Manchester City have claimed that they have achieved ‘financial sustainability’ after reporting much reduced losses of £23m for 2013-14. That figure includes the £16m financial fair play penalty deducted from Champions League payments due to the club. If it had not been this deduction, the club would have been close to break even. They expect to break even next year. In 2011-12 and 2012-13 they made losses of £148.5m.
Manchester City have claimed that they have achieved ‘financial sustainability’ after reporting much reduced losses of £23m for 2013-14. That figure includes the £16m financial fair play penalty deducted from Champions League payments due to the club. If it had not been this deduction, the club would have been close to break even. They expect to break even next year. In 2011-12 and 2012-13 they made losses of £148.5m.
Total revenues were £347m, an increase of £67m. Domestic broadcasting brought in £162m and £31m was earned from the Champions League. Commercial revenues were a record £166m, showing that City is making a breakthrough in this area which has been so important to the financial success of rivals Machester United.
Wages were down £28m to £205m. This represents 59 per cent of turnover, above the 50 per cent figure recommended by Deloitte, but not dangerously so. It compares favourably with the 87 per cent ratio in the previous year.
The previous year’s accounts were affected by the severance payments that had to be made to Roberto Mancini and his large entourage.
Sheikh Mansour has invested £1.15bn since he became involved in the club, more than Roman Abramovich at Chelsea. This is the largest amount put into a club in English football history.
Given that Uefa allowed the club to make losses of €20m in the last reporting period, and that certain permissible costs such as infrastructure are taken out of the equation, they have now established a buffer against financial fair play requirements and should not be penalised again. It will be necessary to balance players coming in against players going, but that should be manageable without making the club in any way uncompetitive.
Uefa may seek further information about the sources of City’s commercial income, given that some of it is linked to Abu Dhabi where the club’s ownership is based. Questions may also be asked about a fall in the number of football staff from 222 to 112.
City say this relates to a restructuring where some department, such as scouting, are now paid for by the parent company, City Football Group. This is justified on the grounds that information and resources are shared with partner clubs in New York, Yokohama and Melbourne.
Some might interpret these financial results as a victory for financial fair play in terms of encouraging a more sustainable approach. An alternative view would be that having made the investment up front, City can now pull up the ladder behind them. It would be difficult for another club to repeat their feat, however wealthy their benefactor.