Huge cut in football staff helps blue side of Manchester reduce red ink

Khaldoon Al Mubarak

By David Owen
December 4 – A halving in the number of football staff employed by the club has helped Manchester City to report much-reduced annual losses and added to the growing impression that 2013-14 will bring a marked improvement in Premier League club finances.

The swingeing cut – from 222 to 112 – in football staff, including players, retained by the league champions enabled a 12% reduction in aggregate payroll costs from £233 million to £205 million.

Otherwise, the pattern of the results was similar to Premier League rivals who have already reported, with broadcasting income from sources other than UEFA surging more than 58% to £101.9 million on the back of the league’s much-improved broadcasting deals.

All told, turnover for the year to May 31 pushed well beyond the £300 million mark to £346.5 million (2013: £271 million), while operating expenses edged down to £366.2 million (£369.4 million). The Abu Dhabi-owned club’s operating loss was pared from £50.6 million to £17.9 million, while the pre-tax loss dipped from £51.6 million to £22.9 million.

The club said that this figure included “the accounting in full of £16 million that recognises the total UEFA sanctions imposed in May 2014 following disputed breaches of its Financial Fair Play regulations. The club expects to be entering the 2015-16 season with no outstanding sanctions or restrictions.”

Khaldoon Al Mubarak (pictured), chairman, said that City had “moved beyond the period of heavy investment that was required to make the club competitive again”. He added: “It is commercial growth of the kind we are seeing today that will underpin and support our operations in the future.”

Meanwhile, Ferran Soriano, chief executive, disclosed that the club has “budgeted for a profit in 2014-15”.

After a sluggish start, the team has appeared to be running into form in recent days, spearheaded by Sergio Agüero, its lethal Argentinian striker. However, it faces a critical Champions League showdown in Italy with AS Roma on December 10.

In a further interesting detail, the new accounts show that City’s contingent liabilities almost doubled in its latest financial year to over £100 million. A note to the accounts states that: “Additional transfer fees, signing on fees and loyalty bonuses of £100,563,000 (2013: £53,857,000) that will become payable upon the achievement of certain conditions contained within player and transfer contracts if they are still in the service of the club on specific future dates are accounted for in the year in which they fall due for payment.”

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