Manchester City announce biggest ever loss in English football

Manchester City have announced the biggest loss in English football history, £194.5m for the most recent financial year. The loss on that huge scale, bankrolled by the club's oil-rich owner, Sheikh Mansour bin Zayed al-Nahyan during the third year since he bought City in 2008, eclipses the previous biggest loss ever made, £141m by Chelsea in 2005, the second year of their ownership by the oil oligarch Roman Abramovich.

City's loss was made principally by buying players to make Roberto Mancini's squad strong enough to top the Premier League, and paying wages beyond the club's own turnover. During the 2010-11 financial year City signed Jérôme Boateng for £10.5m, Edin Dzeko for £27m, David Silva for £26m, Yaya Touré for £24m, Aleksandar Kolarov for £19m, Mario Balotelli for £24m and James Milner for £26m, an extraordinary series of player purchases totalling £156.5m.

Mansour made it clear when he took over that he would spend the fortunes necessary to make City successful, and since June 2010 he has personally poured a further £291m into the club. Added to the £500m Mansour invested up to May 31 2010, he has now spent an unprecedented £800m on the football club, to bankroll the expenditure on transfer fees and wages the club would otherwise not have been able to afford. All the money has gone in as equity, in new shares, making it permanent, not as loans. The net loss City made on their operations, £160.5m, was increased by £34.4m writing off the value of several players signed previously, including the Brazilian striker, Jô.

A loss on such record-breaking scale raises immediate concerns about whether City have any chance of complying with Uefa's "financial fair play" rules, which will apply to clubs in European competitions from the 2014-15 season. Uefa will analyse top clubs' accounts for the three years before that, starting with the current 2011-12 financial year, and the rules allow clubs to lose just €45m (£38.5m) in total over those three years. Uefa's rationale is that such subsidised overspending is relentlessly inflating players' wages throughout European football, which has driven clubs insolvent.

City acknowledged the looming enforcement of financial fair play when releasing their figures, restating that despite this record loss close, they will attempt to comply. Graham Wallace, the club's chief operating office, said the 2010-11 financial year, in which those signings of top players added to the mountainous wage bill already accumulated, will be City's worst.

"Our losses, which we predicted as part of our accelerated investment strategy, will not be repeated on this scale in the future," Wallace promised. "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.

"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."

The club's chairman, Khaldoon al-Mubarak, a senior adviser to Mansour's al-Nahyan ruling family and the Abu Dhabi government, also implicitly acknowledged City's need not to depend on such huge subsidy from Mansour in coming years:

"Now that we are witnessing progress, both on and off the pitch, it is more important than ever to work towards achieving our ambition to establish Manchester City as a more successful, sustainable and internationally competitive football club, which remains rooted in the heart of the community it serves," al-Mubarak said.

City are confident that with income having risen 22.5% to £153m during 2010-11, the boost of Champions League football, increased TV and commercial earnings from being successful, the £350m 10-year shirt sponsorship and stadium naming rights deal with Etihad airline and the shedding of players no longer part of Mancini's plans, will draw income and spending closer together. They hope to show Uefa a "trend" towards breaking even by 2014-15 even if the losses have not been sufficiently staunched.

While seeing the need to comply with the rules, privately City are bullish too. Their 6-1 derby victory over United last month highlighted a sudden startling contrast between the Manchester club which has been pumped up by £800m owner investment, and United which, as their latest financial figures revealed this week, has now had £578m drained out by the Glazer family's 2005 debt-laden takeover.

While some clubs, most prominently Arsenal, complain that City's owner-spending is hyper-inflating wages and distorting football, City point out that they have broken no rules – so far at least – and in fact should be credited for investing fortunes in England, and in economically blighted east Manchester, at a time of economic meltdown here and in Europe.

While some clubs, most prominently Arsenal, complain that City's owner-spending is hyper-inflating wages and distorting football, City point out that they have broken no rules – so far at least – and in fact should be credited for investing fortunes in England, and in economically blighted east Manchester, at a time of economic meltdown here and in Europe

Spoiler:

Immaculate_Mole wrote:Meanwhile the team they face on Saturday are operating on a profit and only 6 points behind them

Spoiler:

SoloInter wrote:Sheikh Mansour is gonna cover all the loss but what about the ffp ??

dnmac4 wrote:

I just don't know why everyone has to be so negative about what there doing, the only person thats losing money and not gaining off of this model is there billionaire owner and I wish more billionaires would take his approach.

che wrote:

dnmac4 wrote:

I just don't know why everyone has to be so negative about what there doing, the only person thats losing money and not gaining off of this model is there billionaire owner and I wish more billionaires would take his approach.

yeah well i wish billionaires would stick to buying bentley fleets and 100m yachts to impress each other and keep their dickmeasuring contests out of football competitions with decades worth of heritage

dnmac4 wrote:

While some clubs, most prominently Arsenal, complain that City's owner-spending is hyper-inflating wages and distorting football, City point out that they have broken no rules – so far at least – and in fact should be credited for investing fortunes in England, and in economically blighted east Manchester, at a time of economic meltdown here and in Europe

I know people may think I'm nuts for saying this but I actually kind of agree with this statement. If more business' were less concerned about there bottom line and more concerned about making themselves a good member of there community pour lots of money into it and not taking advantage of it and insuring that there going to be there for the next decade then this economic downturn would not have been so brutal.

Art Morte wrote:

dnmac4 wrote:

While some clubs, most prominently Arsenal, complain that City's owner-spending is hyper-inflating wages and distorting football, City point out that they have broken no rules – so far at least – and in fact should be credited for investing fortunes in England, and in economically blighted east Manchester, at a time of economic meltdown here and in Europe

I know people may think I'm nuts for saying this but I actually kind of agree with this statement. If more business' were less concerned about there bottom line and more concerned about making themselves a good member of there community pour lots of money into it and not taking advantage of it and insuring that there going to be there for the next decade then this economic downturn would not have been so brutal.

It's a fair point in City's favour.

However, it is a bit of an obvious side-effect of the main objective, which is funding Manc City limitlessly.

It's a relatively small number of people who are benefitting from that "extra cash" that Sheikh Mansour is pouring into Manc City FC: Players earning very high wages, agents and other clubs pocketing hefty transfer fees. For a comparison, if it was a supermarket chain that Sheikh Mansour was willing to run in England with £100m+ losses every year, the benefit that "normal" people would get would be, like, a hundred-fold, because it would create a lot of jobs and probably have a little cheaper prices than other supermarket chains, since they'd be losing that £100m every year.

But Manc City FC spending money without limits will, at the end of the day, have a very small effect on (local) society and economy when the figures that are being spent are taken in consideration.

Moreover, it'd be great if Sheikh Mansour had an agreement with himself along the lines "every year 10% of the loss that Manc City make, I will donate to charity".
That would make these enormous losses seem less arrogant, especially in the current economic climate.

dnmac4 wrote:

che wrote:

dnmac4 wrote:

I just don't know why everyone has to be so negative about what there doing, the only person thats losing money and not gaining off of this model is there billionaire owner and I wish more billionaires would take his approach.

yeah well i wish billionaires would stick to buying bentley fleets and 100m yachts to impress each other and keep their dickmeasuring contests out of football competitions with decades worth of heritage

I mean you have very right to feel that way but almost the entire EPL is run by these people and to be honest La Liga needs the same kind of people investing in teams in Spain as well. Not to mention Italy too. It's not a bad thing for someone to dump a bunch of there own money into the league you love, all it does is make the league better and healthier and more competitive not to mention is great for whatever town there in as well. Look at Malaga there owner is revitalizing the whole town with his purchase of the club.

In almost every sports league in the world the teams are owned by rich people who's first interest is not making money off of the team they bought. If they do make money, great but they don't really expect to.

The bigger question is, what's the cut off? IF a rich family bought a team 50 years ago and have owned them for the last 50 years how is that any better? It's still a rich guy buying a club or team for the same reason someone would buy one today. It's just really hypocritical thinking as this is how it's been done for almost 100 years. Unless it's a club owned by the fans which is great but impossible for every team to be run that way.

lenear1030 wrote:

SoloInter wrote:Sheikh Mansour is gonna cover all the loss but what about the ffp ??

ffp wont do anything



and most of the loss is because they had to save the local boxing gym: https://goallegacy.forumotion.com/t12247-city-save-local-boxing-club