Champions City must now live within means
Reuters - Sunday 13 May 2012, 22:59
After winning the English
league for the first time in 44 years, Abu Dhabi-owned
Manchester City must build on their success while reining in the
lavish spending that has made it possible.
City, long the poor relations to local rivals Manchester
United, have been transformed by an estimated 800 million pounds pumped into the club since 2008 by owner Sheikh
Mansour Bin Zayed Al Nahyan, one of Abu Dhabi's ruling family.
City's heart-stopping triumph may be the last hurrah for
English football's big-spending benefactors as new UEFA rules
designed to move European clubs towards breaking even begin to
bite.
"It may well be that we don't see the like of Manchester
City in the Premier League again for some time to come," said
Simon Chadwick, professor of sports business strategy and
marketing at England's Coventry University.
"UEFA Financial Fair Play Regulations are beginning to
moderate club finances essentially by forcing them to build
revenues or to cut costs."
City lost an English record 197 million pounds in 2010/11,
their last full financial year, but said that figure would be
the peak.
They blamed the losses on spending in 2010 which brought in
players including Ivorian Yaya Toure and Spaniard David Silva
and helped them qualify for the Champions League for the first
time.
"Man City are already playing catch-up in terms of financial
fair play," said Karish Andrews, a lawyer with London firm Lewis
Silkin who works in the sports industry.
"The 2011/12 season is the first that clubs will be
monitored by UEFA and Man City cannot put it off any longer in
terms of seeking to adhere to it."
BACK FROM THE WILDERNESS
City have agreed a series of significant deals in recent
months to boost revenues and help cut their losses.
The club signed a 10-year sponsorship deal with Abu Dhabi's
state-owned airline Etihad Airways at the start of the season,
worth a reported 35 million pounds a year.
Last week they agreed a new kit deal with Nike that
will start from 2013-14 - replacing an agreement with Nike's
locally-based Umbro brand and underling the club's growing
international appeal.
City also plan to build a new academy in east Manchester to
ensure they develop more of their own players rather than having
to buy in expensive talent.
City's wilderness years - their FA Cup success last year was
their first major trophy since 1976 - mean the club currently
lags rivals in terms of international appeal.
"Man United, Arsenal and Chelsea have forged their
reputation on what they have done in Europe," said Joe McLean, a
football industry expert at business services group Grant
Thornton.
The need to improve on this season's early exit from the
Champions League will test City's commitment to prudence.
"It may well be that the way forward is for the owner to say
you can buy a couple of marquee signings but you have to fund it
by getting some players off the squad list," said McLean.
Summer transfer activity by top clubs will show whether any
plan to call UEFA'S bluff over break-even rules that could
exclude them from European competition from 2014-15.
"The big question is, when push comes to shove, whether UEFA
are willing to turn down a major club," said Professor Tom
Cannon, a sports business expert at Liverpool University.