City owner wipes out £305m of club's debts
Manchester City Football Club today said that owner Sheikh Mansour bin Zayed Al Nahyan had wiped out more than £300m of the club's debts.
It said accounts for the year ending May 31, 2009, which have not yet been made public at Companies House, would show that turnover increased 6 per cent to £87m (2008: £82.3m), in the first year under Sheikh Mansour's ownership.
Operating expenses rose nearly 50 per cent to £121.2m (2008:£83.9m) due mainly to the cost of players' wages.
The net operating loss was £34.2m (2008: £1.6m) and the net loss after amortisation of player contracts and financing charges was £92.6m (2008:£32.6m).
Match day attendances were up to 42,890 from an average of 42,081 in the previous season, with ticketing revenues ahead by £1.8m mainly as a result of the extended UEFA Cup run.
TV revenues were up 12 per cent to £48.3m mainly as a result of the UEFA cup matches, offset partially by a lower league placing.
Revenues from other commercial activities decreased by 8 per cent to £23.3m mainly due to a £4.5m reduction in events revenues, which last year benefited from the UEFA Cup Final, music and boxing events.
City said the decrease was offset by “significantly improved performances” in retail and partnerships.
Costs relating to amortisation of player contracts increased in the year rose to £39.4m from £25.4m reflecting again the costs of building a new squad. Interest payable and similar charges increased significantly as a result of the increased level of shareholder loans made to the business during the year.
City said today that after the year end, Sheikh Mansour had converted all of his existing £304.9m shareholder loans to the club into equity, which left the club with no debt. He has also invested another £89.6m in shares “as a measure of his long term commitment.”
The shareholder loans resulted from the purchase of a 90 per cent stake in the club in September 2008 from former Thai Prime Minister Thaksin Shinawatra by the Sheikh's Abu Dhabi United Group Investment & Development Ltd (ADUG).
It was reported that the deal valued the club at £210m but the amount paid has never been disclosed as ADUG is based in the Jebel Ali Freezone in Dubai and does not have to make its accounts public.
Since then the Sheikh, the brother of Abu Dhabi's ruler, has acquired the remaining 10 per cent from Thaksin.
He has also funded player purchases on top of the price paid for the club, including the £32m signing of Robinho in the early days of his ownership, and has funded improvements to the stadium and the youth academy.
Chief financial and administration Officer Graham Wallace said: "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.
"We have always said that this transformation will take a number of years and these figures reflect that.
“The owners' decision to convert debt to equity is in line with their previously-stated financial strategy and is fantastic news for supporters of Manchester City, whose club is now on a secure financial foundation that gives a tremendous platform to build from in future years."
City said he financial year to May 2009 marked the beginning of a period of significant planned investment in the playing squad, the youth academy, infrastructure, people, website and technology applications.
It said this investment would have a significant impact on the financial results “of the next several years” as the club seeks to achieve success both on and off the field.
Manchester City Football Club today said that owner Sheikh Mansour bin Zayed Al Nahyan had wiped out more than £300m of the club's debts.
It said accounts for the year ending May 31, 2009, which have not yet been made public at Companies House, would show that turnover increased 6 per cent to £87m (2008: £82.3m), in the first year under Sheikh Mansour's ownership.
Operating expenses rose nearly 50 per cent to £121.2m (2008:£83.9m) due mainly to the cost of players' wages.
The net operating loss was £34.2m (2008: £1.6m) and the net loss after amortisation of player contracts and financing charges was £92.6m (2008:£32.6m).
Match day attendances were up to 42,890 from an average of 42,081 in the previous season, with ticketing revenues ahead by £1.8m mainly as a result of the extended UEFA Cup run.
TV revenues were up 12 per cent to £48.3m mainly as a result of the UEFA cup matches, offset partially by a lower league placing.
Revenues from other commercial activities decreased by 8 per cent to £23.3m mainly due to a £4.5m reduction in events revenues, which last year benefited from the UEFA Cup Final, music and boxing events.
City said the decrease was offset by “significantly improved performances” in retail and partnerships.
Costs relating to amortisation of player contracts increased in the year rose to £39.4m from £25.4m reflecting again the costs of building a new squad. Interest payable and similar charges increased significantly as a result of the increased level of shareholder loans made to the business during the year.
City said today that after the year end, Sheikh Mansour had converted all of his existing £304.9m shareholder loans to the club into equity, which left the club with no debt. He has also invested another £89.6m in shares “as a measure of his long term commitment.”
The shareholder loans resulted from the purchase of a 90 per cent stake in the club in September 2008 from former Thai Prime Minister Thaksin Shinawatra by the Sheikh's Abu Dhabi United Group Investment & Development Ltd (ADUG).
It was reported that the deal valued the club at £210m but the amount paid has never been disclosed as ADUG is based in the Jebel Ali Freezone in Dubai and does not have to make its accounts public.
Since then the Sheikh, the brother of Abu Dhabi's ruler, has acquired the remaining 10 per cent from Thaksin.
He has also funded player purchases on top of the price paid for the club, including the £32m signing of Robinho in the early days of his ownership, and has funded improvements to the stadium and the youth academy.
Chief financial and administration Officer Graham Wallace said: "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.
"We have always said that this transformation will take a number of years and these figures reflect that.
“The owners' decision to convert debt to equity is in line with their previously-stated financial strategy and is fantastic news for supporters of Manchester City, whose club is now on a secure financial foundation that gives a tremendous platform to build from in future years."
City said he financial year to May 2009 marked the beginning of a period of significant planned investment in the playing squad, the youth academy, infrastructure, people, website and technology applications.
It said this investment would have a significant impact on the financial results “of the next several years” as the club seeks to achieve success both on and off the field.