Manchester City’s Debt and Losses Increases to 92.6 Million Pounds
In recent news Sheikh Mansour bin Zayed Al Nahyan has just been forced to convert exactly 305 million pounds into equity from his loans in order to help the team avoid bankruptcy issues and improve its debt management plan. The soccer club’s losses have increased to a stunning 92.6 million pounds, which is horrible news for the team but has to make UK residents feel a little better about the debt problems and bankruptcy that they are dealing with.
While Sheikh Mansour has no money or real bankruptcy issues, considering he is a member of the ruling family of Abu Dhabi, he has spent millions of pounds on new players that have not brought the results he had hoped for. Since his takeover in September of 2008 the team has been unable to compete with rival Manchester United in the way he had hoped.
The loss of 92.6 million pounds is the second highest loss ever in Premier League history, and is second only to Chelsea’s loss of 132.8 million pounds in 2005. While sales have increased for the debt, it has not helped in terms of a debt management plan and if the increase from a 32.6 million pound loss last year continues, the team could under some major changes.
If there is any fear of true bankruptcy of the team for fans, they can take solace in the fact that Sheikh Mansour gave permission for the team to acquire Robinho for 32.5 million pounds. That is on top of the 100 million pounds that he has thrown at the likes of Emmanuel Adebayor, Gareth Barry, and Carlos Tevez.
The team also made a statement which sounds nothing like they are putting in place a debt management plan, as they have noted that these losses are a sign of things to come for the near future. The major acquisitions may take years to fully pay off, if they ever do, and the team and its owner is just going to have to patient.
That same patience is going to be a virtue for many U.K residents as the recession seems to veering off, yet there is still a lot of work to be done.
On top of signing Robinho, Sheikh Mansour purchased an additional 89.6 million pounds worth of stock in the team in order to show fans and City’s supporters that he is committed to the team for years to come.
The big move from Sheikh Mansour is linked to Chelsea owner’s decision to turn 340 million pounds of loans into equity just as 2009 came to an end. Both moves have a lot to do with the recession and bankruptcy issues that surround the U.K. as the UEFA has adopted a new plan to ban teams from certain competitions if they are carrying too much debt.
What exactly is considered too much debt has yet to be determined, but these moves and new rules are sure to have a major impact on the Premier League for years to come. But it doesn’t look like it is going to change the spending and loaning ways of the big ticket teams in the league to say the least.
