Manchester City halved its financial losses during its run to the Premier League title last season, and hopes to avoid breaching UEFA's Financial Fair Play regulations again.
City on Wednesday reported losses of 23 million pounds ($36 million) in 2013-14, including a 16 million pound ($25 million) UEFA penalty due to the previous fiscal year's losses of 51.6 million pounds ($81 million).
City said it expects to make a profit in 2014-15, having slowed the spending initially required to revamp the squad to turn the club into a power after the 2008 takeover by Mansour bin Zayed bin Sultan Al Nahyan. The member of Abu Dhabi's ruling family has invested more than 1 billion pounds ($1.6 billion) since the takeover — 160 million pounds ($251 million) alone in the last year.
City still disputes the FFP sanction, but said it believes the latest finances comply with UEFA's allowed losses when spending on youth infrastructure is factored in. City was told by UEFA to cut limit deficits to 10 million euros ($12 million) in 2014-15, having been ordered to curb its spending.
In a sign of the club's growing clout since the Abu Dhabi takeover and rising broadcast revenue, turnover has broken the 300 million pound ($471-million) mark for the first time — reaching 347 million pounds ($544 million).
"We have moved beyond the period of heavy investment that was required to make the club competitive again, it is commercial growth of the kind we are seeing today that will underpin and support our operations in the future," City chairman Khaldoon Al Mubarak said in a statement.
City, which hadn't won the English title since 1968 before the takeover, had to offer large wages to entice top players to the club that lived long in the shadow of trophy-laden neighbor Manchester United.
But City, which won the 2012 and 2014 Premier League, was able to cut its wage bill by around 12 percent in 2013-14 to 205 million pounds ($322 million) — 59 percent of turnover compared to 86 percent a year ago.
While City has overhauled the infrastructure around the Etihad — a new academy complex is due to open next week — it has also expanded globally.
A Major League Soccer expansion team, New York City FC, will start playing next year after being formed with the NY Yankees, which has a minority stake.
Earlier this year City bought Australian side Melbourne Heart, which has subsequently been renamed Melbourne City, and also acquired a stake in Japanese team Yokohama F Marinos from carmaker Nissan.
In the Premier League, City is in second place, six points behind Chelsea after winning 4-1 at Sunderland on Wednesday.
Rob Harris can be followed at www.twitter.com/RobHarris