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."

News
Jeremy Paxman has admitted he is a 'one-nation Tory' and complained that Newsnight is made by idealistic '13-year-olds' who foolishly think they can 'change the world'.
peopleThe idea has been greeted enthusiastically by the party's MPs
News
Michael Buerk in the I'm A Celebrity jungle 2014
people
Voices
File: David Cameron offers a toast during a State Dinner in his honour March 14, 2012
voicesAnd nobody from Ukip said babies born to migrants should be classed as migrants, says Nigel Farage
Arts and Entertainment
Avatar grossed $2.8bn at the box office after its release in 2009
filmJames Cameron is excited
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Stik on the crane as he completed the mural
art
News
Happy in his hat: Pharrell Williams
people
Arts and Entertainment
Stella Gibson is getting closer to catching her killer
tvReview: It's gripping edge-of-the-seat drama, so a curveball can be forgiven at such a late stage
News
Brazilian football legend Pele pictured in 2011
peopleFans had feared the worst when it was announced the Brazil legand was in a 'special care' unit
News
i100(More than you think)
Sport
Brendan Rodgers seems more stressed than ever before as Liverpool manager
FOOTBALLI like Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
News
The Magna Carta
archaeologyContemporary account of historic signing discovered
News
Phyllis Dorothy James on stage during a reading of her book 'Death Comes to Pemberley' last year
peopleJohn Walsh pays tribute to PD James, who died today
Sport
Benjamin Stambouli celebrates his goal for Tottenham last night
FOOTBALL
Life and Style
Dishing it out: the head chef in ‘Ratatouille’
food + drinkShould UK restaurants follow suit?
News
peopleExclusive: Maryum and Hana Ali share their stories of the family man behind the boxing gloves
Caption competition
Caption competition
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

Bleacher Report

Daily Quiz
Independent Dating
and  

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

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

Paul Scholes column

I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

Lewis Moody: Lancaster has made all the right calls – now England must deliver

So what must the red-rose do differently? They have to take the points on offer 
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game