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Will huge losses impact Man City on the field?

Football News 24/7
Whilst last week's news that Manchester City has posted the biggest ever annual financial loss in English football history came as no surprise the signs are that this will be the top of the graph. The club posted losses of £197m, on the back of a £460m investment in new players, such as Mario Balotelli and David Silva, and a spiralling wage bill.

But next year's figures look certain to be better, as they will include income from Manchester City’s reported £35m sponsorship deal with Etihad Airlines and from the club’s Champions League games played this season. This is not to mention the almost certain upturn in the valuation of future sponsorship deals as City look certrain to play Champions League football again next season - probably on the back of a Premier League title win.

The loss far outweighs the previous biggest ever football loss: £145m posted by Chelsea in 2005, a year after Russian oligarch Roman Abramovich took over the club.

The main concern for City's owners is making sure they will be able to comply with UEFA’s “financial fair play” rules, which takes effect in the 2013-14 season and requires clubs to break even over the next three years. The club reported an operating loss of £126m in the 2009-10 financial year.

Graham Wallace, Manchester City’s chief operating officer, says the losses will not be repeated again on this scale in future.

He adds: “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.”

Turnover increased to £153.2m, up from £125.1m in the previous year, driven by an increase in commercial partnership revenue. Income from television rights rose 27.4% to £68.8m in the period, while match day ticket sales were up 8.2% to £19.7m.

City are following in neighbours manchester United's footsteps, investing heavily in digital channels that will enable them to exploit not just the home market, but the global market as well, especially Asia and the Far East where there is an insatiable appetite for Premier League football.

From a fans perspective things couldn't be better right now, and provided the onwers pockets remain deep, and the losses can be sustained by them, City could - like Arsenal - be in the black by the time in counts for 'financial fair play'

JB

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