A financial disaster waiting to happen? Ryan Baxter takes a look at the figures.
Manchester City’s billionaire owners have wasted no time in splashing the cash in an effort to win silverware and establish the club among the world’s elite.
They’ve spent an unbelievable £216.5m on players in the last 12 months and look set to continue their outrageous spending spree after the owners pledged a further £100m to manager Mark Hughes in January if he can identify targets.
Some experts even believe that Man City’s owners have spent more money in a year than Zimbabwe has in its federal bank reserve!
The figures don’t even take into account the £100,000+ a week average that players like Gareth Barry are taking home each week!
Return on investment?
It’s all well and good spending that kind of money if you’ve got cash to burn, but have the owners ever thought about how long it will actually take them to make a return on their investment?
The figures suggest that even if they win every competition in European football for the next 20 years, they still probably won’t make a profit!
So let’s take a look at what Man City can potentially earn, and what they’ll realistically earn, over the next couple of seasons.
Let’s start with television revenue. This is the largest source of income for most Premier League clubs – and Man City are no exception.
City will net around £40m in television deals as a reward for their 10th place finish last season.
A massive amount of money you may think – and it is – in normal people terms. But take into consideration the fact that City is the first club in Premier League history to spend £100m a year on wage bills alone!
Among City’s top earners are miniature Brazilian playmaker, Robinho (£160,000 a week), Argentinean barrel-shaped striker, Carlos Tevez (£150,000) and Togolese beanpole, Emmanuel Adebayor (£150,000), with Gareth Barry and Kolo Toure each taking home £120,000 a week.
At the moment, Premier League champions and local rivals, Manchester United, rake in £55m in television deals. So even if City do miraculously win the title this season, they’ll still face a shortfall of £45m in the wages vs. tele deals battle.
Potential earn for 2009/10: 1st, £55m
Realistic earn for 2009/10: 5th, £45m
The Premiership hands out money on a sliding scale depending on the club’s league finish. Last season, Man Utd pocketed over £15m for winning the title, whereas the last placed team, West Brom, were awarded just over £1m.
City winning the league would just about cover the cost of Kolo Toure (£14m).
Potential earn for 2009/10: 1st, £15.6m
Realistic earn for 2009/10: 5th, £10.2m
There might not actually be any point in Man City winning the F.A Cup – at least from a financial viewpoint.
With a measly £2m on offer for the winners, it’s only enough to cover Robinho’s wages for three months!
Still, City will have their eye on this trophy and will see winning it as a realistic aim. The prestige of winning the cup would certainly expose them to a worldwide audience, almost definitely picking up some global fans along the way.
Potential earn for 2009/10: Winners, £2m
Realistic earn for 2009/10: Semi finalists, £250,000
Probably City’s most realistic chance of winning silverware this season, the League Cup is one of the least cared about competitions in England and only represents a pitiful £100,000 in prize money for the winners.
City are sure to take this competition seriously as it gives Mark Hughes an opportunity to give his huge squad a run out. At least that’s Gareth Barry’s wages covered for a week – oh, hang on, no it’s not.
Potential earn for 2009/10: Winners, £100,000
Realistic earn for 2009/10: Winners, £100,000
UEFA Cup (Europa League)
City would probably have had a decent run in this newly formatted competition – had they qualified for it.
A 10th placed Premiership finish last season wasn’t enough to give City European football. But Hughes, who is targeting a top four finish this season, will surely deliver European football next season, with a 7th placed finish guaranteeing it.
However, even if they do qualify for the Europa League next season and then go on to win it in 2011, they’ll still only receive a combined total of £4m – and that’s if they win every single match on their way to the final!
Potential earn for 2010/11: Winners, £4m
Realistic earn for 2010/11: Semi finalists, £1.5m
Mark Hughes’ team will definitely have a good crack at breaking into the top four this season – but whether or not they can do it depends largely on Arsenal and Liverpool’s ability to play without any ability.
Let’s say they do finish in a Champions League position this season, the chances of them winning the trophy are slim to none. Many City fans will even agree.
It is a lucrative competition to be in, though. Qualification for it automatically gives the club a handy £3m, plus an additional £2.4m just for participating in the group stage.
A group stage win pockets the club £600,000, with £300,000 just for a draw. Quarter finalists receive £2.5m, semi finalists get £3m and the winner is awarded a massive £7m (£4m for the runners up.)
City’s United Arab Emirates based owners have pinpointed a Champions League trophy as their main objective, but they may be waiting a few years (or decades) to realise their goals – and even then, it wouldn’t cover Carlos Tevez’s transfer fee!
Potential earn for 2010/11: Winners, £21.5m
Realistic earn for 2010/11: Non-qualification, £0m
City’s owners will struggle to ever make a penny back on their investment. They must either be in it for the love of the game or for the celebrity status that accompanies owning a Premier League club.
This year, their potential earnings total £72m (if they win every competition.) Next year, their potential earnings total £93.5m (that’s again winning every competition, including the Champions League.)
A tidy sum you may think, but when you’ve spent more than £320m on signing players and paying their wages in a year, it suddenly sounds like a pittance.
Realistically, City will rake in £55m this season and £56.5m the year after (qualifying for the Europa League rather than the Champions League.)
And taking into account the £100m spent on wages each season, our computers have calculated that City’s owners will begin to make a profit… never.
Ryan Baxter writes for www.ballsandwhistles.com