Telegraph.co.uk
Manchester City announce record annual losses of £195m for 2010-11
Manchester City face a race against the clock to comply with Uefa’s Financial Fair Play regulations after revealing record-breaking losses of £194.9 million fuelled by a massive annual wage bill of £174 million.
Big spenders: Manchester City splashed out £27m to land Edin Dzeko in the 2011 January transfer window Photo: GETTY IMAGES
By Telegraph staff and agencies
6:20PM GMT 18 Nov 2011
95 Comments
Premier League leaders City posted their accounts for the year ending May 31, 2011, on Friday and, despite bullish claims by the club that accelerating revenue streams have put City on track to sustainability, the huge losses leave the Abu Dhabi-owned club just three years to meet Uefa’s tough financial strictures.
Brian Marwood, City’s football administrator, acknowledge the challenge facing the club by admitting, 'We’ve got a huge amount of work ahead of us to make sure we are sustainable.’
Uefa’s FFP guidelines, which apply to all clubs competing in European competitions from the 2014-15 season, aim to reduce the reliance of clubs on wealthy owners and encourage the balancing of books among football’s leading clubs.
But with Uefa allowing clubs to post losses of no more than £38.5m in total between this season and the end of the 2014-15 campaign, City must somehow reconcile and reduce their staggering losses to that figure or risk the possibility of exclusion from European competition in 2015.
Senior figures at City insist, however, that constant dialogue has been undertaken with Uefa and that the latest financial results will be as bleak as it gets for the club.
Graham Wallace, Manchester City's chief operating officer, said: “As we undertake the club’s commercial transformation, we are cognisant of the incoming Uefa financial fair play regulations and consequently we continue to maintain positive and ongoing dialogue with all appropriate football authorities.
"Our losses, which we predicted as part of our accelerated investment strategy, will not be repeated on this scale in the future.
"These financial results represent the bottoming out of financial losses at Manchester City before the club is able to move towards a more sustainable position in all aspects of its operations in the years ahead.”
Although the figures do not take into the transfer fees or wages of summer signings such as Sergio Aguero, Samir Nasri, Gael Clichy and Stefan Savic, the £40m-a-year stadium and kit deal with Etihad Airways is also not taken into account.
City, whose total revenue figure of £153m is only £10m short of Tottenham’s Champions League-boosted figure of £163m, are also confident that their participation in the Champions League this season, which is expected to generate at least £25m for the club, will also substantially increase earnings in their next accounts.
The club’s £174m wage bill is far in excess of their domestic rivals, however, with Yaya Toure earning in excess of £200,000-a-week and Carlos Tevez, despite his ongoing dispute with the club, still pocketing a salary of £198,000-a-week.
City believe that their success on the pitch will ensure they no longer have to pay a 'City premium’ in wages in order to beat more established clubs to the signing of players, but Uefa president Michel Platini insisted recently that clubs such as City and Paris St Germain, who are owned by the Qatari royal family, will not be allowed to spend beyond what they earn from football-related activities.
Speaking last month, Platini said: "The philosophy is that you cannot spend more money than you generate. It is not just PSG at the top of the French league. You also have Manchester City at the top of the English league with their Arab owners. If you set the rules for everyone, they have to apply for specific clubs.”
In City’s figures, the writing off of £34.4m worth of players signed previously, included the £19m Brazilian forward Jô is regarded as a one-off hit that will not be repeated going forward.
And City officials are confident that, while Manchester United’s most recent annual revenue figure of £331m remains a distant target, the club’s increasing profile on a global scale will enable them to compete with the likes of Chelsea, Arsenal and Liverpool in terms of generating funds to help move towards compliance with FFP.
Throughout the accounting process and compilation of their latest accounts, City maintained a regular dialogue with Uefa, who are understood to be aware of the efforts made by the club -- and it progress in some areas -- to reduce their reliance on owner, Sheikh Mansour bin Zayed al Nahyan.
With Graham Wallace sitting on the financial panel of the European Club Association, City have a senior figure within the powerbase of Europe’s leading clubs who has, according to sources, held 'good and positive dialogue’ with his counterparts and Uefa officials.
But although the club claim that the latest results are no surprise and a necessary evil of Abu Dhabi’s accelerated development strategy, with 'results on the pitch proving a validation of that strategy,’ Uefa will come under pressure to flex its muscles if clubs dramatically overshoot FFP targets between now and 2015
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They're screwed. First they ruin English football by buying up 11 of the best players in the world to create a team, now it looks like themselves as a club will be ruined, because I don't see how they'll be able to recoup this money. The rate they're going, either the owner will go bust, leaving City in astronomical debt, or he'll have to sell up, taking his millions and leaving them in astronomical debt. Ending up like Leeds looks like being a best case scenario for them.
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foreign billionaires have ruined football.
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10/4 Kemosabe Gold Member
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The buying of players at this level will stop or lessen over the next few seasons and they will probably only add in a couple of players each season, with similar going out.
They, along with Chelsea, Man Utd, Chelsea have ruined the game in Britain with no-one being able to compete with their spending or untold debt.
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Man U I actually have some respect for though, yes they've spent big but they actually build success for themselves as well. Chelsea and Man City were nothing before the foreign billionaires, they had no history, the incentive for the players they bought was purely financial. Man U actually build a good team for themselves, and their success was built on stalwarts like Giggs, Scholes, Neville, Keane, Beckham et al. Plus Ferguson is arguably the best manager ever. Mancini is a dreadful manager.
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Shepard
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Money ruins this sport by the day.
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BuckeyeBhoy
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this plus EPL knew full well that this IS going on and did nothing to stop it,in fact encouraged it.In short reap what you sow City (And the rest of the EPL:38:)