Chinese Consortium invests $400m in CFG

We might get a kick in weibo followers (doesn't seem to have been much of one yet though) but honestly the ramifications of this deal will likely only be felt in Manchester in a decade or more. This deal is going to take a while to get going in the first place, and when it does it's primarily going to be about City investing in China, not about China investing in City.

As NYCFC and Melbourne City have shown, it will take several years to build up a winning team in China, and after that happens we will have to wait for the drip effect to take place as the chinese slowly get interested in football (if we are being honest, it's not going to be a short term thing) and then many of them to (hopefully) opt for the CFG Chinese team over others. Even accounting for the reputation of Asian fans as inveterate glory hunters it's unlikely that those who support whichever team we buy (not convinced it would work to found a brand new team in a non-franchised league) will likely not adopt City as their second team in their swathes as they will already have second teams who are probably one of our direct rivals already. In all honesty we will be waiting for the next generation of Chinese football fans to come into the sport before we see any real effects.

Even then, I think people are greatly exaggerating the potential financial ramifications for City. Foreign fans don't tend to bring in a half of the money people claim they do - the reason the scum and Real etc make so much money is at the end of the day their sponsorships not their merchandising. While they both do make a lot of money off merchandising too, I think you'll find it's still heavily weighted towards their home markets. Merch in Asia might be worth £10m or even £20m a season, but at the end of the day that only buys 1/3 of a player these days; it's not going to revamp our finances.

The real money for us is going to come in when China suddenly gets willing to shell out billions a year on Premier League TV rights - which obviously will benefit every club in the league, not just us - and when Chinese companies follow this trend and line up far bigger sponsorship deals than we see right now. The thing is, if China does commit to football in this way, the CFG Chinese team will benefit from the increased TV revenues and sponsorships more than we will, as it will actually be based in the target market for those companies - same as British TV companies will never pay higher rates for foreign football than for its own product.

Thanks for taking the time to post that

In that case though why is everyone getting so excited? It seems hard to see why everyone is getting so excited if it's going to take decades to come to fruition. Is it because our sponsorship deals will increase? Or is it just because if and when the effects do start kicking in it will have such a big impact?
 
I think we'll see an impact within a year. Not from huge spike in supporter numbers, but from top level Chinese sponsors and corporates jumping on board.
 
Just done a little digging on the Chinese Super League and it seems a few of the teams are actually named after their owners, often big Multinational companies. Others like Shanghai Shenhua have the brand name of their owners on the badge. SO I don't think there is going to be any major opposition if we bought an existing club and renamed them "City".

I also discovered that CITIC who make up part of the consortium that invested in us own a club in Beijing called Beijing Guoan FC. They appear to be the only team based in Beijing (population 11milion plus) and have a 65k seater stadium.

There are 2 top flight teams currently based in Shanghai (population 25m plus) so there's plenty of room for another if we wanted to start a Shanghai City FC from scratch.
 
Thanks for taking the time to post that

In that case though why is everyone getting so excited? It seems hard to see why everyone is getting so excited if it's going to take decades to come to fruition. Is it because our sponsorship deals will increase? Or is it just because if and when the effects do start kicking in it will have such a big impact?

Same reason why everyone always predicts we'll win the league each season, why many think Paddy Vieira is destined to be one of City's greatest managers and why we all say that the scum will end up in our shadow instead, and yet if you go to the forum of any of our rivals you'll see pretty much the same thing but with the names changed. Each and every one of these things could happen but there is no guarantees they will. Football fans are predisposed to only ever view things in one of two ways - an unshakeable belief that your team is destined for greatness which only waivers when the events simply fail to happen, or a crippling pessimism in your team's ability to compete on any level. Because we have been spoiled by success, people now naturally see only the very best possible scenarios for City.

Five years ago we were predicting that we'd have won the CL, be racking up domestic trophies and would be so far away from all other challengers that we'd annually be winning the league by at least 10-15 points. Admittedly FFPR was a major part in holding us back, but FFPR is not responsible for the way we have always been so consistently inconsistent on the pitch. We could've won any of the last four seasons (the fact that we actually did win two of them is demonstration in action) but the reason we didn't was mainly our ability to go off the boil and drop points against easy sides, not to mention the way we seem to lose focus after winning a trophy. They (particularly the former) have never once looked like something we would stop doing so far. Come next July, though, I guarantee that vast swathes of this forum will be predicting we will win the league yet again, however. It's just in our genes to be insanely optimistic.

I think we'll see an impact within a year. Not from huge spike in supporter numbers, but from top level Chinese sponsors and corporates jumping on board.

Oh, I agree that we'll see "an impact". Maybe an extra £5-10m in regional partnership deals. Just nothing that is going to change our fortunes around overnight. For that, we need to not only invest in the Chinese market but to have conquered it (emphasis on the past tense).
 
Even then, I think people are greatly exaggerating the potential financial ramifications for City. Foreign fans don't tend to bring in a half of the money people claim they do - the reason the scum and Real etc make so much money is at the end of the day their sponsorships not their merchandising.

I think this sentence is a bit of a contradiction in terms mate. I don't think this deal is good for City in terms of selling shirts, I don't think it's going to make much difference to that whatsoever. But in sponsorship terms terms, this is an absolute game changer. The financial ramifications for City will be absolutely huge.

Both parties are going to win off this deal. CMC get City's expertise in running a world class football club. If we do launch a Chinese "City" branded club, I would expect the ownership of it will be at least 35% Chinese owned. They will then benefit from our expertise and scouting contacts etc.

In return the media empire that is CMC will surely give City favourable coverage on their network of print, digital, TV, Social media and possibly even movie enterprises. With a marker of 1.2billion people, it doesn't really matter how many of them are "fans", it's about the media exposure. When Etihad and Nike come to renew their deals, we're now on a completely different scale. The Multinationals will be queuing up to sponsor us. How many big companies DON'T want exposure in China? Not many!

It would be great if we attract millions of new fans, but as you say, that can take time. But the real value in this deal is not the new fans we can generate, it's the exposure we can give our sponsors. That's why this deal is a game changer.
 
Same reason why everyone always predicts we'll win the league each season, why many think Paddy Vieira is destined to be one of City's greatest managers and why we all say that the scum will end up in our shadow instead, and yet if you go to the forum of any of our rivals you'll see pretty much the same thing but with the names changed. Each and every one of these things could happen but there is no guarantees they will. Football fans are predisposed to only ever view things in one of two ways - an unshakeable belief that your team is destined for greatness which only waivers when the events simply fail to happen, or a crippling pessimism in your team's ability to compete on any level. Because we have been spoiled by success, people now naturally see only the very best possible scenarios for City.

It can't be the same reason though as neutral reporters without allegiance to City are saying that this is big. In Martin Samuel's words "the latest development at Manchester City is not about buying Lionel Messi or even attracting Pep Guardiola. It is bigger than that. Seriously. Much bigger. This is the game changer." He's not the only one coming out with things like that
 
I also discovered that CITIC who make up part of the consortium that invested in us own a club in Beijing called Beijing Guoan FC. They appear to be the only team based in Beijing (population 11milion plus) and have a 65k seater stadium.

There are 2 top flight teams currently based in Shanghai (population 25m plus) so there's plenty of room for another if we wanted to start a Shanghai City FC from scratch.

There have been rumours around on the internet that we'd be buying out Beijing Guoan FC. For the record, I think we'd need to buy it as opposed to simply declaring it part of CFG because even though CITIC have been willing to invest in CFG, I doubt they'd simply hand over control of their team which they currently majority own to a company which a consortium which they are the secondary partner in only holds a minor stake in. Furthermore, CITIC only owns the majority of BJFC, so they couldn't hand over control without consulting the other shareholders, who are unlikely to be in favour since they do not have an stake in CFG whatsoever. I can't see this working unless we actively bought their club (or a controlling interest in it) off them - which in turn requires significant time to be invested in sale discussions.

As for founding a new club it is of course a possibility but I don't see it. Unlike MLS and the A-League, the Chinese Super League is not a franchise-model league. It has promotion and relegation and in fact their league system extends down to amateur level. In order for CFG to create a new club they would have to persuade one of the leagues to either expand to have an odd number of teams (and considering that every level of Chinese football above amateur exists on 16-club leagues, this seems unlikely) or to forcibly relegate a club to fit us in, which would be hugely controversial. In just the same way that people say that Rangers and Celtic would have to start from Conference level and work their way up, we would have to do the same with a brand new club, and I can't see CFG going for that idea.
 
So liverpool went on that expo trip to China, their biggest selling points were the football and, of course, the Beatles.

They knew of the football team, not of the past successes, and, preferred Oasis the dippers went mad ha ha

Liverpool, the city that's addicted to thieving & grieving
 
So really acquiring an existing club is the only true alternative. Having experienced exactly that in Melbourne CFG have now hopefully understood what goes into that.

What's now important they must now choose a truly mediocre bumbling club to continue the tradition.
 
I think this sentence is a bit of a contradiction in terms mate. I don't think this deal is good for City in terms of selling shirts, I don't think it's going to make much difference to that whatsoever. But in sponsorship terms terms, this is an absolute game changer. The financial ramifications for City will be absolutely huge.

Both parties are going to win off this deal. CMC get City's expertise in running a world class football club. If we do launch a Chinese "City" branded club, I would expect the ownership of it will be at least 35% Chinese owned. They will then benefit from our expertise and scouting contacts etc.

In return the media empire that is CMC will surely give City favourable coverage on their network of print, digital, TV, Social media and possibly even movie enterprises. With a marker of 1.2billion people, it doesn't really matter how many of them are "fans", it's about the media exposure. When Etihad and Nike come to renew their deals, we're now on a completely different scale. The Multinationals will be queuing up to sponsor us. How many big companies DON'T want exposure in China? Not many!

It would be great if we attract millions of new fans, but as you say, that can take time. But the real value in this deal is not the new fans we can generate, it's the exposure we can give our sponsors. That's why this deal is a game changer.

Yes but I think you're overestimating it all. Sure, I agree that CMC will give City some extra coverage, but how much do you think they'll really give them? I know it's China but I can't see them, say, running PL highlight programs where the City game gets half of the running order and all the rest fight for scraps. Similarly, they aren't going to suddenly start producing tons of MCFC programming because there's not enough audience for it right now. The CMC chiefs are not going to suddenly lose their business acumen just because they signed a deal with us - they are still going to recognise that the way you make money is buy tailoring your content around what your audience are actually interested in. If you ram something down their throats they simply respond by not watching it. This can do wonders for us, yes, but not in an immediate way. Chinese football, and therefore Chinese football programming on TV, needs to build up in the same way that the Premier League TV revenue did not reach the level it is currently at within a single season of the league's inception.

As for other companies wanting to sign on in order to access the Chinese market - yes, and no. For sure there will be more interest, but do you really think that the average discerning Chinese fan is going to even notice that we have a new partnership with Virgin trains or Malmaison or Bet365 or whoever? The only real sponsorships we can sell which will be truly valuable will be the kit manufacturing deal and the shirt sponsorship. The kit manufacturing deal, however, is complex and wrapped up in the fact that manufacturers have very specific ideas of what they think the commercial value of clubs are. We are definitely lagging behind and due a decent step up, and even before this deal I thought the rumoured increase to £12m under Nike was underselling us, but I suspect that even after this deal Nike and other brands will be waiting for us to realise our potential at least in part. By all means call me out on this when I'm wrong, because I will be happy to be proven wrong, but I suspect that our next kit deal will still not be for more than £20m - maybe £25m at an absolute push but I reckon it will be sub-£20m simply because the manufacturers are snobs and have not warmed to our potential yet. Even £25m will still put us below the scum, Chelsea, Arsenal and only on a level with Liverpool though.

It can't be the same reason though as neutral reporters without allegiance to City are saying that this is big. In Martin Samuel's words "the latest development at Manchester City is not about buying Lionel Messi or even attracting Pep Guardiola. It is bigger than that. Seriously. Much bigger. This is the game changer." He's not the only one coming out with things like that

It is big. I never said it wasn't big. You're jumping to conclusions about when it will truly become big, though. I've read the majority of those articles, and aside from that they seemed to be waiting for Martin Samuel's lead to jump on the bandwagon, the articles worth the most time of day were the ones which talked about this being so big as it helps facilitate China's attempt at leaping to the top of the footballing pile and ultimately winning a World Cup. How quickly do you expect that to happen? It's not going to be in the next five years, I'll tell you that. At an optimistic rate, I'd say the Chinese can pull it off in perhaps 20 years' time, once they have had a chance to bring an entire generation through new style academies and then inculcate into those players a sense of tradition and belonging, and then use those players to bring through the next generation - the ones born believing it is their destiny to win the WC. But throughout the whole period, China will be slowly growing in football prowess. It won't just be terrible-terrible-terrible-terrible-BOOM wins the World Cup. Their football will naturally progressively get better. In the same way, this is huge for us, but we will have to slowly work our way up to the point when we truly capitalise in a serious way.

We are ideally positioned to benefit from this as the CFG model lets us focus on a worldwide network of development, success and fan growth, but it's going to take time before CFG fans outside of Manchester are willing to support the rest of CFG. Only when that happens will it truly allow us to benefit in a big, big way because only then will those fans combined with the local first-generation fans create a big enough demographic which A - buys merchandise in large quantities and more importantly B - has enough spending power to persuade big companies in those countries to chase the money by splashing out on big CFG sponsorships. No other team is placed to follow us right now because no other team really is willing to take the resources away from their home base to focus on foreign growth, so we should at the very least have a huge headstart if not total monopoly on this sort of endeavour when it truly starts paying off, but simply put this is not going to happen overnight.
 
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Yes but I think you're overestimating it all. Sure, I agree that CMC will give City some extra coverage, but how much do you think they'll really give them? I know it's China but I can't see them, say, running PL highlight programs where the City game gets half of the running order and all the rest fight for scraps. Similarly, they aren't going to suddenly start producing tons of MCFC programming because there's not enough audience for it right now. The CMC chiefs are not going to suddenly lose their business acumen just because they signed a deal with us - they are still going to recognise that the way you make money is buy tailoring your content around what your audience are actually interested in. If you ram something down their throats they simply respond by not watching it. This can do wonders for us, yes, but not in an immediate way. Chinese football, and therefore Chinese football programming on TV, needs to build up in the same way that the Premier League TV revenue did not reach the level it is currently at within a single season of the league's inception.

As for other companies wanting to sign on in order to access the Chinese market - yes, and no. For sure there will be more interest, but do you really think that the average discerning Chinese fan is going to even notice that we have a new partnership with Virgin trains or Malmaison or Bet365 or whoever? The only real sponsorships we can sell which will be truly valuable will be the kit manufacturing deal and the shirt sponsorship. The kit manufacturing deal, however, is complex and wrapped up in the fact that manufacturers have very specific ideas of what they think the commercial value of clubs are. We are definitely lagging behind and due a decent step up, and even before this deal I thought the rumoured increase to £12m under Nike was underselling us, but I suspect that even after this deal Nike and other brands will be waiting for us to realise our potential at least in part. By all means call me out on this when I'm wrong, because I will be happy to be proven wrong, but I suspect that our next kit deal will still not be for more than £20m - maybe £25m at an absolute push but I reckon it will be sub-£20m simply because the manufacturers are snobs and have not warmed to our potential yet. Even £25m will still put us below the scum, Chelsea, Arsenal and only on a level with Liverpool though.



It is big. I never said it wasn't big. You're jumping to conclusions about when it will truly become big, though. I've read the majority of those articles, and aside from that they seemed to be waiting for Martin Samuel's lead to jump on the bandwagon, the articles worth the most time of day were the ones which talked about this being so big as it helps facilitate China's attempt at leaping to the top of the footballing pile and ultimately winning a World Cup. How quickly do you expect that to happen? It's not going to be in the next five years, I'll tell you that. At an optimistic rate, I'd say the Chinese can pull it off in perhaps 20 years' time, once they have had a chance to bring an entire generation through new style academies and then inculcate into those players a sense of tradition and belonging, and then use those players to bring through the next generation - the ones born believing it is their destiny to win the WC. But throughout the whole period, China will be slowly growing in football prowess. It won't just be terrible-terrible-terrible-terrible-BOOM wins the World Cup. Their football will naturally progressively get better. In the same way, this is huge for us, but we will have to slowly work our way up to the point when we truly capitalise in a serious way.

We are ideally positioned to benefit from this as the CFG model lets us focus on a worldwide network of development, success and fan growth, but it's going to take time before CFG fans outside of Manchester are willing to support the rest of CFG. Only when that happens will it truly allow us to benefit in a big, big way because only then will those fans combined with the local first-generation fans create a big enough demographic which A - buys merchandise in large quantities and more importantly B - has enough spending power to persuade big companies in those countries to chase the money by splashing out on big CFG sponsorships. No other team is placed to follow us right now because no other team really is willing to take the resources away from their home base to focus on foreign growth, so we should at the very least have a huge headstart if not total monopoly on this sort of endeavour when it truly starts paying off, but simply put this is not going to happen overnight.

I think you're seriously underestimating the importance of the deal. We'll see a significant increase in revenue fairly quickly, not through merchandise sales over there but via a raft of commercial deals with Chinese companies. Expect some big sponsorships to be announced in 2016.
 
I think you're seriously underestimating the importance of the deal. We'll see a significant increase in revenue fairly quickly, not through merchandise sales over there but via a raft of commercial deals with Chinese companies. Expect some big sponsorships to be announced in 2016.

This is the way I see it, mate. I think we've opened up an extremely lucrative market, and we'll reap the rewards for years to come.
 
I think you're seriously underestimating the importance of the deal. We'll see a significant increase in revenue fairly quickly, not through merchandise sales over there but via a raft of commercial deals with Chinese companies. Expect some big sponsorships to be announced in 2016.

have you heard of anything in the pipeline from your source Ric?
 
This is the way I see it, mate. I think we've opened up an extremely lucrative market, and we'll reap the rewards for years to come.

Same here. I reckon the work we've been doing for the last couple of years to catch and then surpass our rivals in terms of commercial revenue will look silly in 1-2 years. Expanding into China will see us go leagues above the others I reckon, making any money we've made before look like a pittance.
 
I wonder if we'll fuck Nike off and bring in someone like Li Ling. The Nike deal is bobbins, I doubt it would cost much to get out of it.
The company has aggressively used sponsorship deals, particularly with athletes and sports teams, both in China and abroad, to raise its profile
 
I wonder if we'll fuck Nike off and bring in someone like Li Ling. The Nike deal is bobbins, I doubt it would cost much to get out of it.

Never even thought about a Chinese Sponsor. I'd imagine with the deal now we could get something along the lines of the rags Adidas deal, especially with the emergence of power and wealth over in China.
 

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