Man City are now closing in on a new sponsorship deal worth £1.5billion over ten years after reaching a settlement with the Premier League, according to reports.
The Citizens had been embroiled in a legal battle with the Premier League as they challenge the APT rules in place, claiming the regulations were “unlawful”.
APT rules are designed to ensure any commercial deal or player transfer between a club and entities with links to that club’s ownership are conducted at fair market value, so that club revenues are not artificially inflated.
But in September both Man City and the Premier League came to a ‘settlement’ regarding the APT rules with an agreement ‘to terminate the proceedings’.
A statement from Man City in early September read: ‘The Premier League and Manchester City FC have reached a settlement in relation to the arbitration commenced by the club earlier this year concerning the Premier League’s Associated Party Transaction (APT) Rules and as a result the parties have agreed to terminate the proceedings.
‘This settlement brings an end to the dispute between the parties regarding the APT Rules. As part of the settlement, Manchester City accepts that the current APT Rules are valid and binding.
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‘It has been agreed that neither the Premier League nor the club will be making any further comment about the matter.’
And now Football Insider insists that Man City ‘are closing in on a sponsorship deal worth up to £1.5billion’ with state-owned Abu Dhabi airline Etihad Airways after a deal was initially blocked in 2023 by the APT rules.
Former Man City financial adviser Stefan Borson has explained how much the deal will be worth to the Citizens due to indexation.
Borson told Football Insider: “It’ll be a lot because of the way compounding works.
“We know that City have got a deal because Etihad was on the shirt last season. It’s on the shirt this season and the stadium is still called the Etihad. We know that they have done the first couple of years of this 10-year deal that they put to the Premier League originally in 2023, so it wasn’t binary.
“Then I think really from what you can gather from the first APT decision, the way that the deal works was that you had an escalator each year. So, it starts off at let’s say for the sake of discussion a £100million per annum for all of the rights. There’s a lot of rights involved here.
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“In fact, I think this is one of City’s arguments is that no other club has got such an all-encompassing deal. No other club has got a sponsor for the kit, the stadium, the training complex, everything else. So, therefore, it’s very hard to come up with the right value.
“Let’s say it was 100m, then each year you add, let’s say 5 per cent indexation, which is inflation, and each year it goes up 5 per cent because you’re trying to get the annual average value in real terms to be the same as it was in the first year. So, in effect by the time you get to year 10, it’s up to £150m because of the way indexation works.
“Now, if what happens in the contracts appears to be in the latter years there’s some kind of mechanism whereby certain intellectual property rights also grow by a certain percentage, we don’t know what these IP rights are, but this was what the Premier League said you’ve just gone too far, it’s too expensive.
“The top and bottom of it is, I think the new deal as it is will be upwards of £1.5bn-plus over the 10 years with all of the indexation the compounding and everything else.”
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