City scores victory with Etihad deal

The 10-year tie-up between club and carrier is 'greater than what we've seen before,' says the Man City chief executive. It is believed that yesterday's agreement might be triple the size of the prior record-holder, which was signed seven years ago

The City of Manchester Stadium has been renamed Etihad Stadium

MANCHESTER, UK // It is a corner of England known as much for its persistent rain as for its two top-of-the-league football teams.

But yesterday, Manchester was brightened by news that Etihad Airways is to spend hundreds of millions of dollars stamping its name over part of this bustling city.

The Abu Dhabi airline signed a 10-year sponsorship deal with Manchester City Football Club, in what is said to be the largest such arrangement in the history of UK football. Previously nicknamed Eastlands, the City of Manchester Stadium has been rechristened the Etihad Stadium, as part of a deal valued at almost half a billion dollars. The move is the latest victory for the club, which recently won the FA Cup and has secured a place in the Uefa Champions League.

Under the agreement, the club and the airline extended an existing shirt-sponsorship deal, while the area around the stadium will be renamed the Etihad Campus. The club expects about two million people to visit the campus during the 2011/12 football season. Manchester City games will now be shown on Etihad's inflight entertainment system, and the two companies formed a series of other business and community outreach deals.

"We are delighted to announce a 10-year extension of our partnership with Etihad Airways," said Garry Cook, the chief executive of Manchester City Football Club.

"The partnership will cover not only our shirt sponsorship extension, which we have enjoyed a successful two years since May 2009 ... but also from today, the stadium that we sit in will be known as the Etihad Stadium."

Sir Richard Leese, leader of Manchester City Council, said he hoped the partnership would give an economic boost to the area.

"We will no longer have a stadium named after us, but there are lots of positives that go with this," he said. "We welcome Etihad as a new partner within that effort to make sure that we do economically exploit this area to create new jobs for the people around here."

Etihad and Manchester City would not be drawn on the value of the deal. But Mr Cook said its size "is greater than ... what we've seen before". That means the partnership is worth more than a previous record-setting deal struck by Emirates. In 2004, the Dubai airline signed a 15-year sponsorship deal with Arsenal Football Club, which was valued at £100 million (Dh589m) over 15 years.

Etihad's deal could be worth more than three times the Emirates deal, with Bloomberg News reporting it is worth US$480 million (Dh 1.76bn) over the 10-year duration.

Bashar Abdulkarim, the managing director of sports marketing and sponsorship consultancy at Relay Mena, said the Etihad deal would trump the Emirates sponsorship of Arsenal in terms of value. "It's a massive deal. Definitely it's a higher value than the Arsenal deal. It could be $480 million - I wouldn't be surprised," he said.

"Once you have Manchester City competing in Europe, it's good for the airline in terms of naming rights," he added. "But for the hard-core fan who goes to the City stadium, it's going to take them some time to get used to the new name, if they get used to it."

The sponsorship deal strengthens Abu Dhabi's links with Manchester City, which Sheikh Mansour bin Zayed acquired in 2008. Sheikh Mansour has spent a reported $1 billion since the acquisition, buying international players such as Carlos Tevez and David Silva. Etihad signed a shirt-sponsorship deal in 2009 worth $3.7 million a year.

"That victory was a good omen for us. We have seen real fruits from our relationship with the club," said James Hogan, the chief executive of Etihad.

However, challenges lay ahead. Manchester City lost £121.3 million in its last financial year, and like other clubs is trying to increase its revenue under new financial criteria imposed by European football's governing body, Uefa.

The Etihad deal will go a long way to stemming those losses, in what Brian Greenwood, the managing partner for India and the Middle East at the sports marketing consultancy Prism, calls a "win-win" situation. "The relationship between Etihad and Man City is clearly long-term and strategic which is the best scenario for naming rights. I am sure Etihad will get great value from the deal in terms of increased global awareness," he said.