Premier League leaders Manchester City yesterday announced annual losses of £194.9m, the highest ever recorded in English football.
While accepting the vast scale of the losses, City officials were adamant it marked a low point in their financial graph and from this point forward, they would be embarking on a significant upward trend.
“Our losses, which we predicted as part of our accelerated investment strategy, will not be repeated on this scale in the future,” said chief operating officer Graham Wallace.
Thankfully for City, the figures will not be taken into account as part of UEFA’s Financial Fair Play regulations as they fall outside the accounting window.
Indeed, as “additional exceptional charges” of £34.4m have been added to a net loss of £160.5m for the 2010-11 financial year, it could be argued the club have been quite astute in their planning.
It is also easy to see why the club are so strong in defending their present position as the mammoth sponsorship deal with Etihad Airlines, said to be worth £35m a year over the next decade, plus the riches on offer in this season’s Champions League, will have begun to impact on City’s accounts in 12 months’ time.
The Blues are also pointing out that commercial revenue has risen 49.7 per cent to £48.5m and TV rights, thanks to the club’s third place Premier League finish, winning the FA Cup to end a 35-year trophy drought and a run to the last 16 of the Europa League, have increased 27.4 per cent to £68.8m.
Overall turnover was £153.2m, breaking through the £150m barrier for the first time.
Although officials are aware of the likelihood of all the focus going on the eye-bulging headline figure, which has been covered by two tranches of new equity of £176.7m during 2010-11 and £114.2m in the post-year period, they are insistent the losses should be taken in context with the club’s position as a whole.
In spending huge amounts on Roberto Mancini’s playing squad, the Blues have been left with a number of players, including Emmanuel Adebayor, Roque Santa Cruz and Wayne Bridge, who are of no real value to City now but still have to be paid, money which rolls into a seven-figure sum every month.
Only now do Manchester City believe they have got to the situation required for a leading club of having two men for each position.
And, given most of Mancini’s players are young, vast recruitment drives such as those which have been seen so often over the past three years, will not be necessary.