Manchester City have confirmed a £7.1million loss for the six months ended November 30, 2006.
The figure comes at a time when Blues are in discussions with a 'number of interested parties' over significant investment in the club.
While the loss compares badly with the £13.2million profit from last season, club officials have pointed out that sum included the £21million received from Chelsea for the sale of Shaun Wright-Phillips.
The reasons for the loss are fairly obvious, with turnover falling by 9% to £25.7million, while wage costs rose 4%, the equivalent of £1.8million.
The Blues remain bullish about the future though, pointing out income has dropped partly because of the one fewer home game played during the same period last year, while Eastlands has also played host to two fewer pop concerts.
And, with City remaining in the FA Cup and looking forward to a sixth round tie against either Arsenal or Blackburn, the possibility of extra prize money remains.
Chairman John Wardle, mindful of the need for City to remain in the top flight this term to take advantage of the massive increase in TV revenue next season, said: 'It is the board's strategy to run a higher wage bill in this very important year for the club.'
City currently lie 15th in the Premiership, seven points above the drop zone, but face a hugely important clash with Wigan at the weekend.