x Abu Dhabi, UAEWednesday 26 July 2017

Etihad joins the league of big-time sponsors

The airline's sponsorship deal with Manchester City FC promises to drive the global ambitions of both brands.

A Ferrari F1 car at the Bahrain Grand Prix bearing the Mubadala logo.
A Ferrari F1 car at the Bahrain Grand Prix bearing the Mubadala logo.

No one can say that Etihad Airways' sponsorship deal with Manchester City Football Club is much of a surprise. Rumours of some such deal had been circulating around the football-watching water cooler since not long after Sheikh Mansour bin Zayed purchased the English Premier League club last September through his Abu Dhabi United Group for Development and Investment (ADUG).

But the definitive announcement yesterday represents an important step in both brands' global ambitions. For Manchester City, it means stronger ties with Abu Dhabi and an opportunity to capitalise on Etihad's ability to further internationalise its fan base. For the six-year-old airline, becoming the shirt sponsor of an English Premier League team is its boldest step yet on to a stage it has been methodically approaching through sponsorships with Formula One and Ferrari.

Peter Baumgartner, the chief commercial officer of Etihad, said the deal represented a tie-up between two ascending properties that could only help each other more as they became better known. "A team like Man City has the ambition and, of course, now the opportunity, with the Abu Dhabi investment group, to build not only a leading UK brand, but a global brand," he said. "We are also building a global brand. So we would like to become an equal vehicle for Man City, not just by sticking a logo on to a T-shirt, but by playing an active role in developing Man City's global reputation, which in turn helps us build our reputation. That's a unique opportunity."

Besides both being what Mr Baumgartner calls "challenger brands" - those that have not yet reached their potential but are nipping at the heels of the market leaders - Etihad and Manchester City also share the obvious Abu Dhabi connection. "There is already an association between Man City and Abu Dhabi, and what we do very well in Abu Dhabi is create, live and exploit the opportunities of Abu Dhabi Inc," Mr Baumgartner said. "It's a logical step for us."

But that does not mean it wasnecessarily a cheap one. The value of the deal has not been released, but Mr Baumgartner said: "It was a normal, commercially driven negotiation, as it would be between any other partners. There was no discount for contributing to the Abu Dhabi Inc story." But there may be benefits down the line. If ADUG does invest in the football club as many experts expect, the marketing power of a Manchester City shirt sponsorship could expand considerably between this summer, when the tie-up begins, and three years from now, when the contract expires.

As a young airline founded in 2003, Etihad has placed heavy emphasis on the power of sports sponsorships to get its name known. But it started small, sponsoring a lesser-known Formula One team, Spyker, before moving on to sponsor Ferrari. "We have taken a stepping-stone approach," Mr Baumgartner said. "Ferrari came at the right time for us. It was the right time for us to be on a big car. With the Abu Dhabi association that Ferrari already has [Mubadala, the strategic investment arm of the Abu Dhabi Government, is a part-owner], it was the right thing for us."

The airline is also a sponsor of the Abu Dhabi Grand Prix, scheduled for November. Etihad approached its football sponsorships with similar caution in the beginning, signing on to be a platinum sponsor of Chelsea, a deal that did not include logo placement on a shirt, but instead allowed the airline to do things like brand Chelsea's home stadium with Abu Dhabi-themed entertainment, decorations and even food for a day.

Etihad has no intention of changing this relationship, Mr Baumgartner said. Other companies, such as Thomas Cook, had sponsored both teams in similar ways, without conflict, he said. And Chelsea gave the airline somewhere to entertain clients in London. "We're very happy with our partnership and there's no reason to change it," he said. But it's clear that he views the Man City sponsorship - which, apart from the Etihad logo on the players' blue shirts, includes plans to work together on team tours to the UAE and South Africa as well as community projects in the UAE and east Manchester - as being in a category of its own.

"You can be the official airline of a team, or a platinum partner, but as long as you are not on the shirt, you are not exactly in the same league as many others," Mr Baumgartner said. "It's our time to be on a shirt." @Email:khagey@thenational.ae