What return does the Skeikh expect?

[Didsbury Dave]

I don't think this is a question which anyone has answered satisfactorily over the last two seasons.

Exactly why is the Skeikh investing all this cash into the loveable but errant Manchester City FC?

Does he envisage a financial return one day from the club? I just can't see it myself unless there are radical changes. Does he believe we can one day sell our own TV/internet rights?

Is it about the EAst Manchester area, and the development of a leisure site there?

Is it about the name of Abu Dhabhi, and the development of the region as a world power?

Is it about ego, essentially a plaything?

Did he underestimate the task? Did he think he could invest £200m and in return get the champions league trophy, worldwide fame and a profitable club?

Or is there more to it than meets the eye? Comments, anyone?

 

[inbetween]

The return is indirect exposure on Abu Dhabi, they aren't stupid they know the oil is running out and its unhealthy to rely on it so they are seeking to invest in other avenues. An example being that Khaldoon runs a development and investment company which owns an 8% of AMD, 5% of Ferrari and so on, they just want to be more diverse and football is a global stage worth billions.

Had you heard of Etihad Airways before they were brought in as a sponsor to City? They are a major airline and they've only been going for what 10 years maximum? In terms of cash spent what they are spending on City is nothing really to what they'll get in the long term.

 

[sweep]

A bit of a plaything that also gets Abu Dhabi mentioned around the world.

 

[Didsbury Dave]

The return is indirect exposure on Abu Dhabi, they aren't stupid they know the oil is running out and its unhealthy to rely on it so they are seeking to invest in other avenues. Had you heard of Etihad Airways before they were brought in as a sponsor to City? They are a major airline and they've only been going for what 10 years maximum? In terms of cash spent what they are spending on City is nothing really to what they'll get in the long term.

This is the answer commonly given.

But does it really stack up?

 

[Kirkstall Blue]

In partnership with Manchester City Council, The development of East Manchester has to be high on the list of lucrative deals for the owners. City with our brand new stadium is ideally placed for investment in all manner of forward planning.
I must admit I'm always suspicious of the something for nothing idea and if it sounds to good to be true "it usually is". It's not a plaything or an ego trip for me, but a well thought out business plan.

 

[Damocles]

Yes, it stacks up perfectly. The 'brand exposure' of Abu Dhabi in England must have at least doubled since City were taken over, everybody now knows what Abu Dhabi is about, whereas previously, Dubai was the more commonly known.

From my own personal understanding, I am under the impression that Abu Dhabi are currently doing a forward looking investment thing.

As the oil runs out, they need to ensure the continuation of their economy. They do this by investing large amounts of cash now, under the idea that their investments will be turning a tidy profit by the time they run out of oil. Spend while they have it, earn when they don't.

 

[Didsbury Dave]

They do this by investing large amounts of cash now, under the idea that their investments will be turning a tidy profit by the time they run out of oil. Spend while they have it, earn when they don't.

I understand all that Dammers.

But my real question is that are they expecting a financial return from Manchester City FC?

Maybe the short term aim is the exposure, the long term is a return.

 

[Tree]

It is about positive profile for Abu Dahbi around the world. The premier league is one of the highest profile TV draws globally. So what they need is positive feedback from the association with City.

The money is relatively small given the funds available, but the failure to qualify for the Champions league is a massive blow as that would have given much more exposure next season. I'm sure they will wait, but exposure is what the Skeikh Mansour wants pure and simple.

 

[There is a Light]

One day I believe he would expect us to be self sustainable but making enough money to improve his bank balance I am not so sure.

 

[inbetween]

They do this by investing large amounts of cash now, under the idea that their investments will be turning a tidy profit by the time they run out of oil. Spend while they have it, earn when they don't.

I understand all that Dammers.

But my real question is that are they expecting a financial return from Manchester City FC?

Maybe the short term aim is the exposure, the long term is a return.

Its proven pretty much you can't make a profit out of football, look at United the biggest turnover club in the world and they are saddled with debt turning in a poultry profit. The amount of money going in far offsets the amount you will ever make purely on football terms like gate revenues, even if City turned a profit on their books its not like the owners will pocket it and go because its pathetic amounts of money, the owners are used to 8 figure sums on their cheques. The only real return they want is through exposure in the UK of Abu Dhabi which will be by far a much bigger cash cow.

To put things into perspective Sheikh Mansour protected Barclays (by buying a very large share in them) which prevented them having to go to the government for a bailout like Royal Bank of Scotland, Lloyds etc had to. He made a £1.5 BILLION profit in eight months. So trust me if our owners wanted to be shrewd and wanted an immediate and large return they could get it elsewhere, this is all about the long term.

Futher reading below, quite interesting to read as you realise how clever this guy is!

<a class="postlink" href="http://www.telegraph.co.uk/finance/comment/5431878/Sheikh-Mansour-has-been-ahead-of-the-game-on-Barclays.html" onclick="window.open(this.href);return false;">http://www.telegraph.co.uk/finance/comm ... clays.html</a>

<a class="postlink" href="http://www.telegraph.co.uk/finance/newsbysector/transport/5925697/Sheikh-Mansour-invests-280m-in-Virgin-Galactic.html" onclick="window.open(this.href);return false;">http://www.telegraph.co.uk/finance/news ... actic.html</a>