A consultants’ report written for the Crown Prince of Abu Dhabi stated that the Abu Dhabi government, not Etihad airlines, was “covering” the sponsorship of Manchester City in 2010, according to a 2015 US aviation industry document.
Uefa’s financial fair play compliance body, the CFCB, banned City from the Champions League for two seasons on Friday and fined the club €30m, having concluded the club was not being truthful in its submissions from 2012-16 that Etihad wholly funded its annual £67.5m sponsorship.
The CFCB investigation and findings followed the publication of internal City emails by the German magazine Der Spiegel in November 2018, which suggested Etihad was not funding the bulk of the sponsorship and that most of the money was being provided by City’s owner, Sheikh Mansour bin Zayed Al Nahyan, the Crown Prince’s brother. In one of the emails, City’s then chief financial officer, Jorge Chumillas, had sent two invoices internally for the £67.5m 2015-16 sponsorship, stating that “£8m should be funded directly by Etihad and £59.5 [sic] by ADUG” – Mansour’s company vehicle.
City have furiously rejected the conclusion and suggestion that Etihad did not wholly fund the sponsorship, claiming that the CFCB’s two “chambers” were biased, “flawed,” had prejudged the outcome and had ignored “irrefutable evidence”.
The US aviation industry document was produced in 2015 by the “Partnership for Open and Fair Skies”, an alliance of three major US airlines and aviation staff unions. They were arguing to the US departments of commerce, transportation and state that Etihad was receiving enormous subsidies from the Abu Dhabi government, which, they claimed, distorted fair competition. The document refers to an internal report on Etihad prepared for the Crown Prince, Sheikh Mohamed bin Zayed Al Nahyan, by consultants in 2010, which was leaked in 2014 to the Australian Financial Review. The consultants noted, in reference to a list of Etihad’s sponsorships: “Executive Council covers Man City”.
The executive council is in effect the Abu Dhabi governing body, and is chaired by the Crown Prince, who is widely considered the most powerful member of the ruling family. The senior business executive and political figure who was appointed to be City’s chairman after Mansour’s 2008 takeover, Khaldoon Al Mubarak, is a member of the Executive Council. He also chairs the Executive Affairs Authority, which advises on Abu Dhabi’s strategy and image, and works principally for the Crown Prince.
Referring to the Etihad sponsorship, the US airlines’ document said: “While Etihad asserts that it funded the $640m [total] cost of the sponsorship of Manchester City ‘from its own liquidity,’ it provides no such evidence and fails to address the contrary evidence that the US airlines submitted on this point: an internal study that [the consultants] prepared for the Crown Prince of Abu Dhabi, which states that the Executive Council of Abu Dhabi – not Etihad – covers the cost. As an internal document that was not intended for public release, [the consultants’] study is particularly probative of the funding’s true source.”
Etihad denied that absolutely in their response to the US airlines’ allegations, submitted to the US departments in May 2015. The Abu Dhabi airline rejected the claim that its huge funding from the Abu Dhabi government represented subsidies and said of the City deal: “The assertion that the Abu Dhabi government paid for Etihad’s sponsorship of English Premier League football club Manchester City is equally false. In 2011, Etihad and Manchester City entered into a 10-year sponsorship agreement, which included naming rights for Manchester City’s stadium. Etihad funded this sponsorship from its own liquidity. It is not uncommon for airlines to have sponsorships with sports teams and their venues.”
Etihad did not refer in that response to the consultants’ review or explain why the consultants had said “Executive Council covers Man City”.
Following the publication of the internal City emails suggesting Mansour’s own company was heavily subsidising the sponsorship, Etihad responded by saying: “Etihad Airways is proud to have been Manchester City FC’s main club partner since May 2009. The airline’s financial obligations, associated with the partnership of the club and the broader City Football Group, have always been, and remain, the sole liability and responsibility of Etihad Airways. This is reflected in the airline’s audited accounts.”
The airline’s audited accounts are not published, but the US document published an apparent copy of the 2013-14 accounts that showed Etihad had accumulated losses of $3.8bn and had drawn down $5bn of loans from the Abu Dhabi government, which had also contributed a further $2.5bn in share capital. The accounts stated Etihad had spent a total of $150m during the year on advertising and promotion, although that was not itemised and the City sponsorship was not specifically referred to.
City have denied throughout that Etihad’s sponsorship is subsidised and said they are to appeal against the Uefa CFCB conclusion and penalty to the court of arbitration for sport. – Guardian
