RISING player costs have plunged Bristol City further into the red.

City shareholders today received copies of the club's annual accounts, showing a loss of £1,997,779 on the year that ended on May 31. This compares to a deficit of £882,148 for the previous financial year.

Although football turnover more than doubled to £8.8m (from £4.3m in 2007), staff costs rose to £8.5m (£5.6m in 2007) – a 51 per cent increase, representing 69 per cent of the overall turnover, which was £12.3m.

Increased wages and transfer fees are chiefly responsible for the losses, but City chairman Steve Lansdown says he remains committed to bringing in the players necessary to help the Robins compete at the top end of the Coca-Cola Championship.

Lansdown has always supported City manager Gary Johnson in the transfer market and insists he will continue to do so. But he admits raising revenue to finance new signings will become increasingly challenging during the current economic downturn.

Management and staff received substantial pay increases following promotion from League One in 2007 and again after Johnson's team reached the play-off final last season, and Lansdown conceded: "Competing in the Championship brings its own problems, in particular, controlling the wage bill."

He added: "Everyone focuses on transfer activity when talking about improving the playing squad, but an equally important element of this is the renegotiation of contracts with existing players.

"In fact, one of our biggest challenges going forward is managing player expectations, while at the same time providing the appropriate incentivisation. This also applies to all members of staff throughout the group.

"It is going to be increasingly difficult to keep wages under control if we wish to progress as a football club. What we will work hard to ensure is that we use every means available to bring in quality players at the best possible price and reward as much as possible on a performance-related basis."

These latest figures do not take into account the recruitment of £2.25m club record signing Nicky Maynard from Crewe in the summer or the deals which saw Gavin Williams and John Akinde arrive from Ipswich Town and Ebbsfleet United respectively.

Shareholders and supporters will have an opportunity to quiz Lansdown on matters both financial and football when the club stages its annual general meeting at Ashton Gate later this month.

The AGM will adopt a different formula this year, with the official business being dealt with in a meeting for shareholders only in the Dolman Exhibition Hall at 10.30am on Thursday, November 27.

Lansdown will then host a special presentation for supporters at the same venue in the evening. This will be followed by a question and answer session with City boss Johnson.

Referring to the evening meeting, Lansdown explained: "Shareholders will have priority to attend, but it will also be open to members of the Supporters' Club and Supporters' Trust. Both these organisations are shareholders in the club and I believe it is essential to open up discussion on how the club is run and what the future holds for their members and individual shareholders."