Manchester City Reports $158.3M Loss During '11-12 Championship Season
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).