Man City deals set for scrutiny as losses drop

 
Frank Dalleres
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MANCHESTER City made £47m from the sale of intellectual property last season, helping them to slash losses and boost their chances of meeting European financial fair play (FFP) rules.

City banked £22.5m from selling intellectual property to related parties, plus a further £24.5m from selling to third parties – deals that could be linked to their setting up of a New York franchise.

Those transactions helped City reduce annual losses from £97.1m to £51.6m, as a 33 per cent increase in commercial income lifted revenue to a club record £271m, from £231m in 2011-12.

Cumulative losses over the past two seasons total £149.5m, far in excess of the £37m sum permitted in governing body Uefa’s FFP rules, leaving City at risk of a ban from the Champions League, in theory.

Yet the club could still meet their obligations once adjustments are made for exempt expenses, such as spending on youth development, infrastructure – stadium and training facilities – and contracts signed before 2010. That last element, which includes big earners such as Carlos Tevez, Robinho and Emmanuel Adebayor, could be as much as £80m, bring them close to the FFP target.

Uefa are likely, however, to scrutinise the £22.5m of related-party transactions – £34.3m over both years – having decreed that such deals must represent “fair value”. The same test is likely to be applied to City’s £400m contract with airline Etihad – like them, an operation backed by Abu Dhabi.

Uefa can impose a range of punishments, including bans, to those who fail to abide by FFP. It is expected to announce its findings before the end of the season.