You could sense the rage and indignation around the country as the news was announced. You could hear a collective tut and a million heads being shaken. Football had died (again). Manchester City had announced their annual financial results, and had posted the biggest losses in football history, a cool £195m for the 2010/11 financial year. They’re Manchester City, they spend what they want.

Well not if UEFA have their way of course. And the inevitable response to the announcement was to reignite the debate over how they could possibly meet UEFA’s new Financial Fair Play (FFP) rules.

Obscene losses? Perhaps. But less obscene than owners who wrack up debt, or owners who asset-strip clubs, or are there for personal gain alone. At least the money being spent is their own – but that’s an argument that has already been done to death (but will have inevitably resurfaced over the past few days).

Rival fans might scoff at how the huge losses will cause City to fail to meet FFP rules, but it was these rules that bizarrely helped cause the losses in the first place. City’s owners knew the day they took over what was on the horizon, and as Brian Marwood has stated in the past, the club embarked on an accelerated programme of expansion and purchases, “attempting to squeeze ten years’ development into three”.

Equally bizarrely, due to the ruling on “trends”, the huge loss might actually benefit City. Why? Well the FFP rules are far from set in stone and far from black and white. The key to meeting the requirements is not simply to spend only what you earn, but to make movements towards that point (at least for the next few years). So for now City and other clubs have to be seen to be taking steps to narrow the gap between outlay and income, and City will undoubtedly do this – this year’s figures are certain to be the worst by a long way, so the only way is down from now on (or up, depending on how you look at it).

As long as the losses reduce each year, the club has little to worry about. Thus City have deliberately posted bad results – they have used last year’s accounts to lump in all the deadwood and heavy purchasing before the rules get stricter – £35m of those losses are precisely for the writing off of deadwood, a one-off cost of players City know they won’t get a good return back on. After all, if your wife told you to start behaving better as of next Sunday, you could be tempted to burn down the house on the Saturday (I could have used a better example to be honest). So whilst in theory a club can only lose €45m over the next three seasons, the fact is that UEFA will probably be quite liberal with that figure.

What’s more, UEFA are highly unlikely to ban a “big” European club from the Champions League – in a sport ruled by money at the highest levels, it simply isn’t in their interest. Ian Ladyman of the Daily Mail said as much on Friday, reporting that Michel Platini has softened his stance on punishing clubs, looking at fines rather than expulsions, a system that will not unduly worry City.

But as mentioned already, City will bridge the gap. Over the weekend came reports of a new kit deal at the end of the season which could be worth an extra £18m per year. City’s huge stadium sponsorship and campus deal is not included in last year’s figures, nor was any income from the Champions League, which City will expect every season now – even if they go out in the group stage, they will earn over £20m.

Click HERE to head to PAGE TWO…