St Helens Blue (Exiled) said:
jonmcity said:
Think its all about making money from global sponsorship deals with clubs in each continent.
Could somebody please explain this and only this.
How do we make money by buying all these different clubs. How does it actually put cash into the MCFC Coffers?
Surely any sponsorship deals for NY City or Melbourne etc will go in their accounts.
It's more about having an international reach. The sponsors that are interested in NYCFC and Melbourne won't necessarily be interested in MCFC and vice versa. The US market and the Australian markets are very specific as is the European market.
Look at Chevy for example and their deal with United. Chevy didn't want to put that money into a New York team because they're trying to grow their brand in Europe and Asia after dominating the US. Manchester United had numerous contacts in the US due to the Glazers business interests there and United's historical focus on the US as a market for growth. So United sold them on the idea that they could have significant visibility in a beloved club and game across Europe and Asia and they negotiated a massive deal based on this.
Look at City's own Etihad deal. When Etihad first paired with City, they were virtually unknown to the public and were a loss making institution being in a somewhat similar situation to City. Both were Abu Dhabi based ventures that believed they had a bright future but needed investment and global marketability. City gave Etihad the marketing space and in Manchester gave them a visibility that has helped grow the Etihad brand. They are now organising code shares in the US with major airlines and are investing in US soccer for the same reason. It grew their visibility and respectability.
What City seem to be creating here is a network of football clubs but also a commercial network. Khaldoon talked about offices in Kuala Lumpur and China which is great but these clubs not only allow us to put commercial staff on the ground but the 20% that we hand out to local investors who already have major contacts there (such as the NY Yankees and the Melbourne investors) will help growth. We're essentially giving away 20% of the project in return for their contact books and industry knowledge at a local level.
The Japanese deal is similar but as they have regulations over foreign ownership, we seem to have taken the 20% share and left Marinos with the 80% share. For this we can feed them scouting and coaching resources and education whilst they turn sponsors in Japan interested in sponsoring the major European and global markets onto us. I do believe that that deal has probably already paid for itself with the Nissan partnership that we saw at the West Ham game. Nissan can't get that type of exposure in the Japanese market but we can provide it to them.
Think of this as a fishing net. At the moment we and every other major club mainly trawls a small pond. We compete on the same ground as others and try to bring in our own haul. What the City Football Group does is cast our net across an entire ocean. We might catch a fish in Melbourne that is interested in expanding to the American markets, which we can provide and helps build long terms relationships with them so that when they want to come into Europe, we have them covered there aswell. We might catch a great white shark that only lives in Japan. Maybe a company in the US is interested in moving into the Middle Eastern markets where I'm sure Al-Jazeera FC will join us at some point?
I once wrote something to Tolmie in a PM when we were talking about different business models. I said that the genius of Microsoft compared to others is that they don't just own pieces of software and the like, they own the entire platform. If you want to write software for a home computer that will sell in its millions, you generally have to adhere to Microsoft and their bullshit because they own Windows and they say what happens with it. Your choices are to either move platform to a less profitable and less available base or pay them what they want. Everybody just pays them. It's the same with Steam for all you gamers out there and the same with Google for you website owners. If Google decided tomorrow that every website needed a piece of Google ran code on it to be listed on their search engine, me and Ric would be implementing it the same day as with every other website owner in the entire world.
Controlling the platform gives you not only a massive reach but a level of control that others need to adhere to. The City Football Group are creating this platform as we speak by moving into global marketplaces and tying them all up together. This is not dissimilar to what the Premier League Big Five did in 1989 or what UEFA have done with the Champions League packages.
The amount of upsides to this as just ridiculous. They are too numerous to mention. Others have already identified a collective bargaining agreement and I have already mentioned our ability to be more flexible to a potential partner's needs as well as the value of having local contacts as United have shown in the US, we have shown in the Middle East, Liverpool have shown in Boston, etc. What about if we continue to buy new clubs at this level for 10 years? What about if we make them the best clubs in Japan, Australia, the US and Europe and we hold a City Football Group Invitational Tournament? How much would the TV rights and matchday revenue for that go if it included some of the best clubs in the world playing their full squads I wonder? How much could we sell a place in the tournament to to another club? Just a tiny thought amongst many. How would this affect our transfer policy? We could use our network not just of sponsors but also PR agents with contacts in their national press like Kloss does here and make our new signing a global superstar immediately, which considering we own our player's image rights would move money back into us. What about the ability to offer the next American superstar the chance to be trained at the best Academy in the US, move them over to City when they have hit the right talent and then retire back home, maybe with a career where we start them off as a coach trained in Australia before they come back to us? How would this affect us picking up the best coaches in the world, guaranteeing that even if a new manager comes in we can move them to an affiliate that plays the same way, a real job security in a field where there isn't enough? What about potential scouting possibilities having all these clubs scouting their local talent and bringing them in to play the City way?
When Cook started talking about a ten year plan, this is it for me. This one structure in my opinion will make us the highest revenue generating football club in the entire world and I absolutely cannot believe that nobody else thought of it before. I guarantee this setup will be copied by many people in the future, it's genius and like most genius ideas so simple that everybody should kick themselves.
The benefits of this are absolutely huge. We could literally talk all day about how fantastic an idea this is for us. This isn't just like having a feeder club, it's an integrated approach to widen City's net across the entire world in every single marketplace and every single country. We are building our own platform and will control it as such.
