Unfair Fair Play At The Stadium Formerly Known As Eastlands

The reported announcement of a £400 million stadium naming rights deal between Manchester City and Eithad Airways has sparked scrutiny and criticism from the likes of Arsene Wenger and John W Henry however are these powerful football figures right to criticise the methods of Manchester City as they attempt to abide by the UEFA fair play regulations?

The subject of criticism here is not the startling amount of money offered by the Abu Dhabi Government owned commercial airline but the family ties between Sheikh Mansour, the owner of City, and his half brother who owns Etihad. Both men are members of the Abu Dhabi royal family. In selling the naming rights of Eastlands for such a fee, in a deal that will last for ten years, the accounts at City will certainly gain somewhat of a boosting in a bid to abide with the Financial Fair Play rules adopted by UEFA recently. If the club were to fail in abiding with the specific financial structure detailed within the regulations then they could be ousted from Champions League Football next season.

It is obviously not against these new rules to receive audacious bids for naming rights of a club’s stadium. City already receive £2.3 million a year from Eithad in return for the sponsorship rights of the club’s shirts. Thus continuing this tradition and branding the stadium as Etihad would seem a continuation of an already strong business relationship between club and company.

This would seem to make perfect sense for the airline, especially with City qualifying for The Champions League next season and in doing so opening much greater marketing opportunities for exposure within Europe. However, surprisingly, Etihad can’t really afford it. Since their operations began in 2004 they have never posted a profit. Last year, with the global economic crisis, swine flu and the volcanic ash cloud, the company didn’t even break even. It is quite confusing then that such a company can afford to shell out a prospective £13 million per year in sponsorship, which could rise to £18 million depending on City’s success at home and abroad.

This is considered to be a hugely inflated price by many including Wenger. He stated that, “If the financial fair play is to have a chance, the sponsorship has to be at the market price. It cannot be doubled, tripled or quadrupled.”

This point raises suspicions about the motive behind the deal. The owner of Etihad is none other than Sheikh Mansour’s half brother and if the company can’t logically afford the deal, then the money must be coming straight out of his pocket and helping to artificially inflate the balance sheet at Eastlands. This would seem much more like a helping hand from the family member than an act of business strategy and initiative or ‘fair value,’ as the deal has been described in a statement released by Manchester City.

The relationship between the two owners is key to whether or not the deal passes UEFA scrutiny. Within their ninety one page document outlining the regulations, the integral section relating to City’s case is that of the ‘related party’ test. If money comes into the club from a ‘close member’ of the owners family that ‘has significant influence [on the club’s finances]’ then the case may fail the test.

As Wenger stated last week, “The difficulty and the credibility of the financial fair play is at stake.”

This statement reads true as Michel Platini faces a huge week at UEFA. If he decides that the deal is ‘fair value’ for both club and company, and that their isn’t significant influence from the Abu Dhabi royalty, then he will face strong criticism from many rival clubs who are already working hard to abide by the new rules. It could be argued many teams make significant sacrifice in order to stay financially stable in the current game and so allowing what may be considered cheating to occur would make a mockery of not only the regulations themselves but UEFA as a body.

@kingjones17

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