Manchester City to test financial fair play with naming rights deal
• Etihad Airways to buy naming rights for Eastlands
• City stand to earn more than £100m from deal
Manchester City to test financial fair play with naming rights deal | Football | The Guardian
Manchester City are close to announcing a record sponsorship deal to allow Etihad Airways, the airline owned by the Abu Dhabi government, to take naming rights for the stadium in an agreement that will be a significant boost to the club's attempts to fall in line with Uefa's financial fair-play rules (FFP).
The deal will be confirmed at a news conference at Eastlands on Friday, with the club potentially in line to bank well in excess of £100m over the course of a long‑term arrangement.
The details have not been disclosed but City's new position within the game, backed by the enormous wealth and ambition of the Abu Dhabi United Group and their involvement in the Champions League for the first time, means they could bank an estimated £10-£15m a year from the airline and possibly even more.
The naming rights could provide an early test, however, for Uefa's FFP panel, which requires any sponsorship deal with a party related to the club's owners to pass a "fair value" test.
City have been trying to increase their revenue to meet Uefa's new criteria but Etihad's close links with the club's owners will almost certainly mean Uefa seek to ascertain that the airline has not paid an inflated price.
The new rules apply from next season, although Uefa will not begin assessing club accounts until the 2013-14 season. At that stage the licensing unit will assess club accounts from the previous two seasons, requiring clubs to break even subject to an "acceptable deviation" of €45m (£40m) over that period. City's last financial figures showed a loss of £121m and that figure could be even higher when the next statement is published in October.
Etihad already pay £2.3m a year as the club's shirt sponsor and, if everything is approved with the naming rights, the deal should go a long way to smoothing the club's thinking in terms of the new financial rules.
To the frustration of the manager Roberto Mancini, City's owners have placed new spending constraints on him this summer, acutely aware that if they ignore FFP they could actually be removed from the Champions League. While Manchester United have already spent £50m this summer, so far City have only signed Gaël Clichy from Arsenal for £7m and the Montenegro defender Stefan Savic for a similar amount.
The governing body have said they will use benchmarking exercises and specialists in the field to determine whether sponsorship and naming-rights deals are above their true market value. If it is deemed that they are, the excess must be deducted from break-even calculations.
• Etihad Airways to buy naming rights for Eastlands
• City stand to earn more than £100m from deal
Manchester City to test financial fair play with naming rights deal | Football | The Guardian
Manchester City are close to announcing a record sponsorship deal to allow Etihad Airways, the airline owned by the Abu Dhabi government, to take naming rights for the stadium in an agreement that will be a significant boost to the club's attempts to fall in line with Uefa's financial fair-play rules (FFP).
The deal will be confirmed at a news conference at Eastlands on Friday, with the club potentially in line to bank well in excess of £100m over the course of a long‑term arrangement.
The details have not been disclosed but City's new position within the game, backed by the enormous wealth and ambition of the Abu Dhabi United Group and their involvement in the Champions League for the first time, means they could bank an estimated £10-£15m a year from the airline and possibly even more.
The naming rights could provide an early test, however, for Uefa's FFP panel, which requires any sponsorship deal with a party related to the club's owners to pass a "fair value" test.
City have been trying to increase their revenue to meet Uefa's new criteria but Etihad's close links with the club's owners will almost certainly mean Uefa seek to ascertain that the airline has not paid an inflated price.
The new rules apply from next season, although Uefa will not begin assessing club accounts until the 2013-14 season. At that stage the licensing unit will assess club accounts from the previous two seasons, requiring clubs to break even subject to an "acceptable deviation" of €45m (£40m) over that period. City's last financial figures showed a loss of £121m and that figure could be even higher when the next statement is published in October.
Etihad already pay £2.3m a year as the club's shirt sponsor and, if everything is approved with the naming rights, the deal should go a long way to smoothing the club's thinking in terms of the new financial rules.
To the frustration of the manager Roberto Mancini, City's owners have placed new spending constraints on him this summer, acutely aware that if they ignore FFP they could actually be removed from the Champions League. While Manchester United have already spent £50m this summer, so far City have only signed Gaël Clichy from Arsenal for £7m and the Montenegro defender Stefan Savic for a similar amount.
The governing body have said they will use benchmarking exercises and specialists in the field to determine whether sponsorship and naming-rights deals are above their true market value. If it is deemed that they are, the excess must be deducted from break-even calculations.
