The loss for the 2010-11 financial year eclipses the previous record of £141 million set by Chelsea in 2005 and reflects the massive investment made by Sheikh Mansour bin Zayed al-Nahyan since he bought City in 2008. The Barclays Premier League club’s loss was made principally by significant spending on the playing squad. A total of £156.5 million was spent on players during 2010-11, bringing City’s payroll up to £174 million, £21 million in excess of its entire turnover.
The net loss of £160.5 million was exacerbated by an additional £34.4 million spent on writing off the value of players signed previously. However, City’s commercial revenues increased in the 2010-11 financial year by 22.5% - driving total revenues from £125.1 million in 2009-10 to £153.2 million – exceeding the £150 million barrier for the first time in the club’s history.
The loss does not include the club's huge sponsorship deal with Etihad Airlines, worth a reported £35 million a year, or revenues from this season's inaugural Champions League campaign. UEFA’s FFP rules are set to come into play in 2013-14 and will analyse clubs’ accounts for the previous three years, starting with the current 2011-12 financial year. Clubs competing in European competition will be permitted to lose just Eur45 million over these three years and City’s chief operating officer, Graham Wallace, admitted the club will work hard to meet its requirements.
"Our losses, which we predicted as part of our accelerated investment strategy, will not be repeated on this scale in the future," Wallace said. "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. As we undertake the club's commercial transformation, we are cognisant of the incoming UEFA financial fair play regulations and consequently we continue to maintain positive and ongoing dialogue with all appropriate football authorities." Following Saturday’s 3-1 win over Newcastle United, Manchester City stands five points clear at the top of the Premier League and the club is second in its Champions League group.
