Etihad Airways, the sponsors of Manchester City, are reportedly planning to go public on the stock exchange – and it could have huge implications for the Premier League champions
Manchester City’s hopes of beating their 115 financial charges by the Premier League could hinge on the accounts of one of their main sponsors.
At the heart of the charges is the club’s sponsorship deal with Etihad Airways. The airline is planning to go public on the stock exchange, which could reveal fresh evidence in the case. They are reportedly planning to go public as soon as this year.
A report by German publication Der Spiegel claims leaked emails suggest the airline was only paying £8million of their official £67.5m obligation to City from the 2012-13, 2013-14 and 2015-16 seasons, respectively, with the rest coming from the Abu Dhabi United Group.
This would breach financial rules set by both the Premier League and UEFA while it could also suggest a fraudulent conspiracy between City’s top brass and Etihad executives according to one industry source.
City strenuously deny the charges and said they “look forward to this matter being put to rest once and for all”. In a statement issued in February 2023, the club said: “Manchester City FC is surprised by the issuing of these alleged breaches of the Premier League Rules, particularly given the extensive engagement and vast amount of detailed materials that the EPL has been provided with.”
“The club welcomes the review of this matter by an independent commission, to impartially consider the comprehensive body of irrefutable evidence that exists in support of its position. As such we look forward to this matter being put to rest once and for all.”
Recent reports from the Middle East suggest that Etihad is preparing for a public share sale. This means they would show everyone their financial details, which could help the club clear up any doubts, says The Mirror.
Stock market experts believe that Etihad wouldn’t let people see their accounts if it could reveal any wrongdoing. “If it came to light that Etihad executives were indeed involved in manipulating the sponsorship deal with City, it could cause serious damage to the company’s reputation in the eyes of potential investors,” a senior figure in the investment banking industry told The Sunday Mirror.
Etihad would also have an obligation to disclose any ongoing investigation into the company’s accounts or conduct before the Initial Public Offering (IPO) was launched.
“What the Premier League are alleging is extremely serious, not just in terms of football’s rules and regulations,” the expert added. “The accusation is that City executives have colluded with officials from Etihad and have lied not only to the club’s independent auditors but to the Court of Arbitration for Sport.”
“By extension, that also calls into question what information was disclosed by City’s owners to Silverlake before the American private equity firm bought a significant stake in the club in 2019. That’s why the Premier League’s allegations go way beyond accusing City of failing to meet Profit and Sustainability Rules.”
The Court of Arbitration for Sport (CAS) ruled nearly four years ago that any suggestion of a conspiracy involving executives of both City and Etihad, as well as high-ranking Abu Dhabi officials and even members of the country’s Royal family was beyond the realms of possibility. This ruling came when they overturned a two-year Champions League ban levied against the club by UEFA for failing to meet Financial Fair Play (FFP) regulations.
During the appeal process, City’s owner, Sheikh Mansour, sent a letter to support the appeal. City also managed to have their £25.75m fine cancelled but were given an £8.6m penalty for not cooperating with UEFA’s investigation. Etihad, currently a state-owned airline, has been City’s sponsor since the summer of 2011 when a 10-year deal was first announced.
When asked about the possibility of the company going public on the stock exchange, Etihad Airways Group CEO Antonoaldo Neves told CNBC at the beginning of March: “I’m working to be ready, whenever it’s the time. It’s not for me to confirm the shareholder decisions,” Neves added. “It’s our obligation to be ready to IPO the company whenever the shareholder believes it is the right time… and this is good, even if you don’t do it.”
The company’s potential public listing later this year could coincide with the Independent Commission’s hearing into charges against Manchester City. The Premier League champions maintain their innocence amidst these allegations.
