By Ed Attwood
Mammoth sponsorship deal will need to conform with new financial fair play rules, media report says
European football’s governing body is likely to take a closer look at the estimated $642m 10-year sponsorship agreement between Manchester City Football Club and UAE national airline Etihad, according to reports in the British press.
The deal, announced last Friday, will provide a boost to Manchester City’s bottom line; the Abu Dhabi-owned club has announced losses of $342m over the last two years.
UEFA’s new Financial Fair Play rules – which were set up to ensure that clubs are living within their means – mandates that teams may not lose more than $64m over the three years to 2014-2015.
All clubs must also effectively break even by 2018 or risk being ejected from European competition.
The governing body also requires that clubs demonstrate that they have received market value for any deals to prevent teams from being effectively ‘subsidised’.
"UEFA will use relevant experts to make assessments as to the fair value of any major sponsorship deals, using appropriate industry benchmarks," a UEFA spokesman told The Independent on Sunday newspaper.
"These will then be considered by the Club Financial Control Panel, together with any relevant information the clubs present regarding the deals, when they assess the break-even requirements."
Etihad’s deal with Manchester City will see the English club’s Eastlands home ground renamed the Etihad Stadium, effective immediately. The contract also extends the airline’s sponsorship of the team’s shirts.
Dubai airline Emirates paid an estimated $158m to secure shirt sponsorship and stadium-naming rights with London side Arsenal over a 15-year period in 2004.
Two years ago, Etihad also secured naming rights over the Telstra Dome in Melbourne for five years, with options for a further five. The value of the deal was undisclosed, but the Australian Herald Sun newspaper has put the cost of those naming rights at between $5m and $8m a year.
Getting that much endorsement from a company that never made a profit itself is fishy and City will beat this. I guarantee it. But wait till you see what Chelsea, Milan and Madrid are cooking up. I just wish we could have these owners over there in the US. Owner who just want to win, you know? never care about profits. We have lockouts in both the NBA and the NFL because owners want more money. Think about that when you see what the owner of the Man City and his family are doing. But what City will have tough time is getting rid of all these players, unless they give them away for free.
How funny; a corrupt body investigating a football club it suspects is trying to get around it's own dubious new fair play rules!