City seal £15m ground deal to stem huge losses
Manchester City will today make a big stride towards their goal of driving down losses to fall within Uefa's financial fair play rules by announcing a stadium naming rights deal with Etihad Airways believed to be worth between £10m and £15m a year.
The sponsorship deal, to be announced at a news conference at Eastlands this morning, will inevitably raise eyebrows: City are owned by Sheikh Mansour bin Zayed al-Nahyan of Abu Dhabi and Etihad Airways is the Gulf state's government-owned airline. Uefa will want to be certain that this is not simply a way of circumventing their new regulations.
It will certainly help City to compete in the Champions League, a competition in which they will make their bow this season. Mansour has spent over £500m since he took over the club in September 2008 and Roberto Mancini, the club's manager, is reportedly keen to add to the squad this summer.
Uefa have warned in the past that they will respond to any attempt to get around their fair play rules. The European governing body's head of club licensing, Andrea Traverso – the man tasked by president Michel Platini with introducing the system – said last year: "Should the clubs put in place specific structures that allow them, in ways we didn't think about, to easily go around some of the principles, we could amend these rules to catch up with these situations. You can call them loopholes but you can call them as well an evolution of the market which could not be taken into consideration at the time the rules were drafted."
Uefa will expect to see City's books to establish the level of naming rights and sponsorship deals and how they are being accounted for. City's accounts for the year ended 31 May 2010 show they lost £121.3m, 31 per cent more than a year earlier.
City's results from last year revealed that revenue from sponsors and partners had grown by 400 percent to £32.4m, because of agreements with Abu Dhabi-based companies. These included the telecommunication company Etisalat, Aabar Investments PJSC, the Abu Dhabi Tourism Authority and Etihad. The club's current Etihad shirt deal, meanwhile, is worth £2.3m.
City's attempts to drive down their losses to Uefa's permissible figure of £40m over the next three seasons is behind the current desperate attempts to offload players bought on hugely inflated wages to help the club progress to the Champions League. Wayne Bridge, Emmanuel Adebayor and Craig Bellamy will not travel with the team to Los Angeles today, on the first leg of the club's pre-season tour of the United States. Offloading them will be difficult if they want wages in line with those paid at City. Bellamy will not contemplate a cut.
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