By David Gold
July 8 – Manchester City has announced a 10-year deal with Etihad Airways worth a potential £100 million, which involves renaming their stadium and shirt sponsorship, marking a significant step towards compliance with UEFA’s financial fair play rules, though the nature of the deal could attract attention from Europe’s governing body.
As part of the deal, Eastlands, the club’s ground, will become known as the Etihad Stadium, with the Etihad airline announcing a new flight service between Manchester and Abu Dhabi that features a plane with Manchester City branding.
Garry Cook, chief executive of Manchester City, said: “We are delighted to be expanding our relationship with Etihad Airways through this comprehensive partnership agreement.
“Most importantly, in addition to delivering significant revenue at a key stage in the Club’s evolution, the agreement creates exciting opportunities for our two organisations to cooperate more deeply commercially and on media and community initiatives in the future.”
James Hogan, Cook’s counterpart at Etihad Airways, added: “This is a game-changing partnership agreement that redefines the traditional sports sponsorship paradigm.
“It is a once-in-a-lifetime opportunity for two iconic brands that share the same vision to promote far-reaching global awareness and business growth.
“Etihad’s work with Manchester City Football Club has already yielded a significant return on our investment and we are thrilled to build on our relationship.”
The UEFA financial fair play regulations, which come into force from next season, state that clubs must break even and will not be allowed to post losses of more than £40 million during the first three years of the rules coming into effect.
Last year City made a loss of £121 million, a 31 per cent increase on the previous year, though spending on new signings has decreased since.
Included in the fair play regulations is the stipulation that commercial deals will be subject to market value tests and that a club’s owner cannot artificially inflate revenue by signing huge deals for shirt sponsorships or naming rights to grounds.
Arsenal sold the naming rights to their new stadium, the Emirates, when they moved in 2006 and receive £4 million per year in a deal which came to £60 million over its 15 year duration.
Manchester City will take £100 million over 10 years, making their deal twice as lucrative as that signed by their Premier League rivals, who arguably held a higher profile in world football at the time of their sale of naming rights.
As a result, questions will inevitably be asked over whether City have inflated the value of their rights and the fact that they have signed a deal with an airline financed by the Abu Dhabi government, given that the Abu Dhabi United Group own Manchester City and the club’s owner Sheikh Mansour is involved in that government, will raise suspicions.
What will help if UEFA did look into the true value of the deal is that it is thought Arsenal undervalued the naming rights for their stadium, whilst City could point to their qualification for the Champions League as evidence that the value of the rights will increase substantially in the coming years.
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