City seal sponsorship deal worth £400m with Etihad

Ambitious plans for vast Manchester sports campus will help meet Uefa's financial fair play rules

Manchester City have sealed one of world's most ambitious sports sponsorship deals, which is structured in a way which gives them a substantial chance of complying with Uefa's new financial fair play (FFP) rules and avoiding future expulsion from European competition.

City's extension of its sponsorship deal with Etihad Airways is worth up to £400m to the club over 10 years and saw the City of Manchester Stadium become the Etihad Stadium, as of yesterday. But the most significant part of the deal is City's proposed purchase of a vast area of east Manchester from the cash-strapped local city council, which enables the club to create a potentially huge area of facilities, all of which can accrue sponsorship revenues. City hope that the area, currently wasteland, will form part of the new "Etihad Campus" to include the club's relocated training ground, youth set-up, a sports science facility and an Etihad call centre, as well as the City Square retail space already created. This area can "grow and grow," City chief executive Garry Cook said yesterday.

The costs of infrastructure projects – including the £20m over five years which the local council are being paid for the land – are not counted when Uefa analyses a club's incomings and outgoings to ensure its losses do not exceed those stipulated by the FFP regime – so the new campus creates an abundance of sponsorship opportunities but effectively no cost to create them. It can enable the club to drag itself away from latest losses of £121m, run up during the breakneck pursuit of a Champions League place, and towards the break-even figure Uefa demands.

Cook yesterday declined to detail the breakdown of the deal, though by allowing sponsorship of the club's shirt, stadium and the campus facilities – if planning permission is secured – they have surpassed the $300m (£186m) that JP Morgan Chase has reputedly agreed to pay over 10 years to have its name on the new Madison Square Garden, which is due to open in 2013 and Citigroup's deal with the New York Mets of about $400m (£248m) over 20 years.

Uefa's head of club licensing, Andrea Traverso – the man tasked with introducing the FFP system by president Michel Platini – has pledged that he will rigorously seek out any attempts by wealthy benefactors to use sponsorship deals to inflate the balance sheets of teams they own. But though City's £40m-a-year deal dwarfs that struck by other Premier League clubs – Tottenham and Chelsea have so far failed to secure £10-15m deals; Arsenal's shirt and stadium deal with Emirates was £100m over 15 years – the Etihad Campus element will allow City to argue strongly that their deal is about far more than the club's shirt and stadium and that owner Sheikh Mansour bin Zayed bin Sultan al-Nahyan is not using Etihad as a device for investing in City.

Etihad is government-owned – in other words, owned by the Abu Dhabi royal family, but chief executive John Hogan said yesterday that the seven-year-old carrier which has been voted airline of the year for the past two years, is an independent business. "If this deal didn't add up, I would not be doing it," he said. "We are a stand-alone business owned by the Emiracy but we are responsible for out own activities." City chief executive Garry Cook said: "We have had several meetings with Uefa. They are very supportive of our plans."

Uefa's Club Financial Control Panel, under the chairmanship of former Belgian prime minister Jean-Luc Dehaene, will examine all sponsorship deals to ensure they fall within market rates. But it may be difficult for Uefa to follow the cash trail on Etihad's sponsorship deal. Bloomberg established last night that Etihad's annual accounts do not detail sponsorship spend. That means it is unclear whether the £40m going to City will be accounted for.

The perimeter advertising at City's stadium is already dominated by Abu Dhabi companies, with the telecommunication company Etisalat, Aaabar Investments PJSC, the Abu Dhabi Tourism Authority key contributors to a 400 per cent rise in revenues from sponsors and partners, to £32.4m last year. Cook said it was "clearly evident" that there was a strong Abu Dhabi bias. "If other partners from outside the Abu Dhabi want to join us we will consider that, but like all propositions they have to be the right proposition," he said.

Mr Traverso was unavailable to discuss City, though a Uefa spokesman said the organisation was "aware of the situation and our experts will make assessments of fair value of any sponsorship deals using benchmarks."

Have you tried new the Independent Digital Edition apps?
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

No grace of God for Katy Perry as sisters act to stop her buying convent

Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
10 best sun creams for body

10 best sun creams for body

Make sure you’re protected from head to toe in the heatwave
Wimbledon 2015: Nick Bollettieri - Milos Raonic has ability to get to the top but he must learn to handle pressure in big games

Nick Bollettieri's Wimbledon files

Milos Raonic has ability to get to the top but he must learn to handle pressure in big games
Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

There is more than a shiny trophy to be won by England’s World Cup women

The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with cynicism and greed
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map