Cash-strapped Verdy thrown financial lifeline

TOKYO, Oct 20 (Reuters) - Cash-strapped former Japanese champions Tokyo Verdy have been thrown a lifeline after signing a sponsorship deal with a sports store chain.

Verdy's five-year deal with Xebio paves the way for the club to continue their business operations in 2011 subject to approval by the J-League.

Verdy, J-League champions in 1993 and 1994, are currently fifth in the second division and pushing for promotion back to the top flight.

The J-League told Reuters on Wednesday that Verdy could receive formal approval after a special board meeting on October 29.

"The board will have to approve Verdy's promotion if they finish inside the top three," the J-League told Reuters. "They will have to meet the J-League's conditions."

Last year Nippon Television Network Corp., which held a 98.8 percent stake in the club, withdrew their financial backing.

"There was no time to wait for a 'white knight' to appear," Verdy President Hideyuki Hanyu told Japan's Nikkan Sports. "After talks with Xebio several companies decided to invest."

The J-League had ordered Verdy to secure sponsorship revenue of at least 540 million yen ($6.62 million) but they failed to do so. Hanyu, however, has outlined an increased budget of 800 million yen.

"If things go to plan we hope to be able to announce a new administration by mid-November," said Hanyu.

Japanese sport has been hit hard by the global financial crisis, which has seen the world's largest carmaker Toyota and Japan's number two manufacturer Honda quit Formula One.

Subaru, Suzuki and Kawasaki have also pulled out of motorsport, while local football, rugby and ice hockey have all felt the economic pinch.