Manchester City: Expanding their empire globally

Manchester City are expanding their global empire

While the blue half of Manchester revels in a second English Premier League trophy in three years, Manchester City F.C.’s top management has moved on from popping champagne bottles and put both eyes on the horizon. The Citizens have been in the news over the past four years for spending lavishly to acquire top players such as Yaya Toure, David Silva and Sergio Aguero. The trio, joined by the likes of talented midfielder Samir Nasri and star defender Vincent Kompany, also led City to its first domestic cup title in almost 40 years.

But transfer budgets are only one segment in the team’s diverse investment strategy. The club is keen on expanding its worldwide presence and has recently purchased a minority stake in a Japanese football team, the Yokohama Marinos. This move adds to its existing ownership of a Melbourne football team and the plans to establish a New York based MLS team. Looking closely, however, one can observe that City’s wealth is not being channeled into football alone. It also owns large tracts of land in and around Manchester and has unveiled large-scale development plans for the same.

Oriental Outlook: City’s Latest Venture

On May 20th 2014, Manchester City F.C. bought a minority stake in Yokohoma F. Marinos from Japanese automaker Nissan Motors. The Marinos, who started out as Nissan’s corporate team, are currently one of the most successful teams in Japan, having won the first division (J-League) title three times and finishing runner up twice.

So how does the deal work out for both parties?

As part of the agreement, the Marinos will get access to City’s training methods, medical care and coaching expertise. City on the other hand hopes the profits of such a deal will help it in fulfilling UEFA’s new financial fair play regulations. One of these rules is that football clubs cannot sustain losses of more than 10 million Euros during a financial year. City have already incurred a 60 million Euro penalty for not following regulations during the past season and hope to break even in the coming year.

Past Portfolio

A similar reasoning was behind City’s takeover of Melbourne Heart in January. Melbourne has a reputation of being Australia’s sporting capital and the increasing fan base of a city with a population of 4 million provided prospects of considerable financial return. It is also widely expected that the team will be renamed Melbourne City, a way of marketing the ‘City’ brand.

At the other end of the world, in New York, Manchester City went one step further last year to set up a brand new soccer team that would play in the MLS from the 2015 season onwards. City are majority (80%) stakeholders in the new team, having joined hands with baseball heavyweights New York Yankees to set up New York City F.C. An ESPN report covering this 100 million venture stated, “It stands as a powerful indicator that in the ongoing football arms race, the thirst for unconventional revenue streams and creative brand exposure will compel major teams to execute ever bolder global strategies.”

Going Beyond Football

Manchester City F.C. own approximately 200 acres of land in east Manchester and hope to use this space to build a new leisure and athletics center. The development project has been dubbed the Etihad Campus, a designation given in view of the 10 year sponsorship agreement between the club and Etihad Airways. Etihad will also open a hub at the Manchester airport, a process that would generate a good number of local jobs.

The Etihad Campus will also feature a multipurpose sports complex to be built over the existing barren wasteland. The complex will house state of the art training facilities, similar to those used at AC Milan's Milanello training ground. Former Arsenal legend Patrick Vieira, currently serving as City’s football development executive, described the efforts behind the massive efforts, “Before designing the facilities they have been to the football world, the basketball world and the NFL world, so a lot of hard work has been done around the project. That is why I believe it is the best project around in all sports."

One might say that Manchester City have been trying to buy the lime light of late, hoping to match the brand value of their local rivals United. City’s owner, Sheikh Mansour is one the wealthiest owners in football, with a personal net worth of 17 billion pounds. Behind this abundant supply of wealth is an equally immense investment strategy that hopes to propel Manchester City to the forefront of the international football scene.