City & FFP | 2020/21 Accounts released | Revenues of £569.8m, £2.4m profit (p 2395)

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ChicagoBlue said:
With the same decision maker on both sides of the table, he would pretty much be taking someone else’s money to fund his own venture, not kicking himself up the arse.
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No, he wouldn't, he'd be working to the benefit of one healthy and profitable business he owns over another he owns that's going through difficulty. Being associated with City has been very beneficial for Etihad.
 
Putting 2 and 2 together here, is it plausible that given Etihad's troubles, they're having cash flow issues and struggling to find the funds for the sponsorship while they restructure? So as opposed to Sheikh Mansour pumping in more equity to help with cash flow, we're borrowing the money from Barclay's to use as working capital until such a time as Etihad are in a more stable position?

I'm not an accountant, but would the 13% ownership in the holding company by Chinese investors influence this decision? If they didn't have that equity stake, I'm sure it would be fairly straightforward for SM to pump the funds in as working capital and then convert to equity if he wanted. But seen as we now have the Chinese investors, would that not in effect dilute their shareholding? Therefore the Barclay's loan makes more sense as it will have zero impact on the shareholding of the club?

As I say, I'm far from an expert, just thinking out loud.
 
Shaelumstash said:
Putting 2 and 2 together here, is it plausible that given Etihad's troubles, they're having cash flow issues and struggling to find the funds for the sponsorship while they restructure? So as opposed to Sheikh Mansour pumping in more equity to help with cash flow, we're borrowing the money from Barclay's to use as working capital until such a time as Etihad are in a more stable position?

I'm not an accountant, but would the 13% ownership in the holding company by Chinese investors influence this decision? If they didn't have that equity stake, I'm sure it would be fairly straightforward for SM to pump the funds in as working capital and then convert to equity if he wanted. But seen as we now have the Chinese investors, would that not in effect dilute their shareholding? Therefore the Barclay's loan makes more sense as it will have zero impact on the shareholding of the club?

As I say, I'm far from an expert, just thinking out loud.
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It could be that tbf and I'm not going to discount what you're saying, but Mansour could easily put in a director loan to be paid back when Etihad were stable without any effect on the shares. Honestly, I think it's just that he wants 6 degrees of separation so he can show that the investment was successful and City stand on their own feet without him in regards to financing.
 
aguero93:20 said:
No, he wouldn't, he'd be working to the benefit of one healthy and profitable business he owns over another he owns that's going through difficulty. Being associated with City has been very beneficial for Etihad.
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Their financial results beg to differ, but what do I know. I’m sure a few Mancs hopping on a flight every now and then must have them bathing in Kristal in Abu Dhabi.
 
aguero93:20 said:
Absolutely not. A loan isn't income, it can't be used to offset spending.
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So, what exactly does a loan do? Your first assertion, while correct, does not necessitate your second point. Surely, if it is not to offset asset spending, it is an expensive way to pad your current account, no? After all, what is a mortgage, car loan, etc...?
 
ChicagoBlue said:
So, what exactly does a loan do? Your first assertion, while correct, does not necessitate your second point. Surely, if it is not to offset asset spending, it is an expensive way to pad your current account, no? After all, what is a mortgage, car loan, etc...?
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A loan improves cashflow. Borrowing money doesn't mean you make a profit. A mortgage is an influx of cash that allows you to buy a house, but creates expenditure over a large period of time. It's a liability.
 
ChicagoBlue said:
Their financial results beg to differ, but what do I know. I’m sure a few Mancs hopping on a flight every now and then must have them bathing in Kristal in Abu Dhabi.
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It's raised their profile to a huge extent globally. I know you work for a US airline and are afraid of the UAE lines, but do you really think Emirates have been sponsoring Arsenal for the last 15 years for shits and giggles?
 
ChicagoBlue said:
Their financial results beg to differ, but what do I know. I’m sure a few Mancs hopping on a flight every now and then must have them bathing in Kristal in Abu Dhabi.
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I think you’re possibly confusing Etihad’s profitability and it’s brand exposure.

“A few Mancs hopping on a flight every now and then” is clearly not enough to make a premium class Middle Eastern long haul airline profitable.

But I think you’re being a bit naive if you think Etihad’s sponsorship of City was with the intention of making that money back through “Mancs hopping on a plane to Abu Dhabi”.

Clearly the bigger picture with sponsoring City was to get exposure for the brand in the UK and pretty much anywhere the PL is watched worldwide. I’d never heard of Etihad before they sponsored us. My friends and family hadn’t. I’d expect they weren’t a particularly well known airline accross the UK when they sponsored us.

But now they are very widely known accross the country. Ask a thousand people accross the UK what’s the first thing you associate with Etihad, I’ll bet you the top answer will be Manchester City. I’ve no doubt that pattern would be repeated all over the world where the PL is popular.

There are a thousand variables that go in to making an airline profitable, you’re far more qualified than me to know what they are. Brand recognition isn’t the only one. But brand recognition is the only one that the City sponsorship has got anything to do with. And in terms of increasing exposure and awareness for the Etihad brand, the sponsorship of City has been a monumental and unqualified success.

Khaldoon himself says that when he goes in to meetings around the world on Abu Dhabi state business, the first thing people mention to him is Manchester City. It’s a great opening, a conversation starter. I have no doubt the same thing happens with Etihad executives.

You’re seeing Etihad sponsor City and Etihad not being profitable and linking the two things together. But as the old cliché goes, correlation does not imply causation.
 
Shaelumstash said:
I think you’re possibly confusing Etihad’s profitability and it’s brand exposure.

“A few Mancs hopping on a flight every now and then” is clearly not enough to make a premium class Middle Eastern long haul airline profitable.

But I think you’re being a bit naive if you think Etihad’s sponsorship of City was with the intention of making that money back through “Mancs hopping on a plane to Abu Dhabi”.

Clearly the bigger picture with sponsoring City was to get exposure for the brand in the UK and pretty much anywhere the PL is watched worldwide. I’d never heard of Etihad before they sponsored us. My friends and family hadn’t. I’d expect they weren’t a particularly well known airline accross the UK when they sponsored us.

But now they are very widely known accross the country. Ask a thousand people accross the UK what’s the first thing you associate with Etihad, I’ll bet you the top answer will be Manchester City. I’ve no doubt that pattern would be repeated all over the world where the PL is popular.

There are a thousand variables that go in to making an airline profitable, you’re far more qualified than me to know what they are. Brand recognition isn’t the only one. But brand recognition is the only one that the City sponsorship has got anything to do with. And in terms of increasing exposure and awareness for the Etihad brand, the sponsorship of City has been a monumental and unqualified success.

Khaldoon himself says that when he goes in to meetings around the world on Abu Dhabi state business, the first thing people mention to him is Manchester City. It’s a great opening, a conversation starter. I have no doubt the same thing happens with Etihad executives.

You’re seeing Etihad sponsor City and Etihad not being profitable and linking the two things together. But as the old cliché goes, correlation does not imply causation.
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Ryanair and Easyjet look like they're in trouble, maybe they should stop sponsoring football clubs too. Most of the American airline companies are losing money, must be spending too much sponsoring teams.
 
aguero93:20 said:
Ryanair and Easyjet look like they're in trouble, maybe they should stop sponsoring football clubs too. Most of the American airline companies are losing money, must be spending too much sponsoring teams.
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Exactly, mate.

Woolworths went bust, but it wasn’t because not enough people had heard of the brand!
 
Shaelumstash said:
Exactly, mate.

Woolworths went bust, but it wasn’t because not enough people had heard of the brand!
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No, it was because their industry was weakening and their business model wasn't sharp enough.

On that note, something I am actually ITK on, the entire airline industry is in trouble along with Boeing and Airbus, they've been running an unsustainable model for years and the chickens are coming home to roost.
 
aguero93:20 said:
On that note, something I am actually ITK on, the entire airline industry is in trouble along with Boeing and Airbus, they've been running an unsustainable model for years and the chickens are coming home to roost.
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Yes you're correct - Air New Zealand claim to be the "Number 1 airline of 2018" but on our recent full-service flights between Auckland and Vancouver (13 hour overnight flights) we didn't get any printed menus, or amenities packs (toothbrush, socks, eye shades). The paper towels in the loos were like tissue paper, and try cutting meat with plastic knives. A couple of years ago, menus, amenity packs and proper cutlery were the norm. If that is Number 1, I'd hate to travel on an airline like Aeroflot.
 
aguero93:20 said:
No, it was because their industry was weakening and their business model wasn't sharp enough.

On that note, something I am actually ITK on, the entire airline industry is in trouble along with Boeing and Airbus, they've been running an unsustainable model for years and the chickens are coming home to roost.
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Well you know why one certain poster is banging his drum as you say.

City have been a superb partner for Etihad.
 
TCIB said:
It is these comments that will have you bang to rights when the Irish terminators come for you financial fuckers. You will be liquidated, get it, liqui.... i'll get me coat.
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Your way with words makes me wish I had had the same courage when accountancy rationale confronted me in yesteryear.

Thanks for this interlude G..
 
As a few have said - the whole airline industry is in trouble. Airlines and Banks seem to be two industries that get closely aligned to national identity and as a result have lagged behind in the cross border consolidation that has gone on elsewhere. Often airlines carry the national flag or a national identity and have been reluctant to give this up - and are often propped up by government subsidies and preferential treatment at home airports - Alitalia being a prime example. At the end of the day there is limited differences between airlines - they all fly Airbus or Boeing aircraft between major cities but spend a fortune on brand identity trying to convince us they are different. They are not. Air travel was once seen as glamorous but unless you fly business or first class it’s little better than the train or the coach. The whole industry is oversubscribed- too many airlines in all sectors - too many low cost flyers, too many flag carriers, too many charter airlines. It’s ripe for consolidation but countries want to keep their flag carrier and people still tend to like flying with an airline from their country. There will be a consolidation of UAE airlines at some point and `Etihad will be part of that but it’s unlikely that they will be able to continue alone indefinitely.
 
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