City Sells Stadium Name To Etihad Airways
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Manchester City club owned by Sheikh Mansour bin Zayed Al Nahyan of Abu Dhabi, will sign the richest sponsorship agreement in its history with Etihad Airways, the Gulf state's government-owned airline, according to two people familiar with the transaction.
Etihad, which pays £2.3 million ($3.7 million) a year as the team's shirt sponsor, will get naming rights for the City of Manchester Stadium, said the people, who declined to be identified because the deal hasn't been publicly announced. They declined to reveal the terms of the contract, which will be announced soon. Etihad and City declined to comment.
Mansour has spent almost $1 billion since acquiring City in September 2008. He's bought international players including Carlos Tevez and David Silva in an effort to win trophies and outpace rival cross-town rival Manchester United, which last season won a record 19th English championship. City qualified for the Champions League and won the FA Cup last season, its first major trophy since 1976.
City has been trying to increase its revenue in an effort to meet new criteria on fiscal responsibility established by European soccer's governing body, UEFA. Under those rules, clubs that can't keep costs and income at an acceptable level face being banned from the Champions League, Europe's elite competition.
City's accounts for the year ended May 31, 2010, show it lost £121.3 million, 31 percent more than a year earlier.
Financial Fair Play
"There`s a sense, but UEFA will say it's not the case of course, that financial fair play is aimed at clubs like Manchester City and Chelsea who have wealthy benefactors," said Stefan Szymanski, a professor of sports business at London`sCass Business School.
"If this sponsorship deal were not to be a fair value deal Manchester City would be caught out, but I don't believe that's the case."
UEFA will allow teams to incur losses for infrastructure and youth development. Its General Secretary Gianni Infantino said the Nyon, Switzerland-based organization will monitor sponsorship deals to ensure agreements are based on fair value.
Infantino was responding to concerns that wealthy benefactors could use sponsorship deals to inflate the balance sheets of teams they own. Mansour is a member of the Abu Dhabi royal family.
In last year's results Manchester City said revenue from sponsors and partners grew 400 percent to £32.4 million because of agreements with Abu Dhabi-based companies including telecommunication company Etisalat, Aaabar Investments PJSC, the Abu Dhabi Tourism Authority and Etihad.
City moved to the City of Manchester stadium from its Maine Road ground in 2003. In October it re-negotiated with Manchester City Council to allow it to sell naming rights.
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