Manchester City have announced record annual losses of £194.9m.
The colossal sum, the highest ever recorded in English football, shows the depth of the investment made by Sheikh Mansour to transform City from a lower-mid table outfit in 2008 to their present status as Premier League leaders.
Whilst accepting the vast scale of the losses, City officials are adamant it marks a low point in their financial graph and from this point forward, they will 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.
“The result is consistent with the guidance provided in the first MCFC annual report that losses would peak in the 2010-11 financial year, as a result of the accelerated investment programme that the club undertook between 2008 and 2011,” said the club in a statement to accompany the results.
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 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.
There is a clear desire to develop in some areas, particularly in overseas markets where Manchester United have been so strong, but City have no plans to extend the newly-named Etihad Stadium currently.
However, over the road, it is hoped planning permission to start work on the vast 80 acre site that will be known as the Etihad Campus will be granted in December.
City have received a favourable response to their ambitious scheme, the like of which has never been seen before in England, from local residents, who are set to benefit from 85 permanent and 200 temporary jobs within the project as a whole.
It is this scheme which the club feel will prove Etihad’s £350m investment worthwhile.
In fact, Press Association Sport understands there is a feeling at City that the price tag may eventually be viewed as undervaluing the site rather than inflating it, as Arsene Wenger and Liverpool managing director Ian Ayre have suggested.
It will also be used as evidence of Sheikh Mansour’s long-term commitment for City to become profitable should the club eventually fail to meet UEFA’s FFP ruling that no club can incur losses in excess of 45million euros (£40m) over the three seasons of the first monitoring period, which begins in the 2011-12 campaign.
“Look at the companies Sheikh Mansour has invested in,” a City official told Press Association Sport.
“He simply does not take on failing businesses.
“He wants Manchester City to be as financially sustainable as possible. That
Read more…