Uefa to scrutinise City’s £400m Etihad sponsorship deal

zocoss SG

Changing brand: Manchester City are set to rename their Eastlands ground the Etihad Stadium

Manchester City will reinforce their standing as English football's wealthiest club by confirming an estimated £120million deal to rename their Eastlands ground the Etihad Stadium.

Though details of the stadium naming rights deal with City's shirt sponsors Etihad Airways were being kept under wraps, it is thought to be worth £10-12million a year over the next 10 years and is the most most lucrative deal in the club's history.

Concerns were immediately expressed over whether the deal might contravene UEFA's financial fair play guidelines, and City are likely to face an investigation.

Under the new rules, clubs have been warned about spending more than they earn and about sponsorship deals that may appear to be for inflated amounts.

If it is felt a figure has been fixed to give income levels an artificial boost, UEFA could step in and take action.

At more than double the amount Arsenal received for naming rights at The Emirates Stadium, City's deal may well raise eyebrows and is sure to be looked into by the Premier League. Checks will be made to ensure Etihad's outlay can be justified and that UEFA's guidelines have not been breached.

City have been exploring ways of generating extra revenue, to meet the criteria and enable their big spending to continue, and are delighted with the agreement they have struck with the United Arab Emirates' national airline.

Since acquiring City in September, 2008, Sheikh Mansour has ploughed close on £1billion into transforming their fortunes and competing on at least an equal footing with near rivals Manchester United.

Feeling Blue: City will claim Arsenal have undersold naming rights at Ashburton Grove

It is understood City's heirarchy are unconcerned about any investigation by the Premier League or UEFA and confident they can satisfy all the fair play conditions.

They will argue that their increasingly high profile, and the exposure from worldwide media coverge, will equate to an acceptable return for Etihad's massive investment.

They could also claim Arsenal may have undersold naming rights at Ashburton Grove, when they struck a £100million-plus 15-year deal with Emirates in October, 2004.

That figure included around £48million for an eight-year shirt sponsorship agreement with Emirates and meant they were charging only around £4million a year for the new ground to be named after the airline.

City were always looking to go down the same path, after persuading Manchester City Council to let them sell naming rights last year, and were in no doubt they could attract significantly higher bidders.

Their new agreement with a company who already sponsor their shirts to the tune of £2.3million a year could prove telling in the new era of financial restraint, particularly after losses of almost £120million last year.

Signed, sealed, delivered: Clichy arrived on a £7m deal from Arsenal earlier this month

Signed, sealed, delivered: Clichy arrived on a £7m deal from Arsenal earlier this month

Gunning for a move: Nasri could follow former Arsenal team-mate Clichy to Man City in a £20m deal

Such a deficit had to be addressed, and today's announcement will be seen as a significant step towards being able to continue the sort of spending that has become commonplace at Eastlands in recent years.

They are hopeful of landing £20million-rated Arsenal midfielder Samir Nasri, after already paying Partizan Belgrade £6million for defender Stefan Savic and £7m for Arsenal defender Gael Clichy.

They are also being strongly linked with a £40million bid for Atletico Madrid frontrunner Sergio Aguero, also wanted by Real Madrid and Juventus.

zocoss SG

Welcome to the Ethihad stadium! City's new deal is worth £400m

Sitting on a fortune: Jo, Wayne Bridge and Craig Bellamy have been left behind as City go on America tour

Europe's leading clubs will petition UEFA to block Manchester City's new £400million endorsement deal.

They want City's ground and shirt sponsorship contract with Etihad Airlines outlawed because they believe it has been artificially inflated in an attempt to balance the books.

UEFA's new Financial Fair Play rules insist clubs live within their means and City, who have incurred losses of £213.5m over the last two years, had little hope of complying before the huge deal.

The governing body also demand that clubs demonstrate they have received market value for any deal, to prevent owners from subsidising clubs through companies that are closely associated with them. UEFA's Independent Club Financial Control Panel will investigate the Etihad deal but rivals want to pressure them into action.

If UEFA do outlaw the deal, boss Roberto Mancini could see his spending plans curtailed.

Opposition clubs have been emboldened by the fact the contract is a world record, outstripping even the remarkable £18m-a-year stadium naming rights deal the New Yorks Mets, a much-more established sports brand, have with Citibank.

The fact that Etihad was set up by the Emir of Abu Dhabi, Sheik Khalifa, who is the brother of City's owner, Sheik Mansour, has also fuelled their suspicions.

Etihad is the national airline carrier of Abu Dhabi and itself has never made a profit since it was formed in 2003, though it is expected to make money this year.

Rock^Star SG

Wah lau....very sad to see decent players like the 3 above being left out. They would have walked into the first team of most in the premier league.

zocoss SG

• Arsenal manager calls for Uefa to investigate sponsorship
• City say comments are 'unfounded and regrettable'

Arsène Wenger

Arsène Wenger has accused Manchester City of attempting to bend Uefa's financial fair-play rules via their new £400m sponsorship deal with Etihad Airways and he said the arrangement threatened not only the incoming legislation but the credibility of the European game's governing body.

He believes that Michel Platini, the Uefa president, is duty-bound to investigate the City deal and he ramped up the pressure on his fellow Frenchman, calling it "Platini's big test".

"It raises the real question about the credibility of the financial fair play," Wenger said. "That is what this is all about. They give us the message that they can get around it by doing what they want. It means financial fair play will not come in. It is as simple as that. I can understand how they do it but it raises the real question. The difficulty and the credibility of the financial fair play is at stake.

"Plus, if the financial fair play is to have a chance, the sponsorship has to be at the market price. It cannot be doubled, tripled or quadrupled because that means it is better that we don't do it and we leave everybody free. That can be defended as well, but if they bring the rules in they have to be respected."

The Arsenal manager had reacted with incredulity and no little scorn when he heard that City had struck the world-record 10-year deal with the company that is owned by the Abu Dhabi government and has close links to the City owner, Sheikh Mansour, a member of the Abu Dhabi royal family.

The arrangement will see City's ground, which is owned by Manchester city council, renamed the Etihad Stadium. It will also provide financial backing for what will be known as the Etihad Campus, the area of land around the ground, and it will extend the company's sponsorship of the club's shirts; Etihad already pay £2.3m a year for the rights.

In contrast, Arsenal's arrangement with Emirates, which was announced in 2004, was valued at £90m over 15 years. Around £48m of that came via shirt sponsorship, with the naming rights worth £2.8m a year. "We must have done a bad deal," Wenger said, dryly.

Last night City hit back, describing Wenger's comments as "unfounded and regrettable". In a statement, the club said: "The financial details of the comprehensive agreement announced last week between Manchester City and Etihad Airways remain confidential and figures being speculated about are not accurate."

However, the elements at the heart of the agreement include, among others, the securing for 10 years of one of the Premier League's top-ranked media value shirts in 2010-11; the 10-year naming rights for the Etihad Stadium and the naming rights for the Etihad Campus which will evolve dramatically over the next decade.

"Manchester City is a proactive member of the European Clubs Association and is working actively and with transparency with regard to financial fair play. In light of these facts, recent comments about the partnership by some observers are unfounded and regrettable," the statement said.

Uefa say that they are aware of the City situation and that their experts "will make assessments of fair value of any sponsorship deals using benchmarks."

Speaking in Kuala Lumpur while on Arsenal's pre-season tour, Wenger offered the impression that he presumed Uefa would investigate whether Etihad had paid an inflated price. One condition of the Uefa regulations is that sponsors with close links to club owners pay fair sums.

"It looks to me that Platini is very strongly determined on this," Wenger said. "He is not stupid. He knows that some clubs will try to get around that and, at the moment, I believe they are studying, behind closed doors, how they can really strongly check it. That is where the financial fair play is at stake."

The new rules apply from next season, although Uefa will not begin assessing club accounts until the 2013-14 season, when they will assess them from the previous two seasons and stipulate that clubs break even, subject to an "acceptable deviation" of €45m (£40m) over the period. If clubs fail to meet the criteria, they face being barred from European competition. City's last financial figures showed a £121m loss and the next set are expected to be worse.

Rock^Star SG

He'a always the first to complain haha. Scared cannot compete.

zocoss SG

By Nick Harvey in Kuala Lumpur

Speaking in Kuala Lumpur, where on Monday Arsène Wenger accused City of “financial doping”, Ayre suggested that the 10-year sponsorship agreement with Etihad may be an illegal ‘related-party’ deal, which financial fair play specifically outlaws.

When it comes into force next year, clubs will have to record aggregate losses of no more than 45 million euros (£39 million) or face exclusion from European competition. However, clubs cannot try to offset those losses by sponsoring themselves. Since the Bin Zayed family own Manchester City and Etihad, it may be all too literally a related-party deal.

“Is Etihad, Manchester City and Sheikh Mansour a related party?” Ayre said. “If they are, then it is up to Uefa to rule on it. When I spoke at Soccerex earlier this year, I was on a panel about financial fair play. The guys from Uefa said there would be a robust and proper process about related-party transactions.”

In Boston this week, Sir Bobby Charlton said it would be unthinkable that Manchester United would rename Old Trafford saying the name was “too important”.

In commercial terms for an airline that has never made a profit, the deal is ludicrously overpriced – especially for a stadium that already has a generic name. Ayre argues that, although some of the £400 million will be invested in redevelopment work around what will be probably still be called Eastlands, the cost of the agreement may also come into conflict with Uefa regulations that transactions must have a ‘fair value’.

“It has never happened in Europe that a football club has renamed its stadium and had real value,” Ayre said. “It was the City of Manchester Stadium or Eastlands for the last nine years and now it is going to be called something different – and yet someone has attached a huge amount of value to that. There is no suggestion that you can rename your stadium and generate that amount of value. Mike Ashley tried it at Newcastle but nobody calls it the Sports [email protected] James’ Park and it certainly didn’t have that kind of value.”

Although the club’s director of football, Damien Comolli, has this week overseen a series of trials in China, Ayre was cautious when asked if Liverpool would sign Asian players – something their main sponsors, Standard Chartered, want them to do.

“What we wouldn’t do is sign a player just because he is Asian; that won’t deliver anything in the long term,” said Ayre, who spent many years in Hong Kong and Malaysia before coming to Anfield as first commercial and then managing director.

“United have got the best value in Ji-Sung Park. He is a real player who can perform at the top level and there aren’t many of them about.”

With Arsenal having already played in Kuala Lumpur and Chelsea due in Malaysia next week, Liverpool know there is competition in a region that has been traditionally ‘theirs’. However, Ayre doubted that the two London clubs would truly break through.

“I happen to believe quite strongly there are two brands in English football that are truly global – Liverpool and the team from down the M62,” he said in a week when Liverpool’s two games at the Bukit Jalil Stadium are likely to draw more than 100,000.

“You have seen the scale of what we do in Asia comparative to other clubs. That is not to say people will never catch us up but it will be quite a hard thing to do. It is not just about winning trophies, it is about building a year-on-year legacy rather than just going out and signing loads of people.”

Sergio Aguero, targeted by City as a potential replacement for Carlos Tèvez, has heightened expectations of a move to England. “I do not see myself at Atletico. I know my representatives are working and I’d prefer to play in Spain or England. Those are the two best countries,” he said.

sg_forum SG

Wah lau....very sad to see decent players like the 3 above being left out. They would have walked into the first team of most in the premier league.

that is the sign of quality they have in the team. Their reserve team can actually compete in the PL as well...and am sure will finish on top half if given the chance...

zocoss SG

• Uefa to decide if £400m deal circumvents financial fair play
• Club's figures, due in September, expected to show big loss

Uefa president Michel Platini

Uefa has confirmed it is scrutinising Manchester City's sponsorship deal with Etihad Airways to see whether the club have taken advantage of their Abu Dhabi links to help circumvent the incoming financial fair-play regulations.

The 10-year agreement will be worth close to £400m for City but has led to complaints that the money involved is out of proportion with the scale of the deal.

City have been looking at ways to increase their revenue to help meet the fair-play regulations and avoid any risk of being denied a place in the Champions League in coming years, but Uefa wants to clarify that Etihad, run by the Abu Dhabi government, has paid a market price.

"I have some questions, yes," Jean-Luc Dehaene, the chairman of Uefa's Club Financial Control Panel, said. "If we see clubs that are looking for loopholes we will act. It is not enough to say: 'We've got a sponsorship contract and that's OK' if the contract is out of line."

Arsène Wenger, the Arsenal manager, has complained that the Etihad deal "raises the real question about the credibility of financial fair play" and Liverpool's managing director, Ian Ayre, has also spoken of his concern. "Are Etihad, City and Sheikh Mansour related parties? If they are, it's up to Uefa to rule on them," he said.

City made a loss of £93m in 2008-09, £121m in 2009-10 and the latest figures, due in September, are expected to be even worse, despite an increase in turnover.