The Premier League club Sunderland has announced an annual loss of £25.5m in a year of "growth and development".
The loss, for the year to July 2010, is £2m deeper than for the previous year.
Sunderland's chief executive Steve Walton said the club was "facing challenging economic times, both nationally and regionally".
Turnover rose to £65.4million but operating expenses - which include players' wages and utilities charges - also went up, to £70.4million.
During the period Sunderland, known as the Black Cats, spent £26.2m on transfers, signing 10 players and taking three more on loan.
Mr Walton said: "There has been significant investment made to improve our playing squad and we are now starting to see the benefits of that investment."
He said the support of owner Ellis Short put the club in a secure position.
Mr Short has converted a further £19m of loans into shares in the club.
The figures do not include Darren Bent's £18m move from Sunderland to Aston Villa, which was announced last month.