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Manchester City Consult Arsenal As They Target Biggest Stadium Naming Rights Deal In Football
Big spenders looking to raise £150m through Eastlands sponsor
By Wayne Veysey
Feb 24, 2011 2:05:00 PM
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Find the best odds and bet on the Premier League. Manchester City are targeting the biggest stadium naming rights deal in world football after opening talks with potential sponsors, Goal.com UK can reveal.
City officials are hopeful of sealing a £150 million deal lasting between 10 and 15 years.
As a starting point in their negotiations, they have picked the brains of Arsenal and their stadium sponsors Emirates, who signed a £100m agreement with the Londoners that began when the 60,000-capacity venue opened in 2006 and runs until 2021.
City commercial bosses have already begun visiting leading financial institutions around the globe, including the Middle East and the Far East, as they ascertain the value in a market that is relatively new for British sports stadia.
The club’s shirt sponsors Etihad, the national airline of the United Arab Emirates, have emerged as the early front-runners to be the stadium sponsor.
Etihad is run by the Abu Dhabi government, and like City, backed by the royal family. However, the deal would be a commercial one rather than just an opportunity to use one company to promote another.
City officials, led by chief executive Garry Cook, believe stadium naming rights can help boost the club’s revenue and enable it to meet Uefa’s financial fair play rules that require clubs in European competition to be close to breaking even within three years. City posted a loss of £121m, the second biggest in Premier League history, in their last set of financial results.
Although a lucrative stadium naming rights deal is a bona fide means of increasing income, Uefa has placed restrictions on what ‘related companies’ may offer in sponsorship compared to market rates.
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It is further complicated for Eastlands officials by the fact that the City of Manchester Stadium is owned by Manchester City Council, although the club are in advanced talks to renegotiate the lease on the ground.
Stadium naming rights is common in American sports, particularly baseball, basketball and American Football and shared sports venues. The highest amount paid for naming rights in any sport is the £245m, 20-year deal agreed between Citigroup and Major League Baseball’s New York Mets, who have played at Citifield since 2009.
The market is less mature in football, even if it is commonplace in countries such as Germany, Japan and Australia. Although precedents in England include Bolton Wanderers, Stoke City, Wigan Athletic, Coventry City and Leicester City, Arsenal are deemed a better yardstick by Manchester City because of their status and global appeal.
“City are looking to sign a similar length deal to Arsenal,” a source told Goal.com UK. “They are keen to get fair value by investigating what the stadium sponsorship market will be worth in 15 years’ time.
“Arsenal’s deal with Emirates was front-loaded to allow them to get more cash up front and pay for the cost of building Emirates Stadium. This has convinced City that they can negotiate more than the £6.7m-a-year deal that Arsenal have, especially with the growing international audience for the Premier League brand.”
City also believe that the relative youth of the City of Manchester Stadium should not be a negative factor in negotiations. “The ground is not associated with the club the way Maine Road used to be or Old Trafford is with Manchester United,” added the source.
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