Just what are Man City getting for that $500m New York shopping trip?

By Paul Collins

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Manchester City have no prospect of making a profit in the foreseeable future on their $500million-plus investment in their New York ‘sister club’ in Major League Soccer.

And with the revelation that the New York Yankees became involved in talks to be financial stakeholders in New York City FC only in the past fortnight, questions are being asked about just why City have bought into football in America.

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City slickers: The Premier League runners-up have been in the USA this week

City slickers: The Premier League runners-up have been in the USA this week

Partnership: City have reached an agreement with the New York Yankees

Partnership: City have reached an agreement with the New York Yankees

New York Times sports business reporter Ken Belson, who revealed the Yankees’ purchase of a quarter share in NYCFC for just $25m, believes City need the Yankees more than vice-versa — hence the relatively low investment by the baseball giants.

What the Yankees will give City is access to their political connections, especially as they search for a site for a $300m stadium.

Belson said: ‘You won’t get a better politically connected and more sport-savvy organisation than the Yankees. When senior officials need to make the case for things to happen for NYCFC, it won’t be City people doing it. The Yankees have very good connections at City Hall.’

Last week Manchester City’s chief executive, Ferran Soriano, outlined how he hopes to transform them into global football and commercial rivals to Manchester United.

But huge start-up costs and a US football business environment that is not the cash cow it is sometimes painted means it could be decades before there is any profit from  the project.

Vision: City chief executive Ferran Soriano (right) with former City midfielder and NYCFC director of football Claudio Reyna

Vision: City chief executive Ferran Soriano (right) with former City midfielder and NYCFC director of football Claudio Reyna

City will pay $100m merely for NYCFC to join the league and start playing in 2015. A further $300m, and probably more, will be spent on a new stadium, although there is no definite location yet, and problems with potential sites.

Other set-up costs, wages and fees will take the outlay past $500m (330m) before a ball is kicked in  a permanent home.

Anyone thinking the US will be an instant merchandise-seller’s heaven for City should think again. New York already has one ailing MLS team — the Red Bulls, with an average attendance of just 16,021, despite stars including Thierry Henry, and a relatively high wage bill that dents profitability.

‘MLS is filled with money-losing teams,’ said Belson, although he still believes the Yankees can only win from their bargain quarter ownership. The Yankees, who will not be expected to share any further investment burden for the new club, own the Legends Hospitality firm that already has contracts at City’s Etihad Stadium in Manchester and will run the catering concessions at NYCFC stadium, earning millions in profit.

‘They will also get football content for their [sports TV] network,’ he added. ‘They get a partner in Europe. They get media exposure. There may also be value if they can sell out their stake in  a few years for profit.’

Claudio Reyna, the former Manchester City captain who has been appointed NYCFC director of football, says the new club will not be able to use City’s stars.

Long-term project: City are not expecting to make a quick profit from their American adventure

Long-term project: City are not expecting to make a quick profit from their American adventure

‘Obviously City will be focused on winning the Premier League and the Champions League, so they won’t be offering us their top players,’ said Reyna. ‘But we can use their promising youngsters for our team and also to help develop them for City. Also we’ll be using City’s scouting system so that when they are looking for a left-back in Serie A or the Bundesliga they could also see someone suitable for us. We will be tapping into all City’s resources.’

Former New York Cosmos coach Eddie Firmani thinks City will be attractive to New York for the money they will inject, not make.

‘It’s good for soccer in America that Sheik Mansour wants to spend his fortune here. Having people with no money running clubs is  a problem. People with deep pockets will help a new team get off to the right start — and Mansour has deep pockets.’

Firmani, who spent years coaching in the Middle East, says he is not sure how NYCFC will help City as a club. ‘It’s not as if NYCFC can be a farm team for City. And it can’t be about making money quickly. Mansour could spend a billion dollars here. But that’s peanuts to him and it should be great for the league.’

Belson sees ‘a whole political dimension’ to the Abu Dhabi move into New York sport, with investors from the Middle East looking to be smart, savvy, friendly businessmen. ‘After the World Trade Centre,’ he said, ‘Arab businessmen didn’t always get the benefit of the doubt.’

VIDEO: Watch City's stars train from their point of view

 
 


The comments below have not been moderated.

So the Sheik won't make a profit then! No change there. just another way to brag to his friends.

Click to rate     Rating   11

Go on just this once I will respond to a united troll , I am from Manchester though now I live in Cornwall and despite what some people think that's still the same country.

Click to rate     Rating   10

Citeh might have more success across the pond, more fans would attend there than the emptyhead on $dollar-a-kid games

Click to rate     Rating   42

If it turns out Etihad and MCFC are actually part of the same company, so the large sponsorship money is just on paper? - Tom Sharp, Manchester, 26/5/2013 17:13 /// The Etihad deal has already been passed, anything else is lip service. PSG's with Qatar will be more under scrutiny since there is a truly direct link rather than "a relation of..." there.

Click to rate     Rating   32

"questions are being asked about just why City have bought into football in America"--------------------- Could one of the questions being asked "would moneybags city, attempt to get around the fair play rules by NYCFC buying expensive players and "selling" them to MCVC for peanuts? I believe UEFA are looking into both City and Chelsea and their sponorship. If it turns out Etihad and MCFC are actually part of the same company, so the large sponsorship money is just on paper?

Click to rate     Rating   24

- John , Minneapolis, United States, 26/5/2013 06:15........... Bit more info for you.""Manchester City will be the majority owner of the new Club. As an investor, the Yankees will be an active member of the ownership group. The New York Yankees and Manchester City Football Club have an existing commercial relationship through Legends Hospitality, LLC, an international entertainment, hospitality and marketing organization""

Click to rate     Rating   23

- John , Minneapolis, United States, 26/5/2013 06:15........... Bit more info for you.""Manchester City will be the majority owner of the new Club. As an investor, the Yankees will be an active member of the ownership group. The New York Yankees and Manchester City Football Club have an existing commercial relationship through Legends Hospitality, LLC, an international entertainment, hospitality and marketing organization""

Click to rate     Rating   11

This doesn't have anything to do with Man City. Just like Mr. Henry and Liverpool/Red Sox the owners will just be owning multiple sports teams. - John, Minneapolis, United States, 26/5/2013 6:15.............Think you're find its man city that own them not His Highness the Great Sheikh Mansour Bin Zayed Al Nahyan, Get you're facts right before opening you're mouth.

Click to rate     Rating   15

Paul Collins The Green-Eyed Monster

Click to rate     Rating   15

Our owner can afford to do whatever he wants that's why he's spending his own money on things he enjoys its simple really who wouldn't if you had billions to spare, maybe even the Glaziers would do the same if they had any money and were not in debt oh sorry its not them in debt its united. - Noah Nuttall , Truro, ........why bring Manchester United into a story solely about city and their possible new venture?...This has nothing to do with Manchester United!.......Massive obsession! Nice to see you 'support your local team'

Click to rate     Rating   13
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