MCFC Annual Report 2010-11
- 18 November 2011 14:00
Manchester City Football Club has today published its second comprehensive annual report.
The report, which is compiled for the benefit of the fans and the Club’s broader stakeholders, outlines the achievements across the organisation during the past season. It includes a comprehensive record of the 2010-11 financial year.
The report characterises the 2010-11 financial year as being one of “ongoing investment in Manchester City Football Club’s capabilities both on and off the pitch as part of a long-term transformation plan for the organisation.”
It reveals the further strengthening of the Club’s capital base with the issuing of £176.7m of new equity in 2010-11 and £114.2m of equity in the post year end period - ensuring, as in the prior financial year, a balance sheet strengthened by new equity rather than debt based funding.
The report describes in detail how the investment has been used to create a strong foundation upon which the Club can achieve long-term success and sustainability over time
In it the Chairman Khaldoon Al Mubarak makes clear the priorities for the Club moving forward, saying: “Now that we are witnessing progress, both on and off the pitch, it is more important than ever to redouble our efforts and to work towards achieving our ambition to establish Manchester City as a more successful, sustainable and internationally competitive football club, which remains rooted in the heart of the community it serves.”
Significantly, the Club’s commercial revenues increased in the 2010-11 financial year by 22.5 per cent - driving total revenues from £125.1m in 2009-10 to £153.2m - exceeding the £150m threshold for the first time in the Club’s history.
The report outlines how in 2010-11, all revenue streams witnessed further growth, notably:
• Match day ticketing revenue - driven by increased average attendances, UEFA Europa League matches and FA Cup matches - increased by eight per cent (from £18.2m to £19.7m).
• Television rights income increased by 27.4 per cent on the previous year (from £54m to £68.8m), largely driven by the Club’s highest-ever finishing position in the Premier League, participation in the UEFA Europa League and the Club’s successful FA Cup campaign.
• Commercial partnership revenue increased by 49.7 per cent on the previous year (from £32.4m to £48.5m), driven by the full year impact of continued long-term partnership deals.
• Profitability from retail activities increased to £2.6m following the entering into of a long-term partnership with leading online retailer Kitbag to handle all club retail operations, including the opening of new retail stores.
The report reveals that for the 2010-11 financial year, the Club reported a net loss on a recurrent operations basis of £160.5m. This result is consistent with the guidance provided in the first MCFC annual report that losses would peak in the 2010-11 financial year, as a result of the accelerated investment programme that the Club undertook between 2008 and 2011.
UEFA Champions League participation and the comprehensive partnership with Etihad Airways signed in July 2011 are not reflected in the 2010-11 figures.
These aspects, combined with further improved revenue generation, will positively impact the Club’s financial results in 2011-12
In the report Chief Operating Officer Graham Wallace states: “Our losses, which we predicted as part of our accelerated investment strategy, will not be repeated on this scale in the future.
"Consistent with the Club’s transformation strategy, and the stated ambition of commercial sustainability, 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."
He added: “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.”
Additional exceptional charges of £34.4m were also reported in the 2010-11 financial statements. These were principally related to the revised carrying values of intangible assets.
The annual report also highlights how the proposed development of a world-class youth training and football development facility in East Manchester represents a unique opportunity for the Club to expand its in-house player development capabilities and reduce the level of investment required for inward player transfers in the future.
To access the 2010-11 annual report click here.