Manchester City report record losses of £197 million

By David Gold

November 18 – Manchester City have recorded a gargantuan loss of £197 million ($311 million/€230) for 2010-2011, placing in doubt the club’s ability to comply with UEFA’s new financial fair play rules.

Those rules require clubs to break even over three consecutive years of filed accounts, though they are allowed to record a loss of up to £40 million ($63 million/€45 million) in the first three years that the initiative is in place.

The loss highlights the extent to which the club has been forced to invest over the 2010-2011 season, the last year in which financial accounts would not be analysed by the fair play rules.

City signed a £400 million ($626 million/€458 million) deal with Etihad in the summer which extended their shirt sponsorship as well as renaming the club’s stadium, and that could go a long way to helping them comply with the rules.

UEFA’s club financial control panel chairman Jean-Luc Dehaene told the BBC earlier this year that he would question aspects of the deal though, as the chairman of Etihad, Sheikh Hamid Al Nahyan, is City owner Sheikh Mansour’s half brother.

This year’s loss made this year eclipses the £141 ($222 million/€165 million) deficit recorded by Chelsea in 2005, and is significantly higher than the £121 million (€141 / $191m) the current Premier League leaders lost in 2009-10.

The bulk of the loss was due to the signing of a number of players, including Edin Dzeko (pictured below), David Silva (pictured above) and Yaya Toure, all of whom have been pivotal in the club’s impressive unbeaten start to the domestic season.

City insist that it is committed to breaking even and complying with the financial fair play rules, and are building a new training complex which they hope will produce a host of talented young players to help them avoid having to spend large sums to bring in big name players.

Graham Wallace, the club’s chief operating officer, said: “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.

“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.”

Champions League football, which City are enjoying for the first time this season, will also help their efforts to break even, though they face a battle on to qualify from their group this season.

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