Manchester City’s lease at the Etihad Stadium was placed under review in August amid a major expansion of the club’s east Manchester campus.
City has a long-term lease at the ground with Manchester City Council and finished expanding its north stand earlier this year, which has increased the stadium capacity to more than 60,000 people.
The club has been building a new £300m entertainment zone known as Medlock Square where there is a Radisson Blu Hotel on the campus grounds, as well as more food and drinks spaces and a zip-line. There are also plans for a new 600-person capacity entertainment venue which was granted planning permission by Manchester City Council in June.
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But it is understood a lease review was sparked as a result of changes taking place around the Etihad Campus as it continues to grow into a major visitor destination.
Council papers describing a decision about a ‘variation of leases with Manchester City Football Club’ have been made public on the town hall’s website as part of the process, but specifics of the finances have been kept hidden from view.
The review is expected to result in an uplift in the yearly base rate fee paid to Manchester council from the club, which is currently said to be between £3m to £4m a year. The council is also understood to pocket extra fees from the club related to income generated from the campus, adding to the cash it makes from the deal.
Changes to the lease were put forward in light of the club being expected to generate more money from its operations at the Etihad Campus. The land around the Etihad Stadium has been transformed since the club first moved to the ground, with City having grown into a global footballing powerhouse over the last two decades.
Insiders at the council have said the relationship between the town hall and club ‘has changed’ from what it was in previous years.
Former long serving council boss Sir Richard Leese and the council’s late chief executive Sir Howard Bernstein are said by a source to have ‘monopolised’ relations between the town hall and Man City at one point in time, in an era which overlapped with key moments from the club’s move from its previous home at Maine Road to the Etihad Stadium in the early 2000s.
It has been argued that Man City’s move to its current home in east Manchester helped put the club on the radar of its current owners – with the side playing at a base surrounded by land which had potential for further development.
But today there is reportedly a ‘different’ type of relationship between the two organisations according to sources, who said there is a ‘professional business-like’ approach to dealings, described as being on a formal ‘working’ basis. The council’s decision to review the lease with City was published on August 25 and became effective from September 3.
Council notice papers stated that the decision was to ‘approve the council entering into the variation of leases with Manchester City Football Club to enable the north stand expansion of the Etihad Stadium.’
It added: “The decision supports the shared objectives of the party within the Eastlands regeneration framework, developing Sport City as a world class sport and entertainment district.
“A failure to agree to the variation would impact upon the football club’s ability to continue to grow as a global brand. This failure would likely cause significant reputational damage to the council in its capacity as custodians of the stadium.”
More details from the changes are expected to be shared in future public reports from the town hall.
Manchester City declined to comment.
