SHEIKH MANSOUR bin Zayed al-Nahyan has invested €440 million in Manchester City since buying the club in August 2008, it has been revealed.
That huge and rapid expenditure is recorded in a document filed at Companies House on Christmas Eve, showing the cancellation of €395 million which Mansour initially put into the club as loans. That includes some debt Mansour inherited when he took the then stricken club over from the former owner, the ex-Thai Prime Minister Thaksin Shinawatra, and his expenditure since on players including Robinho, Craig Bellamy, Nigel de Jong, Republic of Ireland international Shay Given, Wayne Bridge, Gareth Barry, Roque Santa Cruz, Joleon Lescott, Carlos Tevez, Emmanuel Adebayor, Kolo Toure and other investment in the infrastructure at Eastlands.
According to the document, all €395 million of the loans from Mansour’s Abu Dhabi United Group were cancelled in return for new shares in the club. Mansour’s group also bought further shares for €100 million, to finance City’s hugely increased wage bill and other expenditure this season.
City last night released figures from their official accounts for the year to May 31st, 2009. The club recorded almost a tripling of the previous year’s loss, to €103 million, caused, it said in a statement, “primarily by increased playing staff costs”.
Mansour’s City, like Roman Abramovich’s Chelsea, are promising that overspending and losses on this scale will not continue indefinitely, and the club will ultimately become sustainable. However, City will not put a date on that target.
The losses are certain to continue into this year, because following the rush of summer signings the wage bill will far exceed the €92 million it was understood to have risen to by May 31st last year. Mansour’s more recent €100 million investment for shares will partly absorb this year’s losses.
The financial figures provide some more context to last month’s sacking of the former manager Mark Hughes and his replacement by Roberto Mancini, which was widely criticised for being too quick, and clinical. Crucial to the aspiration of breaking even is to reach the increased money which accrues from finishing in the Premier League’s top four and qualifying for the Champions League.
In contrast Manchester United’s owners, the Florida-based Glazer family, have given the club not one penny to spend. Quite the opposite; their ownership has drained the club of huge sums of money. In only three years up to June 30th 2008, the closing date of their most recent published accounts, United became liable to pay a staggering €293 million in interest alone.
Despite that, the capital lump sum which United owe to banks and hedge funds has actually snowballed by €177 million, from €601 million in 2005, to €778 million in 2008.
GuardianService
