Etihad 400 million
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From the Indy
Some interesting buts on how JH is getting involved and the bit about conflict of interest when family are involved....
Manchester City may have to prove that their Abu Dhabi owner is not "influenced" by his half-brother, who chairs Etihad Airways, if their £400m sponsorship deal with the emirate's national airline is to avoid failing one of the key tests of the Uefa Financial Fair Play (FFP) regulations.
Though Liverpool's owner John W Henry, who is clearly deeply unhappy with the transparency of the Etihad deal, backed Arsenal manger Arsène Wenger's criticism of the deal as "financial doping" yesterday, City are comfortable that it represents "fair value" and is not simply a means of the Abu Dhabi royal family, which founded Etihad, artificially inflating the balance sheet of the club owned by Sheikh Mansour bin Zayed al-Nahyan and enabling it to meet the FFP rules.
However, detailed analysis of Uefa's 91-page Licensing and Fair Play regulations by The Independent reveals that the family relationships between City and its sponsor may fall foul of Uefa's "related party" test. Uefa will consider that club and sponsor are related parties if a family relationship exists. The rules stipulate that a club will fail the "related party" test if money comes in from a "close member" of the club owner's family who "has significant influence over the [club]".
It will be for City to demonstrate that several members of Sheikh Mansour's family who have been integral to Etihad do not exert that influence over him. They are the sheikh's elder half-brother, the Abu Dhabi ruler and UAE president Sheikh Khalifa bin Zayed al-Nahyan, who founded the airline, Etihad chairman, Sheikh Hamed bin Zayed al-Nahyan, and vice-chairman Sheikh Kaled, both half-brothers.
Uefa will come under intense pressure to submit the £40m-a-year Etihad deal, the largest in world sport, to rigorous scrutiny when FFP comes into force, for the 2013-14 season, with some Premier League owners readying themselves to press the organisation to disallow any income from related parties.
Liverpool's owner, Henry, first hinted at his displeasure with the Etihad deal at the weekend when he tweeted: "How much was the losing bid?" The inference was that City had not sought any other potential sponsors because they wanted only an inflated deal from Etihad. After Wenger joined the debate on Tuesday, accusing City of disrespecting FFP rules by not adhering to the market price in their Etihad deal, Henry commented again yesterday: "A club's best player has to be worth at least 10 per cent of your naming rights," he said. "Mr Wenger says boldly what everyone thinks."
There is scepticism in some rival Premier League boardrooms about the fact that Etihad, who have yet to make a profit in their seven-year history and have a similar-sized fleet of planes as Flybe, are paying such a colossal sum. But one of the leading lawyers in the FFP field, Daniel Geey of Field Fisher Waterhouse, said that even if the deal fell foul of related party rules, it could still be deemed acceptable if Uefa considered it to represent fair value. "The first hurdle is whether the Etihad deal can be deemed a related party transaction. Only if it is will an economic judgment have to be taken to assess whether it is fair value," Mr Geey said.
Etihad's financial performance certainly has no relevance to the size of the deal and City do appear to have a strong "fair value" case, based on the fact that they have broken new ground in the way the deal is constructed. They are also planning a vast redevelopment project on land adjacent to their stadium which accrues new sponsorship opportunities for what will become the "Etihad Campus".
City have not disclosed the breakdown of their 10-year deal but they could argue that £20m is fair value for a shirt deal, given that Standard Chartered deliver that sum to Liverpool and that, globally, City are currently a more viewed club than Liverpool in terms of live games screened. If £20m is City's shirt figure, that leaves £15m between the stadium and the campus – the deal is £35m a year in its initial stages, rising to £40m. Wenger's decision to intervene raises the question of how good a piece of business the north London club's own deal with Emirates was, in 2004. They now find themselves locked into a 15-year, £90m contract, for shirt and stadium, until 2019.
As The Independent revealed last month, midfielder Patrick Vieira has decided to retire from the game and is expected to be revealed as a coach and club ambassador at City today.
Vieira had discussions with Arsenal about a role at the Emirates but the club did not propose anything concrete. Despite his having played nine years at Arsenal and 18 months at City, manager Roberto Mancini gets his services. The 35-year-old is expected in Los Angeles with the City pre-season tour, where he will explain his decision next week.
Some interesting buts on how JH is getting involved and the bit about conflict of interest when family are involved....
Manchester City may have to prove that their Abu Dhabi owner is not "influenced" by his half-brother, who chairs Etihad Airways, if their £400m sponsorship deal with the emirate's national airline is to avoid failing one of the key tests of the Uefa Financial Fair Play (FFP) regulations.
Though Liverpool's owner John W Henry, who is clearly deeply unhappy with the transparency of the Etihad deal, backed Arsenal manger Arsène Wenger's criticism of the deal as "financial doping" yesterday, City are comfortable that it represents "fair value" and is not simply a means of the Abu Dhabi royal family, which founded Etihad, artificially inflating the balance sheet of the club owned by Sheikh Mansour bin Zayed al-Nahyan and enabling it to meet the FFP rules.
However, detailed analysis of Uefa's 91-page Licensing and Fair Play regulations by The Independent reveals that the family relationships between City and its sponsor may fall foul of Uefa's "related party" test. Uefa will consider that club and sponsor are related parties if a family relationship exists. The rules stipulate that a club will fail the "related party" test if money comes in from a "close member" of the club owner's family who "has significant influence over the [club]".
It will be for City to demonstrate that several members of Sheikh Mansour's family who have been integral to Etihad do not exert that influence over him. They are the sheikh's elder half-brother, the Abu Dhabi ruler and UAE president Sheikh Khalifa bin Zayed al-Nahyan, who founded the airline, Etihad chairman, Sheikh Hamed bin Zayed al-Nahyan, and vice-chairman Sheikh Kaled, both half-brothers.
Uefa will come under intense pressure to submit the £40m-a-year Etihad deal, the largest in world sport, to rigorous scrutiny when FFP comes into force, for the 2013-14 season, with some Premier League owners readying themselves to press the organisation to disallow any income from related parties.
Liverpool's owner, Henry, first hinted at his displeasure with the Etihad deal at the weekend when he tweeted: "How much was the losing bid?" The inference was that City had not sought any other potential sponsors because they wanted only an inflated deal from Etihad. After Wenger joined the debate on Tuesday, accusing City of disrespecting FFP rules by not adhering to the market price in their Etihad deal, Henry commented again yesterday: "A club's best player has to be worth at least 10 per cent of your naming rights," he said. "Mr Wenger says boldly what everyone thinks."
There is scepticism in some rival Premier League boardrooms about the fact that Etihad, who have yet to make a profit in their seven-year history and have a similar-sized fleet of planes as Flybe, are paying such a colossal sum. But one of the leading lawyers in the FFP field, Daniel Geey of Field Fisher Waterhouse, said that even if the deal fell foul of related party rules, it could still be deemed acceptable if Uefa considered it to represent fair value. "The first hurdle is whether the Etihad deal can be deemed a related party transaction. Only if it is will an economic judgment have to be taken to assess whether it is fair value," Mr Geey said.
Etihad's financial performance certainly has no relevance to the size of the deal and City do appear to have a strong "fair value" case, based on the fact that they have broken new ground in the way the deal is constructed. They are also planning a vast redevelopment project on land adjacent to their stadium which accrues new sponsorship opportunities for what will become the "Etihad Campus".
City have not disclosed the breakdown of their 10-year deal but they could argue that £20m is fair value for a shirt deal, given that Standard Chartered deliver that sum to Liverpool and that, globally, City are currently a more viewed club than Liverpool in terms of live games screened. If £20m is City's shirt figure, that leaves £15m between the stadium and the campus – the deal is £35m a year in its initial stages, rising to £40m. Wenger's decision to intervene raises the question of how good a piece of business the north London club's own deal with Emirates was, in 2004. They now find themselves locked into a 15-year, £90m contract, for shirt and stadium, until 2019.
As The Independent revealed last month, midfielder Patrick Vieira has decided to retire from the game and is expected to be revealed as a coach and club ambassador at City today.
Vieira had discussions with Arsenal about a role at the Emirates but the club did not propose anything concrete. Despite his having played nine years at Arsenal and 18 months at City, manager Roberto Mancini gets his services. The 35-year-old is expected in Los Angeles with the City pre-season tour, where he will explain his decision next week.
What shite that is. So globally they're worth more because they will play more games i.e. Champions League. So it's not the number of people who watch the game it's the number of games that are watched. Laughable. This sponsor ship deal positively reeks of nepotism.
How the fuck can a company's profit & size not have an impact on the decision about whether that company is inappropriately being used to prop up a football club?
They make NO MONEY, yet they're giving 400 MILLION POUNDS to City, & are owned by the City owners family.
That sentence is all the information you need to decide whether this deal is above board or not.
They make NO MONEY, yet they're giving 400 MILLION POUNDS to City, & are owned by the City owners family.
That sentence is all the information you need to decide whether this deal is above board or not.
[quote author=Sunny link=topic=46055.msg1364811#msg1364811 date=1310631501]
What shite that is. So globally they're worth more because they will play more games i.e. Champions League. So it's not the number of people who watch the game it's the number of games that are watched. Laughable. This sponsor ship deal positively reeks of nepotism.
[/quote]
Its not particularly the CL either they got to the cup final too, did they have a League cup run, can't remember. It is bollocks, but it is the sort of bollocks they will spout when challenged, hopefully there will be people as astute as JH around to show them it's bollocks
regards
What shite that is. So globally they're worth more because they will play more games i.e. Champions League. So it's not the number of people who watch the game it's the number of games that are watched. Laughable. This sponsor ship deal positively reeks of nepotism.
[/quote]
Its not particularly the CL either they got to the cup final too, did they have a League cup run, can't remember. It is bollocks, but it is the sort of bollocks they will spout when challenged, hopefully there will be people as astute as JH around to show them it's bollocks
regards
bullshit.
random thoughts:
1. no way this can credibly be deemed fair value. UEFA face absolute open revolt if they this is let through - let's not forget that FSG invested £300m in the sport based largely on these guidelines, so i'm a bit sceptical of those saying UEFA will be able to weasel their way out of it, or even if they'd really want to.
2. still, undeniable that UEFA seem to have made a rod for their own backs here: whatever happens, they've put themselves right in the middle of a fight between rich and powerful parties, and whether such woolly tests as 'fair value' will be robust enough to enforce the rules is pretty doubtful.
3. as outrageous as the £400m deal is, the worst of it is that city don't even own the fucking ground! that can't be right: a huge percentage of that money should be going to Manchester City Council.
4. as i've said numerous times, that arsenal deal with emirates looks worse and worse as time goes on. they've actually lost money on it just on the growth in shirt sponsorship values alone. this is something we need to be very wary of if we eventually have to move and negotiate a naming agreement: we can't afford to get locked into a bad long-term deal as arsenal have.
1. no way this can credibly be deemed fair value. UEFA face absolute open revolt if they this is let through - let's not forget that FSG invested £300m in the sport based largely on these guidelines, so i'm a bit sceptical of those saying UEFA will be able to weasel their way out of it, or even if they'd really want to.
2. still, undeniable that UEFA seem to have made a rod for their own backs here: whatever happens, they've put themselves right in the middle of a fight between rich and powerful parties, and whether such woolly tests as 'fair value' will be robust enough to enforce the rules is pretty doubtful.
3. as outrageous as the £400m deal is, the worst of it is that city don't even own the fucking ground! that can't be right: a huge percentage of that money should be going to Manchester City Council.
4. as i've said numerous times, that arsenal deal with emirates looks worse and worse as time goes on. they've actually lost money on it just on the growth in shirt sponsorship values alone. this is something we need to be very wary of if we eventually have to move and negotiate a naming agreement: we can't afford to get locked into a bad long-term deal as arsenal have.
[quote author=Binny link=topic=46055.msg1366227#msg1366227 date=1310875821]
The fact is for once the football authorities have come up with a good idea to help save the game from oblivion and they surely can't fall at the first hurdle that is thrown up.
Fuck Peter Barnes, I don't like Wenger myself, but who the fuck is Peter Barnes to be telling him he is talking crap, he has been sunk without trace for about thirty years.
Regards
[/quote]Hmmmmmmm. Poor old Peter does not seem to grasp the concept of the FFP......I think the line about sour grapes and untold riches might be the give-away there. The idea that Arsenal and United slugged it out was because they were well run well managed clubs, and not a billionaires play-thing seems to have gone over his head.
The fact is for once the football authorities have come up with a good idea to help save the game from oblivion and they surely can't fall at the first hurdle that is thrown up.
Fuck Peter Barnes, I don't like Wenger myself, but who the fuck is Peter Barnes to be telling him he is talking crap, he has been sunk without trace for about thirty years.
Regards
The problem is they've worded FFP exactly the way they need to in order to allow themselves a get out clause.
Fair value & comparison of deals means if a deal has several exclusive elements, as this one does, they can say they can't compare fair value with another club. I think that's exactly why they've included the land, property & flights not just stadium rights.
Fair value & comparison of deals means if a deal has several exclusive elements, as this one does, they can say they can't compare fair value with another club. I think that's exactly why they've included the land, property & flights not just stadium rights.
[quote author=FoxForceFive link=topic=46055.msg1366274#msg1366274 date=1310893402]
The problem is they've worded FFP exactly the way they need to in order to allow themselves a get out clause.
Fair value & comparison of deals means if a deal has several exclusive elements, as this one does, they can say they can't compare fair value with another club. I think that's exactly why they've included the land, property & flights not just stadium rights.
[/quote]
so what exactly is it that Etihad are claiming the £400m pays for?
and if uefa have indeed cunningly worded the rules in order to allow clubs to weasel out of them, doesn't that beg the question of why the fuck they bothered trying implement the changes in the first place?! what grand conspiracy is it they're hiding?
The problem is they've worded FFP exactly the way they need to in order to allow themselves a get out clause.
Fair value & comparison of deals means if a deal has several exclusive elements, as this one does, they can say they can't compare fair value with another club. I think that's exactly why they've included the land, property & flights not just stadium rights.
[/quote]
so what exactly is it that Etihad are claiming the £400m pays for?
and if uefa have indeed cunningly worded the rules in order to allow clubs to weasel out of them, doesn't that beg the question of why the fuck they bothered trying implement the changes in the first place?! what grand conspiracy is it they're hiding?
I don't think it's a grand conspiracy, I think it was started with the greatest intentions, then they've realised if they enforced it tonteh letter in the original spirit it would mean they end up killing their cash cows. As such theyve had to make it more flexible. They've already said they'll not enforce the rules rigidly if they can see clubs are making an effort, & even stated that would be needed for clubs way ove the FFP guidelines.
I can't remember the exact etihad deal but they've added loads of land & property sponsorship to a huge complex they're building around east lands, etihad are also supplying that liveried plane running flights to & from games.
Its like us getting a turf sponsor for 100m. Who can claim it's not fair value, no other club has a turf sponsor so that burden of proof is difficult.
I can't remember the exact etihad deal but they've added loads of land & property sponsorship to a huge complex they're building around east lands, etihad are also supplying that liveried plane running flights to & from games.
Its like us getting a turf sponsor for 100m. Who can claim it's not fair value, no other club has a turf sponsor so that burden of proof is difficult.
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