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Man City announce massive losses

Manchester City reported that they lost £92.6m last season.

The figures are through May 2009 so they include the £32.5m signing of Brazilian star Robinho in the January transfer window, but not the summer purchases of players like Carlos Tevez, Kolo Toure and Emmanuel Adebayor.

City was bought in September 2008 by Sheikh Mansour and since his arrival City have spent over £200m signing new players. Those new players have, as of yet, resulted in an increase in City’s revenues.

Turnover was up only 6% from £82.3m to £87m, while average attendances barely moved, to 42,890 from 42,081 the year before. A run to the latter stages of the UEFA Cup helped boost ticket revenues by £1.8m, and TV income was up by 12% to £48.3m, also boosted by the European run.

Operating expenses increased from £83.9m to £121.2m as City underwent it revolution.

“The financial results reflect a period of rapid change at the club, the result of long-term planning and investment by the board and our owners, to create a sustainable business in the future,” said City’s chief financial and administration officer, Graham Wallace. “We have always said that this transformation will take a number of years and these figures reflect that.”

What I found most interesting in the report was that Sheikh Mansour converted loans of £305m into equity in the club, similar to what Roman Chelsea owner Roman Abramovich did last month. By converting the loan (or in essence writing off the loan), City and Chelsea are technically debt free and so would not run into any problems with Michel Platini if he imposes any restrictions on teams with a heavy debt-load.