Uefa to examine Abu Dhabi ties in City's £400m sponsors deal

 

Manchester City may have to prove that their Abu Dhabi owner is not "influenced" by his half-brother, who chairs Etihad Airways, if their £400m sponsorship deal with the emirate's national airline is to avoid failing one of the key tests of the Uefa Financial Fair Play (FFP) regulations.

Though Liverpool's owner John W Henry, who is clearly deeply unhappy with the transparency of the Etihad deal, backed Arsenal manger Arsène Wenger's criticism of the deal as "financial doping" yesterday, City are comfortable that it represents "fair value" and is not simply a means of the Abu Dhabi royal family, which founded Etihad, artificially inflating the balance sheet of the club owned by Sheikh Mansour bin Zayed al-Nahyan and enabling it to meet the FFP rules.

However, detailed analysis of Uefa's 91-page Licensing and Fair Play regulations by The Independent reveals that the family relationships between City and its sponsor may fall foul of Uefa's "related party" test. Uefa will consider that club and sponsor are related parties if a family relationship exists. The rules stipulate that a club will fail the "related party" test if money comes in from a "close member" of the club owner's family who "has significant influence over the [club]".

It will be for City to demonstrate that several members of Sheikh Mansour's family who have been integral to Etihad do not exert that influence over him. They are the sheikh's elder half-brother, the Abu Dhabi ruler and UAE president Sheikh Khalifa bin Zayed al-Nahyan, who founded the airline, Etihad chairman, Sheikh Hamed bin Zayed al-Nahyan, and vice-chairman Sheikh Kaled, both half-brothers.

Uefa will come under intense pressure to submit the £40m-a-year Etihad deal, the largest in world sport, to rigorous scrutiny when FFP comes into force, for the 2013-14 season, with some Premier League owners readying themselves to press the organisation to disallow any income from related parties.

Liverpool's owner, Henry, first hinted at his displeasure with the Etihad deal at the weekend when he tweeted: "How much was the losing bid?" The inference was that City had not sought any other potential sponsors because they wanted only an inflated deal from Etihad. After Wenger joined the debate on Tuesday, accusing City of disrespecting FFP rules by not adhering to the market price in their Etihad deal, Henry commented again yesterday: "A club's best player has to be worth at least 10 per cent of your naming rights," he said. "Mr Wenger says boldly what everyone thinks."

There is scepticism in some rival Premier League boardrooms about the fact that Etihad, who have yet to make a profit in their seven-year history and have a similar-sized fleet of planes as Flybe, are paying such a colossal sum. But one of the leading lawyers in the FFP field, Daniel Geey of Field Fisher Waterhouse, said that even if the deal fell foul of related party rules, it could still be deemed acceptable if Uefa considered it to represent fair value. "The first hurdle is whether the Etihad deal can be deemed a related party transaction. Only if it is will an economic judgment have to be taken to assess whether it is fair value," Mr Geey said.

Etihad's financial performance certainly has no relevance to the size of the deal and City do appear to have a strong "fair value" case, based on the fact that they have broken new ground in the way the deal is constructed. They are also planning a vast redevelopment project on land adjacent to their stadium which accrues new sponsorship opportunities for what will become the "Etihad Campus".

City have not disclosed the breakdown of their 10-year deal but they could argue that £20m is fair value for a shirt deal, given that Standard Chartered deliver that sum to Liverpool and that, globally, City are currently a more viewed club than Liverpool in terms of live games screened. If £20m is City's shirt figure, that leaves £15m between the stadium and the campus – the deal is £35m a year in its initial stages, rising to £40m. Wenger's decision to intervene raises the question of how good a piece of business the north London club's own deal with Emirates was, in 2004. They now find themselves locked into a 15-year, £90m contract, for shirt and stadium, until 2019.

As The Independent revealed last month, midfielder Patrick Vieira has decided to retire from the game and is expected to be revealed as a coach and club ambassador at City today.

Vieira had discussions with Arsenal about a role at the Emirates but the club did not propose anything concrete. Despite his having played nine years at Arsenal and 18 months at City, manager Roberto Mancini gets his services. The 35-year-old is expected in Los Angeles with the City pre-season tour, where he will explain his decision next week.

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
SPONSORED FEATURES
Independent Dating
and  

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

Day In a Page

Giants Club: After wholesale butchery of Idi Amin's regime, Uganda’s giants flourish once again

Uganda's giants are flourishing once again

After the wholesale butchery of Idi Amin's regime, elephant populations are finally recovering
The London: After 350 years, the riddle of Britain's exploding fleet is finally solved

After 350 years, the riddle of Britain's exploding fleet is finally solved

Archaeologists will recover a crucial item from the wreck of the London which could help shed more light on what happened in the vessel's final seconds
Airbus has patented a jet that could fly from London to New York in one hour

Airbus has patented a jet that could fly from London to New York in one hour

The invention involves turbojets and ramjets - a type of jet engine - and a rocket motor
Tate Sensorium: New exhibition at Tate Britain invites art lovers to taste, smell and hear art

Tate Sensorium

New exhibition at Tate Britain invites art lovers to taste, smell and hear art
10 best sun creams for kids

10 best sun creams for kids

Protect delicate and sensitive skin with products specially formulated for little ones
Ashes 2015: Nice guy Steven Finn is making up for lost time – and quickly

Nice guy Finn is making up for lost time – and quickly

He was man-of-the-match in the third Test following his recall to the England side
Ashes 2015: Remember Ashton Agar? The No 11 that nearly toppled England

Remember Ashton Agar?

The No 11 that nearly toppled England
Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks