YORK City expect to report an operating loss of £467,000 for the 2011/12 season despite the club’s two winning Wembley final appearances.

The spending of 96 per cent of the club’s income on playing costs, including player and management wages, as well as bonuses, transfer fees and relocation fees, is being attributed as the chief reason for the Minstermen making their biggest losses during eight years of non-League football.

The Press estimates that those playing costs amounted to just over £1 million.

Promotion to the Football League means, however, that the Bootham Crescent outfit expect to break even this season with City now subject to the Salary Cost Management Protocol which, in broad terms, means clubs are restricted to spending a maximum of 55 per cent of their income on player salaries, bonuses, transfer fees and expenses.

The additional Football League central funding the club now receives, including money for the club’s youth programme, will also help.

In the Blue Square Bet Premier, the Minstermen received an annual payment of £35,000 but, as a Football League club, monthly contributions are believed to almost match that donation.

Income from last season’s FA Trophy and Blue Square Bet Premier play-off final appearances totalled £235,000, according to City’s financial management consultant Peter Rookes with the eventual operating loss just £2,000 short of the figure the board expected and budgeted for at the start of the campaign.

The losses have been covered by club owners JM Packaging, who have again loaned the money on an interest-free basis repayable on the move to a new stadium. That sum now stands at £1.32 million.

Rookes added that the sizeable investment in playing costs was justified by the club’s success on the field in 2011/12.

Commenting on the club’s accounts for the year ending June 30, 2012, which are currently being audited and are expected to be published at the end of March, Rookes said: “These financial results are in line with the club’s expectations.

“This is the cost of promotion to the Football League. Throughout the club’s time in the Conference, operating losses of this size were inevitable if York City wanted to put together a team that would compete and challenge for promotion.

“The accounts show that maximum resources were made available to Gary Mills to enable promotion to the Football League. Ninety six per cent of club income was allocated to playing costs including player and football management wages and bonuses for on-pitch success.

“Income from two successful Wembley trips totalling £235,000 ultimately helped keep the losses in line with the original budgets.”

The latest figures mean the Minstermen racked up approximately £2.22 million in operating losses during their eight seasons outside of the Football League.

Previous promotion attempts saw the club make £274,310 losses when Martin Foyle’s team missed out on promotion to Oxford in the play-off final 2010 with those figures including receipts from the Wembley match, an FA Cup run that ended in the third round at Premier League Stoke and the £50,000 sale of Adam Boyes.

Similarly, when Billy McEwan guided the club to the play-offs in 2007, the club lost £270,000.

Last season’s losses beat the previous highest figure during the Conference era of £414,000 in 2007/8 when McEwan struggled to build on the previous campaign’s success and was subsequently replaced by Colin Walker.

The club’s biggest source of income last season was gate receipts, although they only contributed 56 per cent of the cost required to fund the football team.

Other sources of income, meanwhile, remain minimal due to limited commercial opportunities at Bootham Crescent.

On that matter, Rookes said: “The club board has once again this season given the football manager the best budget possible within the strict financial constraints set by the League. However, while the club remains at Bootham Crescent, it is severely restricted in its sources of commercial income and disadvantaged compared to other clubs in the division with modern stadia.

“This again illustrates why the board believes that the move to the new ground, providing additional sources of income and reduced costs, is essential in putting the club on a sustainable footing and enabling the team to be as competitive and as ambitious as possible going forward.”