Etihad deal will pass, City insists

Manchester: Manchester City chief executive Garry Cook has insisted that the club will maintain a "very open dialogue" with Uefa over their attempts to comply with incoming Financial Fair Play regulations after announcing a ground-breaking £400 million (Dh2.4 billion) naming rights deal with Etihad Airways.

The agreement, which is due to run until 2021 and will see Eastlands renamed the Etihad Stadium, is the largest single agreement struck by a football club and could result in up to £40 million a year being ploughed into City's finances by the Abu Dhabi -headquartered airline.

With the agreement further strengthening City's portfolio of Abu Dhabi-based commercial partners — the club have five sponsorship agreements with Abu Dhabi companies — the market value of the naming-rights deal will be scrutinised closely by Uefa.

A Uefa spokesman said: "We are aware of the situation and our experts will make assessments of fair value of any sponsorship deals using benchmarks."

The substantial investment from Etihad covers more than the stadium, however, a reality that has left the club relaxed about the prospect of meeting the FFP strictures.

Upgrade and investment

Incorporated into the naming-rights deal is an upgrade of the current shirt sponsorship agreement worth just £3.2 million a year when struck in 2009 — and a substantial investment into the area surrounding the stadium, which includes Sportcity, retail outlets, car parks and a proposed new academy and sports science facility.

That area will come under the umbrella of the Etihad Campus and, with infrastructure development exempt from FFP regulations, the wide-ranging make-up of the deal leaves Uefa no obvious benchmark to measure against. City will be expected to deliver a clear breakdown of the deal to Uefa, but Cook insists that discussions have already taken place and will continue to do so.

He said: "We already have a very open dialogue with Uefa and have had several meetings. They are very supportive of our plans."

"All clubs have to comply to meet regulations and we are no different, but we are looking to grow, on and off the pitch. The backdrop, of course, is Uefa's Financial Fair Play and this [deal] helps to continue to make significant progress in that area."

Rental agreement

With City continuing to rent the stadium from Manchester city council, Sir Richard Leese, the council leader, revealed that a new rental agreement will see the council receive £20 million over the next five years.

Having posted losses of £121 million in financial results for the year ending May 2010, City are faced with a stern challenge if they are to meet Uefa's FFP criteria, which precludes total losses in excess of €45 million (Dh235 million) over the three seasons of the first monitoring period, which begins in the 2011-12 campaign.

But while the financial fillip of the Etihad deal will go a long way towards helping City break even, comparisons with individual deals struck by major clubs suggests that the naming rights deal is not likely to fall into the category of artificially inflated rates.

Barcelona secured a five-year shirt deal worth £125 million with the Qatar Foundation this year, while Manchester United are expected to replace their £302.9 million kit deal with Nike — struck in 2002 — with a deal in excess of £500 million in the next year.

In contrast, City have reached their impressive figure by packaging the stadium name together with shirt space and surrounding real estate.

Pre-season

Meanwhile, City's first-team squad flew to Los Angeles for pre-season preparations yesterday with several out-of-favour players left at home.

Shay Given, who is the subject of interest from Aston Villa, stayed put, along with Craig Bellamy, Emmanuel Adebayor, Wayne Bridge and Jo, who is a loan target for CSKA Moscow.