Bloomberg News

Manchester City Said Close to Being Awarded MLS Queens Team

December 15, 2012

Manchester City, the English Premier League team owned by Abu Dhabi’s Sheikh Mansour bin Zayed Al Nahyan, is close to being awarded a Major League Soccer expansion franchise in Queens, New York, for a record $100 million, three people with direct knowledge of the talks said.

The team would be known as the New York City Football Club and has contacted former England national team captain David Beckham about a role, two of the people said. Manchester City will explore other leagues around the world, seeking a way to expand its brand, two of the people said.

Manchester City, which won the Premier League last season, will pay more than two times the previous record for an MLS team, said the people, who requested anonymity because team and stadium contracts aren’t signed.

MLS spokesman Dan Courtemanche said via telephone that the league has held discussions with a number of possible ownership groups and that no expansion agreement has been completed.

“Our discussions remain private,” he said.

Manchester City today denied it was to become an MLS owner.

“Manchester City are not buying an MLS club,” the club said in a statement issued through Britain’s Press Association.

Paul Swangard, managing director of the Warsaw Sports Marketing Center at the University of Oregon, said in a telephone interview that Manchester City’s involvement with MLS “further validates the strength of the American soccer market to the rest of the world.”

“It shows the league hasn’t plateaued,” he said. “To have it happen now, post-Beckham, is great for the league.”

Stadium Plans

MLS Commissioner Don Garber said last month that the league was “at the finish line” in negotiations with New York City officials on the league’s plan to build a 25,000-seat home for a new team based in Flushing Meadows Corona Park in Queens, east of Manhattan. Garber said the league was talking to a “wide variety” of potential owners, declining to name them. The park already houses Citi Field, home of Major League Baseball’s New York Mets, and the National Tennis Center, home to the U.S. Open.

The previous high fee for an MLS expansion franchise was $40 million for several teams.

Officials with Manchester City have spoken with representatives of Beckham about having an unspecified role with the team, two of the people said. Manchester City will sell a minority share of the team to local investors, the people said.

Beckham, one of the best-known athletes in the world, capped his MLS playing career this month with a second straight championship as a member of the Los Angeles Galaxy. Beckham declined to say where he would be next season, adding that he would continue to support soccer.

Beckham’s Commitment

“My commitment to this league, my commitment to this sport and this country will continue to be the same as it was when I came here six years ago,” said Beckham, who won league titles with Manchester United in England and Real Madrid in Spain before joining MLS in 2007.

MLS officials have been working for three years to bring a new team to New York, creating a rivalry with the New York Red Bulls, owned by Austrian energy-drink company Red Bull GmbH. The Red Bulls, whose roster includes Thierry Henry of France and Tim Cahill of Australia, plays in a 25,000-seat stadium in Harrison, New Jersey, about a 20-minute train ride from Wall Street.

“Clearly there’s enough space in New York for two or three teams,” Red Bulls General Manager Jerome de Bontin said in a Bloomberg Television interview on Dec. 10. “It would be terrific to have that competition in New York.”

Soccer Hotbed

Flushing Meadows is bordered by the neighborhood of Corona, where Mexicans, Ecuadoreans, Chileans and other Latinos help make up one of New York’s most passionate soccer fan bases.

The soccer stadium would cost $300 million to $350 million and be privately financed. MLS wants to start construction in 2014 and open the venue in 2016.

The last professional soccer team to play in the city was the New York Cosmos of the North American Soccer League, who popularized the game in the U.S. by signing international stars such as Pele of Brazil and Franz Beckenbauer of Germany. The Cosmos, started in 1971, played home games in three city venues, the last one in 1976 at the old Yankee Stadium, before moving to Giants Stadium in East Rutherford, New Jersey.

Manchester City yesterday cut its annual loss in half to 97.9 million pounds ($158 million) from last year, when it reported the largest loss ever in English soccer.

City boosted sales to 231 million pounds in the 12 months ended May 31, 2012, from 153 million pounds in the year-earlier period. The team also benefited from 10.6 million pounds from the sale of players.

Debt Restraints

The reduction from last year’s record loss of 197.5 million pounds comes as European soccer’s ruling body tries to put financial rules in place to prevent teams from becoming overextended.

City is six points behind 19-time English champion Manchester United in this season’s Premier League standings and was eliminated from European competition after finishing last in its Champions League group.

City has spent more than 500 million pounds on transfer fees and salaries since Mansour bought the team in September 2008.

The team benefited from the start of a record 10-year naming-rights agreement worth more than 300 million pounds with Etihad, Abu Dhabi’s national airline.

To contact the reporter on this story: Scott Soshnick in New York at ssoshnick@bloomberg.net

To contact the editor responsible for this story: Michael Sillup at msillup@bloomberg.net


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