Uefa boss to scrutinise Manchester City's Etihad deal Page last updated at 10:35 GMT, Tuesday, 16 August 2011 11:35 UK E-mail this to a friendPrintable version By Matt Slater Sports news reporter The Etihad deal is "unique and long-term investment", say City Manchester City's sponsorship deal with Etihad Airways will be analysed by Uefa's financial fair play (FFP) boss. In a 10-year deal reportedly worth £400m, Etihad now sponsors both the club's shirt and the stadium. But with City and Etihad sharing Abu Dhabi links, critics have claimed this is an attempt to circumvent European football's strict new financial rules. City declined to reply, although the club have previously said speculation over the figures was "not accurate". Continue reading the main story It is not enough to say 'we've got a sponsorship contract and that's OK' if the contract is out of line Jean-Luc Dehaene Uefa Club Financial Control Panel "I have some questions, yes," said Jean-Luc Dehaene, the chairman of Uefa's Club Financial Control Panel. "But it would be dangerous for our authority if we take judgements without facts." The 71-year-old former Prime Minister of Belgium confirmed his panel would "benchmark" all deals to make sure they were "fair value". "If we see clubs that are looking for loopholes we will act," he said. "It is not enough to say 'we've got a sponsorship contract and that's OK' if the contract is out of line." As well as the shirt and stadium, Etihad also sponsors The Etihad Campus which is being developed around the ground. This will create an expanded academy, sports science centre and training ground, as well as office and retail space and a 7,000-seat stadium for youth games. All of this investment is exempt from the FFP rules as it is not deemed football-related. Any income accrued, however, does count. FIFA FAIR PLAY AT A GLANCEContinue reading the main story â¢Clubs hoping to take part in the Champions or Europa Leagues must balance their football-related expenditure over a three-year period â¢This is the first season that counts towards the 2013/14 assessment but clubs will be allowed to make a loss of 45m euros (£39.4m) over the three years, falling to 30m euros from 2015/16. â¢It is not until 2018 that clubs have to bring their annual losses below £8.8m. â¢The ultimate sanction for any club that fails to comply with the FFP criteria is a ban from European competition. In an exclusive interview with BBC Sport on Monday, City's chief executive Gary Cook said the deal was "unique". "The Ethihad Campus, which constitutes some 210 acres is unique in its breadth, depth and length of term," he said. "It involves the tradition, which is shirt sponsorship, the naming rights of the stadium, but what we haven't seen in football is a campus, creating a place to be, to work. "We've got a great relationship with Ethihad. It's a long-term programme and they are equally very excited by it." Cook added that City's recent spending was "not sustainable" but was needed to quickly attain Champions League football. Manchester City have been the focus of intense scrutiny ever since an Abu Dhabi-based consortium led by Sheikh Mansour bin Zayed Al Nahyan bought the club in 2008. The club made a loss of £93m in 2008-09, £121m in 2009-10 and last year's figures, due in September, are expected to be even worse, despite an increase in turnover partly due to a number of lucrative sponsorship deals with other Abu Dhabi-based companies. Etihad Airways, for example, is owned by the Abu Dhabi government. The oil-rich state's ruler, Sheikh Khalifa bin Zayed Al Nahyan, is Sheikh Mansour's half-brother. http://news.bbc.co.uk/sport1/hi/football/14490740.stm
Clubs were always going to find loop-holes. If you look hard enough there is cracks in the system. They could have done something else like issue a preference share-holding for x amount of money and fund their losses, this is completely legal. The preference share-holding is easy to do as it doesn't carry voting rights and is popular amongst companies. Its a simple rights issue and a quick way to bring in liquid capital.
whats out of line though, ive heard its not market value bandied about but whos to say what the market value is surely that is determined by what the two parties feel is best as is negotiated in all deals?
FSG are a prime example of a company using a preferance sharing scheme. NYT recently sold most of their "Class B" shares (which held no voting rights) for over $100m. the investors didn't need to be named and the amount each share was sold for didn't need to either. incidently NYT no longer own over 10% of shares in FSG, the owner person that does is John W. Henry Agreed! It's like the FA trying to determine what counts as a weak squad. surely it's about supply and demand. If Chelsea were to approach us and say "how much would you pay for Frank Lampard" we'd say "well we have loads of young central midfielders, we dont really need him... £5m?". If chelsea were to ask Man Utd the same question they may look at what they have and say £10m are utd paying over the odds? are liverpool low balling? the answer is no to both... because the answer is subjective
Bozz. Correct. However you have to look at the figures being mentioned, the reason Citys deal is being scrutinised is the figures being quoted. £400 million for naming rights for a stadium. Real Madrid who are a global powerhouse from a marketing point of view can't command figures like that. Now there has to be some realism. Man City are light-years commercially behind Real Madrid. Although there will be loop-holes that clubs can excercise, they have to be realistic. Anything that looks unrealistic has to be cut off and this certainly is.
KingPepeReina its more than just a stadium KPR its the whole etihad complex around the stadium that it goes with they are basically the sponsors of everything city, even have a plane painted in their honour now, however i find it strange that city can sell the naming right to the stadium when they only rent it from the council that for me is a strange decison, but in terms of what amouts are agreed it up to the two parties like in any kind of transaction.
Arabian Expat. Well done You've found exactly what UEFA can nail City to the floor with. Isn't there some sort of rule that a club cannot sell naming rights to anything that isn't a fixed asset? Citys stadium is not one of their fixed assets,as they don't own it. They are renting it.
KingPepeReina i think but im not sure as thats why i raised it they can agree with the council to do that they must surely profit from it in some sense otherwise it wouldnt have gone thru, its like me renting a house from the council and instead of having number 25 naming its woodison lol i think thats allowed but in all honesty i aint got a jar of glue on the subject but did seem a bit strange but as said im sure the council have allowed this but who knows.
I thought 'market value' in this sense was in part down to competing bidders? I can't remember where I heard/read it, but if say other companies were offering £100m for the same deal, and this Etihad (who are linked to the owners) suddenly offer £400m, it looks a bit strange. Presumably there were competing parties. If the above isn't the case, maybe the market value is determined by the cost of similar deals (other stadium naming rights, such as the Emirates) or perhaps by the potential returns of such a deal, because a company wouldn't pay £400m for something that they didn't expect to make that back from. Either way, I saw something like this coming a mile off. I'm just surprised it's happened already. It's basically another investor in disguise, and isn't even subtle.
The council may,as they may accept more back-handers than Howard Webb. However will UEFA allow this happen, because if they do,the whole FFP will be a farce and cannot be implemented fully. They only have one option to ensure that this is run correctly and that is stick the boot into City.
KingPepeReina i think thats it tho the ffp is a farce lol, but it also ensures the top clubs are cemeted at the top in my view, the biggest clubs earn the most money the most money stays at the top, it actively prevents teams emerging and becoming a force because they have a small fanbase which can only be bad for the game. just throwing that out their ha
I think UEFA will act on this, not because Man City are flouting the rules, not because of the shaky naming deal but because Man City are English. UEFA love dishing out punishments to english clubs (and i'm not talking about the european ban following Heysel when I say this)
Correct ExPat FFPR are about the big boys being protected from wannabes joining the party, maintaining the status quo, the Rich get more money, can therefore spend more money, and the poor can't keep up. Can anyone really see UEFA kicking out Citeh? With the money they have? No chance. I fully expect UEFA to investigate this Etihad Campus Deal, and declare it The Model all Clubs should aspire to, some time soon
Even if we move away from Manchester and look at that russian side who are currently looking to buy big players... if they are backed by a billionaire - will uefa expel them and their billions from europe?
Schofield. Well that will mean that the entire thing will be a farce. It will mean in other words ''The rules are in place, however if clubs want to survive, they must find loop-holes''. This defeats the purpose. However, if UEFA want to implement the FFP they must nail City to the floor and set an example so that all clubs all over Europe toe the line and follow the rules to the last word.
I don't think it was ever stated that FFP was to level the playing field for all clubs. And why should it? It's like saying Asda and Tescos have to be in corner shops to allow corner shops to compete. The rules don't start until next year and are phased over three years - wages don't count for two, which is City's real problem - so I'm not sure what this will achieve right now. Anything Uefa does is currently dubious in motive to me.
If the likes of Barca and Real Madrid pull there faces, UAFA will nail City, if not City will continue as they are.
Barca and Real Madrid haven't got a hope in hell of meeting the criteria without 'Loopholling' Let's just say UEFA kick out one of those, what would the Sponsors and TV Companies(who fund UEFA) have to say about that? Well, whatever loop holes are found by one, will be used by others. You go to prison for a very long time for Tax Evasion, Tax Avoidance on the other hand.................
plus by 2014 clubs in europe dont have to obey ti uefa anyway lol so it could all be pointless debate anyway.
plus by 2014 clubs in europe dont have to obey ti uefa anyway lol so it could all be pointless debate anyway.
