Take a look at the logo on the jerseys in this photo.
They’re Manchester City FC, one of the largest and richest soccer teams at the top flight of English soccer, which is the most watched sports league in the entire world. City won the Premiere League last year and are in second place this year. City is a giant team and has a habit of splashing the cash to buy its players after other teams have developed them. Four of the league’s top 10 highest-paid players are on City’s roster.
Before your eyes glaze over, no, this post won’t be about soccer. Most Americans hate it, so I hardly ever write about it though I could write this page off about soccer if I felt like it. Did you see that Real Madrid-Borussia Dortmund match yesterday? I won’t do that to you.
This post is about where the money to put that logo on those jerseys ultimately came from.
The logo belongs to Etihad Airline. Etihad is one of two state-owned airlines belonging to the United Arab Emirates. The other is Emirates Airline. Like Etihad, Emirates is a major player in European soccer. Currently two of Europe’s giants, Arsenal in London (disclosure: I’m a Gooner) and Paris Saint-Germain in France, have Emirates as their major sponsor. Arsenal’s state-of-the-art stadium is named after the airline, as is Manchester City’s named after Etihad.
Etihad paid Manchester City a whopping 400 million British pounds to put their name on the team, about $600 to $700 million US dollars depending on how many the Fed decided to print today. Emirates paid Arsenal $239 million for its sponsorship, and PSG just inked a new deal with Emirates for an undisclosed sum known to be in the millions. They just bought David Beckham among several huge and expensive player buys like mercenary Zlatan Ibrahimovic. Along the way, Emirates also inked deals with soccer’s Chelsea FC (another London giant, currently in third place in the EPL ahead of Arsenal in fourth), tennis, and huge new deal with F1 racing for 172 million pounds. Per year.
The point: Neither of these airlines are hurting for cash. At all. They could buy a medium-sized US state if they felt like it. They’re owned by a government that lives atop an ocean of oil, and they’re rich enough to throw hundreds of millions of dollars into naming stadiums, plastering their logos on shirts, and sponsoring sporting events all over the world, but mostly well outside the United States. These airlines buy a few Boeings along with a lot of Airbus planes, and barely generate any commerce within the US. In fact they actually compete with US airlines that fly direct to the UAE.
But you’re helping pay for Etihad and Emirates to sponsor sports. Here’s how.
According to Avio News, the US Export-Import Bank is providing both airlines — which are state-owned by oil sheiks, remember — over $1 billion in loan guarantees.
The US agency supported significant investment in the Middle East, another area with a very strong growth in the sector: overall Emirates and Etihad Airways received guarantees for 615.9 and 593 million dollars respectively.
US taxpayers back those guarantees. Aren’t you happy to know that you’re ultimately standing behind making millionaires of men who play a sport that, as an American, you probably hate?
Delta, for one US airline, isn’t happy about the sponsorships, I mean loan guarantees. Delta wrote a letter to Congress in February, stating that the Ex-Im Bank’s cozy relationship with overseas airlines costs the US airline industry up to 7,500 jobs and $684 million per year.
Why, that’s almost as much as Etihad and Emirates pays to stick their names on soccer jerseys and make weasels like Samir Nasri rich beyond their work ethics.
Later in the week I’ll have a bit more about the Ex-Im Bank’s habit of sending our dollars, and jobs, to overseas companies.