UEFA to Investigate Major Sponsorship Deals

July 11, 2011

English Premier League soccer club Manchester City’s groundbreaking sponsorship deal with Etihad Airways on Friday has caused UEFA to pledge to investigate all major sponsorships involving top European clubs.

It has emerged over the weekend that the 10-year commercial partnership is thought to be worth as much as US$640m, with the agreement comprising naming rights for the club’s stadium, as well as shirt sponsorship. Etihad is the national airline of Abu Dhabi, whose ruler is the half-brother of City owner Sheikh Mansour.

Sceptics believe the deal is artificially inflated to aid City’s attempts to meet UEFA’s Financial Fair Play rules but the club, which is expected to announce a significant financial loss in two months’ time, has insisted the deal was based on legitimate market values.

However, a UEFA spokesperson said on Sunday: “UEFA will use relevant experts to make assessments as to the fair value of any major sponsorship deals, using appropriate industry benchmarks.”

The spokesperson added: “These will then be considered by the Club Financial Control Panel, together with any relevant information the clubs present regarding the deals, when they assess the break-even requirements.”

Manchester City CEO Garry Cook said that there had already been conversations between the club and UEFA over meeting the new Financial Fair Play regulations.

Cook explained: “We have a very open dialogue with UEFA. We have had several meetings with UEFA about our plans and they are very supportive of Manchester City’s ambition. There are many football clubs who have the backdrop of regulation that is being placed into the world of football. We are no different to any other football club.”

After the announcement of the deal on Friday, Cook said: “In addition to delivering significant revenue at a key stage in the club’s evolution, the agreement creates exciting opportunities for our two organisations to co-operate more deeply commercially and on media and community initiatives in the future.” Etihad CEO James Hogan called the deal “a game-changing partnership agreement that redefines the traditional sports sponsorship paradigm”.