City lost an eye-watering £121m last year, following £93m in 2009, as the club funded by Sheikh Mansour bin Zayed Al Nahyan of Abu Dhabi climbed to fifth place in the Premier League. The losses for 2010-11, due to be published in October, will almost certainly be even greater, covering a year in which City’s squad, featuring galactic wage-collectors such
as Yaya Toure and David Silva, qualified for Uefa’s Champions League and won the FA Cup at Wembley.
Uefa’s rules were introduced to bring some sanity to a European game in which, despite its greatest-ever boom, competition for success between financially unequal clubs has led to more and more of those in the top divisions to record losses.
Michel Platini, the Uefa president who said in Monaco in August that he sees “red lights” for football in its troubled relationship with money, often seems to be howling for the simpler times of his own playing career, when few talked about clubs’ finances – even though money did still determine who could afford the great players like him.
Financial Fairplay (FFP) has been introduced to address the club losses which can push some into insolvency, leaving angst-ridden fans, a trail of creditors and infamy across a game drowning in money.
Seen from the perspective of Mansour’s vast spending, Uefa’s required regime is quite tight. Clubs which qualify for either the Champions or Europa Leagues – in 2014, an important detail – must be moving towards breaking even, and any losses, which have to be covered with a permanent cash injection, not loans, from an owner, may not exceed a total of €45m (£40m) over both the 2012 and 2013 financial years. Sanctions are not yet defined. The top clubs have suggested penalties should be financial, but Uefa’s general secretary, Gianni Infantino, has made it clear Uefa’s credibility depends on it being prepared to exclude clubs.
Sceptics have quickly suggested a potential loophole – that owners could dress up their investment as outsized sponsorship deals – but Uefa anticipated that, incorporating into the rules a requirement that all sponsorship deals must be for demonstrable “fair value”. Those wondering what this will mean in practice may find out courtesy of City, whose new deal appeared designed to test “fair value” to its boundaries.
City say the headlines were misguided and claim that the sponsorship from Etihad, the airline ultimately owned, as are all Abu Dhabi state enterprises, by Mansour’s ruling Al Nahyan family, is not for £400m over 10 years, nor is it just for naming rights on what was the City of Manchester Stadium. The deal is closer to £300m, some sources suggested, for the stadium, shirt sponsorship and naming of the planned new training campus.
Nevertheless, such a huge boost to City’s income will be examined by Uefa to determine if it is a genuine, commercial sponsorship deal, not owner-investment by other means and they
are currently appointing experts in the art of “fair value” to help judge the clubs’ deals.
But however monstrous a club’s figures might be in 2012, and however exceeding “fair value” its sponsorship might look, the clubs will only be assessed for the 2014-15 season. That means Manchester City, along with everyone else, can compete this season and next, even win the club game’s greatest prize, and then be found in 2014 to have failed to comply with Financial Fairplay. This gives City three years to enjoy their Etihad deal before Uefa rules on whether it is fair value or an Abu Dhabi sweet.
By David Conn