Manchester City to pay council £2m a year for stadium naming rights
• Deal with city council allowed £350m Etihad deal to take place
• Agreement doubles Manchester city council's stadium income
David Conn
guardian.co.uk, Tuesday 4 October 2011 15.36 BST
Manchester City will pay just £2m a year to their local council in return for control of the naming rights to the Eastlands stadium, which was built for the 2002 Commonwealth Games with £112m of lottery and public money. Agreeing that payment to the council allowed City to conclude their 10-year deal with Abu Dhabi's Etihad Airways, for an estimated £35m a year, which includes naming rights to the stadium, the proposed 80-acre training "campus" alongside it, and City's shirts.
Manchester city council still owns the stadium, on which it spent £22m of council tax payers' money to have the running track removed and convert it for City to occupy as tenants after the Commonwealth Games. City handed their former Maine Road home to the council, and spent £20m installing bars, restaurants and corporate entertaining areas at Eastlands. The terms of the rent were for City to pay the council a proportion of ticket income above Maine Road's 32,000 capacity, which has produced around £2m for the council annually since 2003 – £16m in total.
Under the tenancy agreement, the council retained control of naming rights to the stadium, which remains a publicly owned asset. As City, owned since 2008 by Sheikh Mansour of Abu Dhabi, pondered fulfilling its ambitions, the agreement was renegotiated last year. The council excluded the public from those discussions because, according to the minutes of its executive meeting, they "involved consideration of exempt information relating to the financial or business affairs of particular persons".
Sir Howard Bernstein, the council's chief executive did, though, disclose to the Guardian that the overall rent paid by City will now increase to "circa £4m a year". In return, the council released its control of naming rights. Mansour's club then sealed the estimated £350m, 10-year deal with Etihad.
The campus development, which the council hopes will help regenerate east Manchester neighbourhoods which include some of the country's most stubbornly deprived, is currently being considered for planning permission.
Manchester city council announced in February that government cuts were forcing it to reduce its spending by £170m over the next two years, and as a consequence 2,000 jobs were to go and £22m was being cut from its children's early years budget. New East Manchester, a council regeneration agency, was last month forced to revise down its targets for job growth and recovery, due to the recession.
Against that dire economic backdrop, the £100m-plus campus development, and the extra £2m from the stadium naming rights deal, has been hugely welcomed by Bernstein and the council. "We are very satisfied with the deal, a doubling of the income we were receiving at the stadium," Bernstein said.
"We believe the proposed development will provide a platform for further employment-led regeneration. Importantly, we are getting money back continually from an investment of lottery and public money in sport."
Marc Ramsbottom, leader of the opposition Liberal Democrat group on the Labour-controlled council, said insufficient detail had been disclosed on the deal: "I am not criticising £2m for the stadium naming rights, because we cannot actually assess whether a better deal with Manchester City might have been done. And while investment is very welcome, such developments have often not lived up to the grandiose claims made for their regeneration benefits."
The council's income from the stadium goes into other sports facilities on the site, according to the original agreement with Sport England, which provided £90m in lottery funds to build the stadium. A Sport England spokesman confirmed the newly renegotiated rental arrangements had been independently assessed as fair value by the financial consultants KPMG.
http://www.guardian.co.uk/football/2...-naming-rights
• Deal with city council allowed £350m Etihad deal to take place
• Agreement doubles Manchester city council's stadium income
David Conn
guardian.co.uk, Tuesday 4 October 2011 15.36 BST
Manchester City will pay just £2m a year to their local council in return for control of the naming rights to the Eastlands stadium, which was built for the 2002 Commonwealth Games with £112m of lottery and public money. Agreeing that payment to the council allowed City to conclude their 10-year deal with Abu Dhabi's Etihad Airways, for an estimated £35m a year, which includes naming rights to the stadium, the proposed 80-acre training "campus" alongside it, and City's shirts.
Manchester city council still owns the stadium, on which it spent £22m of council tax payers' money to have the running track removed and convert it for City to occupy as tenants after the Commonwealth Games. City handed their former Maine Road home to the council, and spent £20m installing bars, restaurants and corporate entertaining areas at Eastlands. The terms of the rent were for City to pay the council a proportion of ticket income above Maine Road's 32,000 capacity, which has produced around £2m for the council annually since 2003 – £16m in total.
Under the tenancy agreement, the council retained control of naming rights to the stadium, which remains a publicly owned asset. As City, owned since 2008 by Sheikh Mansour of Abu Dhabi, pondered fulfilling its ambitions, the agreement was renegotiated last year. The council excluded the public from those discussions because, according to the minutes of its executive meeting, they "involved consideration of exempt information relating to the financial or business affairs of particular persons".
Sir Howard Bernstein, the council's chief executive did, though, disclose to the Guardian that the overall rent paid by City will now increase to "circa £4m a year". In return, the council released its control of naming rights. Mansour's club then sealed the estimated £350m, 10-year deal with Etihad.
The campus development, which the council hopes will help regenerate east Manchester neighbourhoods which include some of the country's most stubbornly deprived, is currently being considered for planning permission.
Manchester city council announced in February that government cuts were forcing it to reduce its spending by £170m over the next two years, and as a consequence 2,000 jobs were to go and £22m was being cut from its children's early years budget. New East Manchester, a council regeneration agency, was last month forced to revise down its targets for job growth and recovery, due to the recession.
Against that dire economic backdrop, the £100m-plus campus development, and the extra £2m from the stadium naming rights deal, has been hugely welcomed by Bernstein and the council. "We are very satisfied with the deal, a doubling of the income we were receiving at the stadium," Bernstein said.
"We believe the proposed development will provide a platform for further employment-led regeneration. Importantly, we are getting money back continually from an investment of lottery and public money in sport."
Marc Ramsbottom, leader of the opposition Liberal Democrat group on the Labour-controlled council, said insufficient detail had been disclosed on the deal: "I am not criticising £2m for the stadium naming rights, because we cannot actually assess whether a better deal with Manchester City might have been done. And while investment is very welcome, such developments have often not lived up to the grandiose claims made for their regeneration benefits."
The council's income from the stadium goes into other sports facilities on the site, according to the original agreement with Sport England, which provided £90m in lottery funds to build the stadium. A Sport England spokesman confirmed the newly renegotiated rental arrangements had been independently assessed as fair value by the financial consultants KPMG.
http://www.guardian.co.uk/football/2...-naming-rights
Conflict of interest? Yes.
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