Manchester City post loss of more than US$85 mil., exceed UEFA rules
By Rob Harris, AP
January 31, 2014, 12:01 am TWN
LONDON -- Manchester City lost more than US$85 million in a year, exceeding the amount allowed under UEFA's Financial Fair Play rules.
The Abu Dhabi-owned team announced Wednesday that it lost 149.5 million pounds (US$248 million) between 2011 and 2013, the first FFP monitoring period, as it spent heavily to transform the club into a European power.
UEFA is only allowing losses of up to 45 million euros (US$62 million) in that two-year period. Clubs exceeding that amount risk being sanctioned, and could be banned from playing in Europe.
There isn't a single mention of FFP compliance in the annual report by the team, which has won two titles — the 2011 FA Cup and 2012 Premier League — since being bought in 2008 by Sheikh Mansour bin Zayed bin Sultan Al Nahyan, a member of Abu Dhabi's ruling family.
Since 2008, City's net transfer spending has been 582 million pounds (US$964 million).
After losing 97.9 million pounds (US$162 million) in 2011-12, City almost halved that figure to 51.6 million pounds (US$85 million) in 2012-13. To comply with FFP, City could point to its spending on infrastructure, including a new academy, the cost of long-term player contracts, and losses coming down.
“Growing revenues and controlled expenses are bringing the club to break-even in the immediate future and profitability thereafter,” chief executive Ferran Soriano said.
The 2012-13 losses would have been more than the previous year had City not generated 47 million pounds (US$78 million) by selling “intellectual property,” the club's image rights, to “third parties” or “related parties.” The 22.5 million pounds (US$37 million) received from “related parties” includes selling the use of the “City” name to New York City FC, the Major League Soccer club that is co-owned with the New York Yankees baseball team and starts playing in 2015.
City, which has also recently bought Australian team Melbourne Heart, disclosed that it is now operating with “zero financial debt,” while announcing that turnover has risen to 271 million pounds (US$449 million).
Salaries jumped by 15 percent to 233 million pounds (US$386 million) in 2012-13, the highest in English football.
The first UEFA decisions on FFP compliance are expected during March and April. European football's governing body will analyze whether deals by clubs with companies connected with the owner were at market value or were over-inflated to boost revenue. Abu Dhabi-owned Etihad Airways is City's kit sponsor and has the stadium naming rights.