Spending £800m to establish themselves as a dominant force domestically and eventually, internationally, Manchester City now need to work towards making themselves financially sustainable within the next three years. They need look no further than their next Champions League opponents, Bayern Munich, for the perfect role models. Already financial fair play compliant, the Bavarians are going to be a major force once more in the next few years.
Munich also have significant influence within the corridors of power, with their chief executive officer, Karl-Heinz Rummenigge, the acting chairman of the European Club Association and at the forefront of enforcing the incoming financial regulations.
Bedded in at their state of the art, 66,000 seat Allianz-Arena, Bayern currently top the Bundesliga and have ensured passage to the knock out stages of the Champions League as group winners. They boast a squad containing such high profile signings as Manuel Neuer, Franck Ribery, Arjen Robben and Mario Gomez, to compliment the likes of Bastian Schweinsteiger, Philipp Lahm and Thomas Muller, who have progressed through the youth ranks.
Despite only dropping four points in an unbeaten domestic run, City have struggled in their maiden Champions League campaign, resembling last season’s more tentative vintage by approaching their European adventures with the handbrake on. Losses in Germany and Italy leave City needing a win against Bayern and Napoli to drop points at Villarreal if they are to avoid dropping in to the Europa League, which would result in missing out on income in the region of between £10-£15m.
Despite their considerable wealth, City can ill afford to miss out on potential revenue streams if they are to reduce the £197m loss recorded for the last financial year. They will need to meet UEFA’s requirements of a maximum £39m loss between now and 2014 if they are to avoid sanctions, which could include expulsion from European competition. With £174m in wages, £21m more than their entire turnover, that is likely to prove a far more difficult challenge than any they are likely to encounter on the pitch.
With income rising by 22.5%, increased television and commercial earnings, a £350m, 10-year shirt sponsorship and stadium naming rights deal with Etihad airlines, City are confident of bridging the gap between spending and earnings. Regular and continued participation in the Champions League is a significant factor in these plans and elimination at the group stages would prove to be an unexpected setback.
The odds are stacked against Manchester City’s progression from the ‘group of death’ and if Napoli progress in their place, it is sure to smart as the Neapolitans are fellow newcomers and were assembled for considerably less than Roberto Mancini’s side. With a five point cushion at the summit of the Premier League, City will be back next season, stronger, more experienced and, if they want to continue competing at the highest level, a far healthier balance sheet.
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