Manchester City yesterday announced an annual loss of £194.9m, the biggest ever recorded in English football.
The figures, for the 2010-11 season, included a wage bill of £174m, which was actually higher than the club's total turnover of £153m.
The record loss is further evidence of how far the City owner, Sheikh Mansour, is willing to go to fund their rise to the top. The figure of £194.9m comprises a net operating loss of £160.5m plus another £34.4m in written-off player contracts. It dwarfs the previous record loss of £140m, sustained by Chelsea in 2004-05. City are confident, though, that this was always going to be the year their losses bottomed out.
Club chief operating officer Graham Wallace, insisted that the figures would improve: "Our losses, which we predicted as part of our accelerated investment strategy, will not be repeated on this scale in the future."
Beyond the operating loss itself, Sheikh Mansour has invested a further £290.9m in the club, in new equity. However, City will need to bring down their losses to accord with Uefa's financial fair play rules, which allow for a €45m (£38.5m) loss over three financial years from this season to 2014-15. City's are liaising closely with Uefa over the details of financial fair play.
The figures cover a period in which City paid out heavily on new players, spending a total of £156.5m on transfers including Edin Dzeko, Yaya Touré, David Silva and Mario Balotelli, all of whom cost more than £20m each. City are confident now that they no longer pay a premium on new players.
But their expensive staff naturally means a high wage bill, and City's is now the Premier League's highest, overtaking Chelsea (£172m). The total, £174m, increased from £133m the previous year.
Although City's spending on wages is now higher than their turnover, they are taking in more money than ever: £153.2m last year, up by 22.5 per cent. This is been helped by a remarkable 49.7 per cent increase in commercial revenue, up to £48.5m.
They continued to spend on players yesterday, though, as it was announced that Adam Johnson and Pablo Zabaleta had signed new contracts at City.