Man City lose $150M during first season after buyout
MANCHESTER, England (AP) — Manchester City’s losses trebled to almost $150 million during their first season under Sheikh Mansour’s ownership, but he has written off the debts to him to help comply with future UEFA regulations.
The member of Abu Dhabi’s royal family has invested £394.5 million ($630 million) since buying the heavily indebted club in August 2008 in a bid to deliver their first major trophy since 1976, financial figures released by the club showed yesterday.
Following the takeover, he immediately funded the euro42.5 million purchase of Robinho from Real Madrid along with another large outlay in the January transfer window.
That meant an operating loss of £34.2 million in the year to May 31, 2009 soared to £92.6 million — almost treble the previous year — when the massive investment revamping the squad was taken into account.
Operating expenses rose by almost 150 per cent to £120 million primarily due to increased playing staff costs, while — despite City’s greater profile — turnover rose by just six per cent to £87 million.
“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. “This transformation will take a number of years.”
Since the end of the financial year, Sheikh Mansour has emulated Chelsea owner Roman Abramovich by wiping out debts to ensure City doesn’t breach UEFA debt controls, which could see clubs banned from the Champions League after 2012 unless they break even on football-related business.
Sheikh Mansour converted all of his £304.9 million worth of loans to City into equity, while injecting a further £89.6 million into the club by purchasing further shares.
“The owner’s decision to convert debt to equity is in line with their previously stated financial strategy,” Wallace said. “(The) club is now on a secure financial foundation that gives a tremendous platform to build from in future years.”
These figures don’t take into account transfers in the most recent summer transfer window, which saw more than £120 million spent acquiring talent, including Carlos Tevez, Emmanuel Adebayor and Kolo Toure in an effort to break into the Premier League’s top four and qualify for the Champions League.
City, who fired manager Mark Hughes and replaced him with Roberto Mancini last month, are fifth in the standings, two points behind fourth-place Tottenham with a game in hand.
Sheikh Mansour bought City from Thaksin Shinawatra for £210 million after the ousted Thai prime minister fled his homeland where he was due to face corruption charges. Thaksin retained a 10 per cent stake, which Sheikh Mansour bought in September.