2010 Financials

[ENIAM NAM]

http://news.bbc.co.uk/sport1/hi/footbal ... 051136.stm

Manchester City have announced losses of £121m for the 12 months leading up to 31 May this year, having spent more on wages than their entire turnover.

The financial losses, up from £92.5m for the previous year, represent one of the heaviest in Premier League history.

Wage costs of £133m exceeded a turnover of £125m, which in the vast majority of businesses would be unsustainable.

But City are owned by wealthy Sheikh Mansour of Abu Dhabi, who wants to see the club competing at the very top.

He has spent more than £300m on players since buying City - who have not won a trophy for 34 years - from the former Thai prime minister Thaksin Shinawatra in late 2008.

World-renowned stars such as Carlos Tevez, James Milner, David Silva and Yaya Toure have joined the club on big weekly wages as Roberto Mancini's squad bid to break into the top four of the Premier League, having just missed out in fifth place last season.

"Two years ago I was fortunate enough to become part of the Manchester City story and I remain grateful for the warmth of the welcome that you have given me," Sheikh Mansour said in a letter posted on the club's official website.

"The ownership of a club like Manchester City, with such a rich heritage and diverse community of stakeholders, carries a unique set of obligations to the fans, staff and broader Manchester community.

"This is something I do not take lightly.

"Therefore the challenge I set my board and executive leadership team is to develop City so that it is one of the most successful clubs both on and off the pitch, but to do so without losing any of the characteristics that make it so special."

[ENIAM NAM]

Letter from the Sheikh and full financial report on the website as well.

http://www.mcfc.co.uk/News/Club-news/20 ... kh-Mansour

Dear Fellow City Fans,

Two years ago I was fortunate enough to become part of the Manchester City story and I remain grateful for the warmth of the welcome that you have given me.

The ownership of a Club like Manchester City, with such a rich heritage and diverse community of stakeholders, carries a unique set of obligations to the fans, staff and broader Manchester community. This is something I do not take lightly.

Therefore the challenge I set my Board and Executive Leadership Team is to develop City so that it is one of the most successful clubs both on and off the pitch, but to do so without losing any of the characteristics that make it so special.

It has been an exciting and busy two years and that is why we are publishing this annual report. It is designed for you the fans, providing a detailed perspective on the progress of your club as a business, as a member of the community and of course as a great sporting institution.

Two years ago I promised that we would try and listen to your views and keep you informed of progress. I hope after reading the report that you feel a sense of pride in just how far we have come.

I would like to take this opportunity to thank the fans, staff and partners of the Club for their ongoing commitment and dedication, and wish the management and players a successful season for 2010-11.

Mansour bin Zayed

[Swales4ever]

Err... perhaps what is most important is the document the letter from HM the Sheikh was deemed to accompany:

The MCFC Financial Report & Statements:

http://www.mcfc.co.uk/News/Club-news/20 ... 00910.ashx

[Ted Hughes]

Perhaps one of the accountants would like to explain it as I'm thick, but that looks like the wage bill is bigger than the turnover to me? Now we've dumped Robinho & Co but added Balotelli, Silva, Kolarov, Milner, Boateng etc, surely next year's wage bill will be tens of millions higher?

Doesn't seem as if we're especially worried about the financial 'fair play' rules to me.

[Beeks]

The media is all over this but at the end of the day the Sheikh is a top of the tree businessman and obviously has a host of financial whizzkids at his disposal...I have no doubt they are poring over the FIFA regs and preparing to take advantage of every loophole they can.

[Ted Hughes]

The media is all over this but at the end of the day the Sheikh is a top of the tree businessman and obviously has a host of financial whizzkids at his disposal...I have no doubt they are poring over the FIFA regs and preparing to take advantage of every loophole they can.

I agree, 'loophole' being the key word. I can't see how we can possibly comply with the regs & stay competitive at Chump's league level, not for donkey's years anyway. Even if we could pay the wages we wouldn't be able to sign 1 single decent player at current prices. I recon they've got the whole thing covered.

[Fish111]

In the Sheikh we trust.

[Beeks]

The media is all over this but at the end of the day the Sheikh is a top of the tree businessman and obviously has a host of financial whizzkids at his disposal...I have no doubt they are poring over the FIFA regs and preparing to take advantage of every loophole they can.

I agree, 'loophole' being the key word. I can't see how we can possibly comply with the regs & stay competitive at Chump's league level, not for donkey's years anyway. Even if we could pay the wages we wouldn't be able to sign 1 single decent player at current prices. I recon they've got the whole thing covered.

I still can't believe that FIFA can get away with this...surely it is illegal to put restrictions on trade which is essentially what they are doing

I can't believe that they are doing it under the guise of 'helping the little clubs' either when it is obvious a move to protect the status quo

[Socrates]

Delighted with the turnover figure which is way beyond what I thought could be achieved without Champions League football. Most of the loss is amortisation of players which leaves us on target to have a profit before amortisation once we have CL revenue. Our wage bill will only increase relatively modestly from these figures so isn't a concern as long as turnover pushes towards £200m over the next couple of years. In terms of liquidity and growth they are excellent figures and the losses are only to be expected at this stage.

[dazby]

I'm a darned sight less worried than 5 years ago eh Soccs?

[Swales4ever]

Delighted with the turnover figure which is way beyond what I thought could be achieved without Champions League football. Most of the loss is amortisation of players which leaves us on target to have a profit before amortisation once we have CL revenue. Our wage bill will only increase relatively modestly from these figures so isn't a concern as long as turnover pushes towards £200m over the next couple of years. In terms of liquidity and growth they are excellent figures and the losses are only to be expected at this stage.

I was anxious for this confirmation from Your Goodself, Sir Jon.
Glad I still do understand something about financial statement, without being an expert of Your calibre.
Thanks to Yr. dongle... :-)

cheers, Pal, enjoy the stay.

[Beeks]

Delighted with the turnover figure which is way beyond what I thought could be achieved without Champions League football. Most of the loss is amortisation of players which leaves us on target to have a profit before amortisation once we have CL revenue. Our wage bill will only increase relatively modestly from these figures so isn't a concern as long as turnover pushes towards £200m over the next couple of years. In terms of liquidity and growth they are excellent figures and the losses are only to be expected at this stage.

Thanks Socs...nice to have someone who knows what they are talking about!

[Socrates]

My understanding of the UEFA regulations is that amortisation on players purchased prior to their inception is to be discounted and that Academy spending can also be taken out? With interest payments dropping to a very low level too, we still need to push that turnover up to £200m over the next 2 years to be able to meet the rules. CL football will take care of half that deficit, the Sheikhs development plans may take care of the rest. They are doing what is required. My argument has always been that we must judge their actions in the short term against the background of the Fair Play rules, that is why I get angry when City fans label them as reckless spenders or hasty and trigger happy in management. You expect it from the ignoramuses in the media but we need to ensure City fans at least "get it."

[Beefymcfc]

I like it........like it a lot. Especially as we've won nowt.............yet!

Corporate partnership revenue increasing by £25.9m to £32.4m

Ticketing revenues increasing by £2.8m (18.6%) to £18.2m

Season ticket revenues up by £0.9m to £9.6m

Television rights fee income increasing by £5.7m (11.8%) to £54m

Match day hospitality revenue growing by £0.7m (13%) to £6.1m

Retail sales and merchandise revenue increasing by £2.9m (60%) to £7.9m

[Socrates]

Delighted with the turnover figure which is way beyond what I thought could be achieved without Champions League football. Most of the loss is amortisation of players which leaves us on target to have a profit before amortisation once we have CL revenue. Our wage bill will only increase relatively modestly from these figures so isn't a concern as long as turnover pushes towards £200m over the next couple of years. In terms of liquidity and growth they are excellent figures and the losses are only to be expected at this stage.

I was anxious for this confirmation from Your Goodself, Sir Jon.
Glad I still do understand something about financial statement, without being an expert of Your calibre.
Thanks to Yr. dongle... :-)

cheers, Pal, enjoy the stay.

My bloody dongle is ruining my holiday. It has a parental lock on it that they seem incapable of lifting and it blocks me from receiving my own e-mails. Doing my nut in.

[john@staustell]

I agree with Soccers, the 40% increase in turnover is quite staggering and will worry some of our more sensible critics because they will see what can be achieved in the future given some degree of success.

Most of the people throwing stones at us have absolutely no vision or concept of how big the Sheik's plans are for the future, it's totally beyong their grasp.

[Fish111]

I haven't a clue what amortisation is so i will just bury my head in the sand and hope it all works out in the end.

[El_Quince]

There's something odd going on somewhere. I might be getting over excited but, see note 9 to the accounts: the result of the company was a loss of £231m. Somewhere down the group subsidiary companies have made a profit totalling iro £100m to bring the total result to the group of companies figure of whatever it was, £120m odd.

In note 12 we see that subsidiaries include what is presumably the actual football club company: Manchester City Football Club Ltd.

The UEFA rules say, IIRC, that it's the football club company that can't make a giant loss. Has the actual football club company (as opposed to holding company) been tinkered with somehow to show a profit and comply?

The financials for MCFC Ltd for 2010 (or any of the other companies mentioned) haven't been filed at Companies House yet but I'll keep an eye out.

[El_Quince]

PS: Amortisation = fancy dan way of describing the cost of buying players spread over the length of their contracts - a £20m player on a 4 year deal gets costed out at £5m a year.

[Socrates]

I haven't a clue what amortisation is so i will just bury my head in the sand and hope it all works out in the end.

it's the writing off of what we pay for players we buy spread over the lifetime of their contracts.