping the Hunter region over the coal baron's financial problems." Bennett reminded the Tinkler critics to "take a deep breath." Bennett: "Remember some of the people that ran the club in the past didn't have a great amount of success either. I'm just not sure where they're coming from on this issue. If you look at the last 18 months and compare what we have to what we did have, there is no comparison. And that includes whether you are talking memberships, sponsorships, and playing staff. That's all because of Nathan's input" (THE AUSTRALIAN, 12/17). In Sydney, Chris Roots opined "Tinkler does things his own way." It is "neither patient nor friendly." He has "more enemies than friends in racing." However, it is "difficult not to have a little bit of compassion for him following the sale of All Too Hard." This was "the horse he wanted and needed to make his Patinack Farm empire flourish." Before feeling too sorry for Tinkler, "think of the men and women within the industry he has discarded." Anything he has achieved "has to be tempered by the stories of vets, farriers, feed merchants and others who have not been paid" (SMH, 12/17).
Financially troubled English Super League rugby club Salford City Reds "could have new owners by next week," according to Neil Barker of the MANCHESTER EVENING NEWS. Club Chair John Wilkinson, who is battling to avoid administration, has told players and staff that he is "in talks with two interested parties and a takeover deal is imminent." New owners are expected to work closely with Peel Holdings. Wilkinson assured players that the club’s "current plight is not as serious as the financial problems that almost forced Super League rivals Bradford Bulls out of business earlier in the year." Labour-run Salford town hall and the Rugby Football League top brass "have also put forward the name of potential new investors who have expressed an interest in taking charge of the City Reds" (MANCHESTER EVENING NEWS, 12/14).