By Mark Baber
March 10 – Manchester City are poised to sign a massive £80-million-a-year sponsorship deal with Etihad, according to rumours in the British press. The new deal would mean a renegotiation of the current £400 million deal.
However, how a renegotiation of the existing 10-year sponsorship package will be justified under UEFA rules, particularly pertaining to the condition that stipulates sponsors with close links to club owners pay a fair price, remains to be seen.
The rumours come on the back of Manchester City reporting a £23 million loss for 2013/14, by far the biggest loss reported for any Premier League team so far this year.
Man City are four years into a 10-year agreement with the national airline of Abu Dhabi.
Whilst the original £400 million deal with Etihad was heralded as “the largest deal of its kind in sport,” and “Reinforcing City’s position as a football club with unprecedented financial power.” Subsequent deals by Manchester United with Chevrolet for £47 million a year and Chelsea with Yokohama Rubber for £200 million over 5 years have raised the bar.
Although UEFA have ruled that the original deal with Etihad was not a ‘related party’ arrangement, despite the Abu Dhabi connection between the owners and sponsor, any “renegotiation” which involves the airline paying double what had been already agreed is bound to raise eyebrows, even if it comes with an extension.
City were fined €60 million for breaking financial fair play rules in May 2014. UEFA took the view that they had exceeded the permitted losses over the course of the 2011-12 and 2012-13 seasons. Two-thirds of which will be returned if they fulfil their financial obligations over the next few years.
As the inflation in Premier League commercial income continues, in tandem with increased media income, one thing is for sure – quite a few English owners who sold out to foreign investors will be regretting their decision.
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