City Football Group, the company that owns the Manchester City football team of the UK Premier League as well as New York City FC of Major League Soccer, is in talks to buy the French team ESTAC Troyes, according to a report by The Financial Times.
Troyes currently plays in France’s Ligue 2, or second division, but has been in contention for promotion to Ligue 1, the top flight, for the past few seasons. CFG is reportedly offering a “low single-digit million” price for the equipment, the sources told the newspaper.
The agreement is just the latest example of CFG’s effort to build a global stable of professional soccer franchises. In addition to Man City and NYC FC, the company now owns Lommel SK, which plays in Belgium’s second division, Sichuan Jiuniu in China’s second league, and Mumbai FC in India. It has a large minority stake in the Spanish club Girona FC and investments in Uruguay’s Montevideo City Torque and Japan’s Yokohama F. Marinos. It also owns the Australian soccer team Melbourne FC and several women’s teams, including Manchester City Women and Melbourne City Women.
Like any roll-up game, CFG has sold its acquisition strategy as partly about economies of scale and distribution: while it insists it wants each club to be profitable independently, the company is seeking marketing deals across the board. your wallet. He also hopes to gain new fans for his main team, Manchester City, in emerging markets such as India and China, opening up new opportunities for sponsorships and merchandise sales.
An admirer of Disney and its business model, Ferran Soriano, CEO of CFG, has also spoken about consolidating back-office functions and technology platforms across all of his teams. He has said that owning a stable of clubs allows CFG to better detect and develop talent, both in terms of players and coaches and managerial staff, and has spoken of the entire CFG team learning the same attacking style of play based in possession that Manchester City have adopted their current coach Pep Guardiola.
The sheikh bankrolling the clubs
Soccer’s “roll-up” strategy has proved controversial, with some accusing CFG of participating in it largely to circumvent the league’s spending limits, but it has attracted support from some major investors. Last year, US private equity firm Silver Lake, which paid $ 500 million for a 10% stake in CFG, and in 2015, Chinese investor China Media Capital spent $ 400 million for a 13% stake.
However, the real money behind CFG is still Sheikh Mansour bin Zayed Al Nahyan, a billionaire member of the Abu Dhabi ruling family who also serves as Deputy Prime Minister of the United Arab Emirates.
Then, in February, the Union of European Football Associations (UEFA), Europe’s governing body for sport, imposed a two-season ban on City’s participation in Champions League competition, as well as a fine of 35 millions of dollars after the German magazine Der Spiegel published leaked emails. suggesting that the club had artificially inflated the value of a sponsorship deal with Abu Dhabi-based Ethihad Airlines, using the airline as a conduit for money that Sheikh Mansour actually provides through another company that he controls. But Man City appealed the ban, and last month the Swiss Court of Arbitration for Sport ruled in favor of the club, overturning it.
A much emulated business model
Whatever the real intent of CFG’s strategy, other investors in world football are beginning to emulate its business structure, which is known as the MCO or multi-club ownership model.
The wealthy Italian Pozzo family now owns the Italian Udinese Calcio and Watford FC of the English Championship League, and once also owned Granada CF, before selling it to Chinese businessman Jiang Lizhang.
Red Bull, the energy drink company, bought a portfolio of soccer clubs in the United States, Austria, Germany and Brazil. The Spanish team Atlético de Madrid bought the Mexican soccer team Atlético San Luis and also owned a team in the Indian soccer league for a time. AS Monaco bought the struggling Belgian Cercle Brugge in 2017, while King Power International, which owns the English Premier League’s Leceister City, bought the Belgian team OH-Leuven in 2016. OH-Leuven then hired the former Leceister City manager Nigel Pearson to run the club and Leceister City have used Leuven to sign talented young players that they may one day wish to acquire, which could lower the transfer fees the club will eventually have to pay.
