The new Premier League season opens this weekend, but while football fans will once again fixate on their favourite team’s performance on the pitch, for marketers the changing business models of football clubs are even more intriguing. As Marketing Week has discovered on an exclusive behind-the-scenes visit, Manchester City FC’s owner City Football Group (CFG) is establishing itself as the one to watch.
The group – set up by the Abu Dhabi investment fund which acquired Manchester City for £200m in 2008 – is also the holding company for three other clubs globally, marking the first time that a Premier League outfit has created a ‘family’ of interlinked clubs in order to build its own brand and revenues.
Its new siblings are New York City FC, a freshly established US Major League Soccer (MLS) franchise that is currently playing its first season with stars such as Frank Lampard and Andrea Pirlo in its squad; Melbourne City FC, an Australian A-League club acquired in January 2014; and Yokohama F Marinos, a Japanese J-League club in which CFG bought a minority stake in May 2014.
The network structure aims to satisfy Manchester City’s ambitions to overtake its biggest rivals by providing it with access to new markets, players, fans and global sponsors.
A world-first for football
“With this structure we’re doing something that has never been done before,” claims Ferran Soriano, CEO of CFG and Manchester City FC. “That means you have to take risks, innovate and not be afraid to try new things. There is no limit to what we can achieve.”
CFG may look to add more clubs in the future, though its leadership says it is currently “consolidating the model”. The clubs share access to centralised resources based in the UK such as marketing, IT and finance, as well as football services including coaching and player recruitment.
Some observers, including Arsenal FC manager Arsène Wenger, have questioned whether CFG’s structure could allow Manchester City to “get around” UEFA Financial Fair Play (FFP) regulations – the rules drawn up by European football’s governing body to stop teams gaining an on-field advantage by racking up huge losses on transfer fees and player wages. However, UEFA announced last month that the club had met its FFP requirements for the year, while any deals with sister teams such as the recent loan of midfielder Lampard from New York City to Manchester City are likely to be scrutinised by UEFA.
As the group has grown over the last 18 months, it has introduced innovative new approaches to brand management and commercial partnerships to demonstrate the substance of the arrangement between the clubs. With Manchester City as the flagship brand, CFG is moulding its smaller teams in growing leagues around the world in the image of the Premier League giant.
A clear example is Melbourne City, which was known as Melbourne Heart FC from its inception in 2009 before being swiftly rebranded with the ‘City’ moniker when it was acquired by CFG last year. Both Melbourne City and New York City also incorporate the same sky-blue kit colour as Manchester City and share access to its global marketing operation.
This carefully co-ordinated approach is apparently reaping rewards. CFG claims it now reaches over 400 million fans globally across its four clubs and is attracting an expanding roster of sponsors, drawn to the prospect of activating campaigns at both a global and a local level.
“For a number of years [Manchester City has] been the fastest growing club in football,” asserts Tom Glick, who was chief commercial and operating officer for Manchester City between 2012 and 2014, before moving to New York City this year to become club president.
“That’s on the back of winning, hustle, a culture of fast growth and trial and error. We’re definitely challenging some of the more established legacy clubs out there.”
Manchester City’s resurgence
Despite being one of the oldest football clubs in the country, with a rich track record of success in the 1960s and 1970s, Manchester City spent most of the subsequent period in the shadow of its local rival Manchester United. A prolonged decline led to the 1998 nadir of relegation to the third tier of English football.
After regaining Premier League status in 2002, the Abu Dhabi takeover six years later heralded massive investment and two championships – the club’s first in the top division for 44 years. Numerous star players have been signed in the process, including the most expensive English player ever – midfielder Raheem Sterling, who was captured last month from Liverpool FC for a transfer fee of £49m.
The latest Deloitte Football Money League also shows that City is now the sixth richest club globally, with revenues up 28% to £347m in 2013-14, the largest percentage increase of any club in Deloitte’s top 10.
The CFG structure is crucial to City’s efforts to continue competing at the top of the game – both on the pitch and in the commercial arena. Last year it established two separate divisions in Manchester and London to manage these two areas across its four clubs: City Football Services and City Football Marketing, respectively.
The former is run by ex-Arsenal winger Brian Marwood, who is responsible for creating a consistent brand of “beautiful, possession-based football” across the club network. This includes coordinating coaching, scouting and player recruitment resources, as well as developing CFG’s academies and women’s teams.
In addition, City Football Services aims to experiment with the latest player performance analysis tools following a group-wide deal with software firm SAP last month. The technology is designed to optimise team performances, facilitate data sharing across the club network and provide cutting-edge insights that will feed into fans’ digital experiences.
“Technology is going to help us get fans closer to the action,” claims Soriano. First and foremost, this is likely to include using data to generate content for social media, such as live match statistics for fans while the game is in progress.
Meanwhile, City Football Marketing is tasked with brokering group-wide sponsorship deals. Last month, coconut drink brand Coco Joy – an existing Melbourne City FC sponsor – extended its deal to cover Manchester City and New York City. The expanded partnership, which was announced as Manchester City played a match against Melbourne City during their pre-season tour, was hailed by CFG as proof that its move into new markets is yielding commercial results.
Omar Berrada, commercial director of City Football Marketing, claims a growing array of brands are interested in the “unique” marketing opportunities presented by CFG’s ‘family of clubs’ model (see Q&A). “It allows brands to have the best of both worlds: a consistent global marketing platform in terms of the assets and inventory they can use to engage with our fans, as well as the ability to deliver messages that are very specific to the local markets of our clubs around the world,” he says.
Airline company Etihad, for example, ran a social media campaign last month with the hashtag #globalcityfans and a series of YouTube videos that explored the experience of fans in different regions around the world, including in cities where CFG has clubs. This came after Etihad, which was already the kit and stadium sponsor of Manchester City, extended its deal last year to become kit sponsor of both New York City and Melbourne City.
Similarly, Nissan’s deal in July 2014 to become the first global partner of CFG followed the football group’s investment in Yokohama F Marinos – a club in which Nissan is the majority shareholder. CFG’s investment brought the motor brand into the orbit of its wider group, allowing it to seal a deal for Nissan to become the official automotive partner of all four clubs, including Manchester City.
New fans, new markets
The CFG structure also enables Manchester City to grow its own brand reach around the world. The club’s association with the other teams is most obvious in the identical sky-blue kit colour worn by the New York and Melbourne players. This is a sign of prestige for the fans of those smaller clubs, claims Glick.
“They understand and value that their club is connected and rooted to a big European club that’s performing at a very high level, with all of the resource and expertise that comes with that,” he says.
The clubs share access to the same marketing assets via Berrada’s centralised department. For example, a recent online marketing campaign features videos of Manchester City player Sergio Agüero and New York City player David Villa taking part in various skills challenges in each city. Such an activation allows both clubs to speak to both sets of fans simultaneously.
However, despite these cross-club campaigns, Glick denies that CFG’s ultimate goal is to create a new type of football fan who feels loyalty to an entire family of teams.
Instead, the group aims to build an individual character for each club that respects the tribal loyalties of each fanbase, he says.
“We’re certainly building a community of fans, but the most important thing is that each one of our clubs is connected to its local city and the fans of that city,” adds Glick.
“In some cases those fans will also want to follow the other clubs in the group, but it’s important that’s not forced. We know, for example, that many of our New York fans follow other European clubs besides Manchester City, and that’s fine.”
To help create these localised club identities, CFG sought to engage fans in both New York and Melbourne in early-stage activities such as the design of the new club badges.
In Melbourne, this included featuring the city’s municipal flag in the design to reflect the fact that fans had carried the flag to games prior to CFG’s takeover. Such moves helped to minimise the controversy caused by the club’s rebrand.
Both clubs are strategic choices by CFG to gain a foothold in markets where football – or soccer as it is known in the US and Australia – is growing rapidly. Glick suggests that the arrival of New York City has met a latent demand for another club in a city of eight million people previously served by just one other – New York Red Bulls.
The New York City franchise has already clocked up 18,000 season ticket holders in its first season – higher than figures released by any other MLS team except Seattle Sounders – and after 12 games is seeing average attendances of 29,000 at Yankee Stadium, the venue it shares with the city’s legendary baseball club. This is the third-highest average in the MLS and over 10,000 per game more than New York Red Bulls.
The arrival of marquee signings this summer such as Pirlo, who made his debut last week, has also helped to establish the new MLS side.
“Our fans are young, tech-savvy, high-earning professionals who have grown up with the game,” says Glick. “It’s a group that’s very excited about building the club with us.”
Scott Munn, CEO of Melbourne City, reports similarly impressive figures since his club joined CFG. In the past year, the club’s turnover has doubled, season ticket holders are up 140% and the team’s performance has improved markedly to the extent that Melbourne climbed from bottom of the A-League to finish fifth and with a play-off spot last season.
Munn attributes the success to the club’s fan engagement efforts following the CFG takeover, as well as to improved player recruitment and the overall investment in club operations. This includes the opening of the Melbourne City Football Academy in February, a state-of-the art complex built by CFG that has provided the club with one of the best training facilities in Australia.
Its launch came shortly after Manchester City opened its own £200m facility last year, while CFG is close to finishing work on New York City’s academy complex.
As with its group-wide sponsorship deals, marketing operation and fan engagement strategies, the sites are indicative of CFG’s efforts to create synergies that reinforce and strengthen each of its club brands. “We’re always linking into our global family, be they in Manchester or in New York, to share best practice,” declares Munn. “There isn’t a week that goes by where I don’t have communication with every department of the City Football Group.”
Read our Q&A with City Football Marketing commercial director Omar Berrada, on expanding the Manchester City brand around the world, or watch our video report from the City Football Academy in Manchester