The Evolution of the City Football Group
Manchester City are part of the City Football Group – one of a number of football clubs dotted around the world who exist under the same umbrella. This is a deliberate strategy designed by Ferran Soriano, Chief Executive following the takeover of Manchester City by the Abu Dhabi Group back in 2008.
Soriano was employed by Manchester City in 2012 following a successful career in senior positions across a variety of large companies. His previous roles including 5 years as Vice President of Barcelona Football Club where he was part of a Senior Management Team which included Txiki Birgiristan whilst Pep Guardiola was head coach.
Soriano pitched an idea to the new owners of Manchester City of a group of Clubs across the World who would share the same ideology about the way in which the game should be played, who could pool resources in player acquisition and management skills and develop cross brand marketing strategies to rapidly expand the growth of the parent club – Manchester City.
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From this point onwards the City Football Group (CFG) have sought to find new clubs who could be part of the group. One of the initial core elements of the strategy was the idea of having a club part of the group present in every possible continental market.
Currently the CFG comprises the following football Clubs:
- Manchester City (includes EDS and Man City Women)
- Melbourne City (includes Youth and Women’s teams)
- Club Atletico Torque (Uruguayan Premier League Side)
And has part ownership of several more clubs:
- New York City 80%
- Girona FC 44% (includes Girona C)
- Yokohama F Marinos 20% (Japanese team owned in partnership with Nissan)
CFG and China
The CFG have been developing strong links with China for a number of years. This culminated in a massive investment in CFG in 2014 of £265 million by 2 Chinese Companies. At that time it was expected the continued relationship between CFG and China would lead to the acquisition of a Chinese Club. This move did not materialise though, partly due to the massive inflation present in the Chinese Football Market. CFG simply seemed to view the investment as not profitable at the time, although it was noted the massive investment in CFG by China Media Capital and CITIC Capital valued the CFG group at over £2 billion back in 2014.
Chinese President Xi Jinping is a reported football fan and many City fans may recall he recently visited the Etihad Stadium and posed for pictures with Sergio Aguero, Manchester City’s all time leading goalscorer. These continued close links between CFG and China have been important in creating the conditions for investment in China.
The Chinese Super League went through a period of massive growth as wealthy owners sought to create interest by attracting overseas players and managers at an often inflated cost. This spending was uncontrolled and contributed to a wider inflation in player costs across all football markets. Acknowledging this inflationary pressure was unsustainable the Chinese government intervened and in the last year there have been limits imposed on spending. It is this restraint which has reopened the potential of China to the CFG investment.
In recent months there have been continued close links with China and the CFG have opened a second office in China. The benefits of a Chinese club within the CFG would be potentially considerable. There may be a doorway opened to future Chinese sponsorship across the CFG group which may expose Manchester City to the Worlds largest economy and fastest growing market. The investment and revenue options may afford Manchester City and the CFG with the opportunity to make significant progress to overhaul the current richest football clubs in the world.
Speculation currently mounts as there is believed to be an imminent announcement from Manchester City regarding the identity of their new Chinese club. Given City recently opened an office in Shenzhen, this was quickly seized upon by fans who believed this was to be the new club announcement. However, club insiders have suggested this will not be the case and the new club will not be based in Shenzhen, Shanghai or Beijing but will instead be based in a smaller City.
There continues to remain an ambition by CFG to invest further and rumours persist regarding potential investment in both India and Africa.
It is hoped that in the coming days the City Football Group successes on the pitch will have the opportunity to be witnessed in China and the CFG will again occupy the pages of the Financial papers as their step towards world domination gathers pace. Rather than getting bored with the project in Manchester the CFG seem consumed with becoming the major force in World Football. No doubt as this becomes closer to reality, there will be increasing concerns expressed by other interested parties who may seek to limit the growth. Welcome to Financial Fair Play 3 everyone, no doubt coming soon in 2020.