Man City to test Fair play rules

[Exiled_red]

i think the question may be "would city really get that much money from a deal that didnt involve their owners"

Presumably UEFA should be able to see proposals from other parties and what they offered. If this is a genuine naming rights deal you would imagine that the have approached other potential sponsors, if this deal pays significantly more than anyone else was willing to offer then (or they haven't approached anyone else) things might look a little dodgy, and UEFA need to investigate.

[Chrono]

I think some people are determined that the rules won't work and are willing to fit what happens to that narrative. I'm not sure we will be able to tell how well the initiative has worked for at least four or five seasons but I fully expect every big transfer to be seen as a shocking affront to the idea by some.

I'll admit to being skeptical about the FFP myself but the naming rights doesn't seem anything too ridiculous given their growing status.

[Arn]

I doubt that UEFA can do something as long as it isn't miles more than the best stadium naming right sponsorship out there.

[IJM]

The FFP talks about such deals having to be in line with the current market values. But I think a degree of latitude will be allowed. Deals that push the upper boundaries will probably be allowed. But any attempt at outlandish deals will probably fall foul of the FFP rules.

If the average market value of a hypothetical sponsorship deal was, say £10m a year, then deals of £15m a year will probably be okay. But deals of stupidly high values of three times the market value or above would attract UEFA's attention.

There is a definite grey area that UEFA will have to investigate. It also depends who the deals come from. Deals with companies that have ties to the owners will come under more scrutiny than those that are clearly independent.

It's going to get interesting when UEFA start having to have hearings setting precedents. Then we'll find out for sure if they have the balls to enforce FFP and if there is any favouritisms.

[Nick77]

Does the stadium actually belong to them or like the name suggests the City of Manchester??

[Arn]

UEFA have already done something very clever to protect themselves.

If you look at the rules then it is the FA that hand out the punishment and not UEFA.

Do anyone really think that the English FA for example will have the balls to give a club like City for example anything else than a fine?

Very clever by UEFA. If the punishment isn't big enough then they won't be blamed.

[Exiled_red]

Does the stadium actually belong to them or like the name suggests the City of Manchester??

It's is owned by the Council, City pay rent and a percentage the increased revenue from the increased capacity compared to Maine Road, or so I read a few months ago, they were also trying to buy the stadium from the council but as far as I'm aware they haven't done so yet.

[dww]

From Raphael Honigstein on Twitter:

my understanding of FFP would suggest Etihad deal is within the rules.

[Nick77]

It's is owned by the Council, City pay rent and a percentage the increased revenue from the increased capacity compared to Maine Road, or so I read a few months ago, they were also trying to buy the stadium from the council but as far as I'm aware they haven't done so yet.

So then how can they sell the naming rights for an asset they don't own??

[Exiled_red]

So then how can they sell the naming rights for an asset they don't own??

I don't know, I guess it depends on the terms of the contract surely they would have to have looked at it before doing any deal.

Maybe it will only be sponsored when they are playing there, maybe when they use it for gigs or Council stuff it will just be Eastlands/City of Manchester Stadium

[Arn]

£40m a year

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."

Clicky

[Baracus]

"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.

[/URL]

Bollocks to that

[Exiled_red]

I'm confused as to what else other than the ground and shirt is being sponsored. Why would someone sponsor a training ground Also is I thought that non-football related incomes were discounted from the Financial Fair Play rules which some of that on the Etihad Campus surely comes under.

The figures just seem so unrealistic £40m a year seems over the top. UEFA need to investigate this, as it looks dodgy to me!

[spanky]

so man city can keep on spending crazy transfer fees and just get in some "outside sponsors" to keep uefa happy.

i wonder how long it will be till chelsea get some "outside sponsors" from russia to pump in money

[wavydavy]

I'm confused as to what else other than the ground and shirt is being sponsored. Why would someone sponsor a training ground Also is I thought that non-football related incomes were discounted from the Financial Fair Play rules which some of that on the Etihad Campus surely comes under.

The figures just seem so unrealistic £40m a year seems over the top. UEFA need to investigate this, as it looks dodgy to me!

There is no way this will get past UEFA. They'll have no problem excluding City from the CL. This deal stinks to high heaven and will inevitable draw complaint's by the big boys compliant with the FFP rules. How on earth can a club like City fairly aquire £400m naming rights to their stadium. It's a ****ing joke.