Man City annual loss soars to £121m

MANCHESTER City Football club today said financial losses had soared to £121m   after its huge investment in new players.

Wage costs at the club, owned by Abu Dhabi’s Sheikh Mansour bin Zayed, surged too – to £133m – £8m more than club’s turnover, which in the year to the end of May rose from £87m to £125m.

The figures announced today  don’t include the impact of this summer’s net transfer spending of £96m, but relate to last year, when Carlos Tevez, Joleon Lescott and Emmanuel Adebayor were all signed for fees of more than £20m.

An annual report published by the club today revealed that Sheikh Mansour’s Abu Dhabi United Investment & Development company had pumped a further  £53.2m into Manchester City through the purchase of 25.1m new shares in June.

In his review of the year chief executive Garry Cook said “Manchester City Football Club is undergoing a significant transformation, and our financial results for 2009-10 reflect the pace of that process through rapid and ongoing investment in our infrastructure, facilities and professional capabilities.”

Referring to the financial figures – which show a net loss of £121m, up from £92.5m in 2009,  the former Nike executive said the loss should come as “no surprise”. Losses before tax rose from £73.6m to £115.8m.

He said: “Investments made in the 2009-10 financial year are consistent with our owner’s long-term vision to operate on a more successful and sustainable footing in the future.

“It is safe to say that player acquisitions on the scale we have seen in recent transfer windows will no longer be required in the years ahead now that we have such a deep and competitive squad.”

Chief finance officer Graham Wallace said the club’s financial performance was in line with the board’s ‘long term financial and operating strategies and consistent with expectations.”

He revealed that nearly £500m had been injected into the club’s coffers as a result of  the conversion of £304.9m in loans to equity, and the issue of £135.8m in new equity during the year and £53.2m after the year-end. 

The annual loss is the second-largest in the Premier League’s history, and is surpassed only by Chelsea, which reported a deficit of  £141m in 2004-05, the end Russian tycoon Roman Abramovich’s first year of ownership.

City must now strive to comply with new financial rules imposed by European governing body Uefa.

New financial fair play regulations say clubs can lose a maximum of £39m from now until 2014 or face sanctions which could see them banned from competitions such as the Champions League.

The 86-page annual report shows that employee numbers jumped by more than 100 from 302 to 413.

The highest paid director, not named, but likely to be Mr Cook, received £1.8m, up from £1.4m in 2009.