[Essay] The evolving strategy of CFG

Gotham Gator

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Interesting stuff. No doubt there is a lot to be concerned about. However, when I noticed the writer's sloppiness on things about which I know something, it made me question the whole endeavor.

For example, he says that CFG has lost GBP850 million on their purchase of Manchester City, including their GBP210 purchase price. First of all, the purchase price isn't an expense - they still own the Club. More importantly, the value of that Club was recently estimated at GBP1,630 million. So, while they might be cash out GBP850 million, their investment has risen in value by GBP780 million more that their cash outlays. They had a strategy to pour in cash in an effort to boost value and create a sizeable return, and so far it seems to be working brilliantly.

And this was an important part of the article. He quoted these figures to support the notion that they are buying soccer clubs not for profit, but to distract the public from human rights abuses . (As if people had been clamoring about these abuses before they sunk money into Man City.)

Which comes around to his description of the abuses themselves. There is really disturbing stuff in the article. No doubt there is much for anyone to be concerned with when dealing with a repressive oligarch. But is what he wrote accurate? Is it in proper context? Are there mitigating factors left out? Is he jumping to conclusions? Who knows? But the example cited above - to point out just one - has to leave doubts.
 

Falastur

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Interesting stuff. No doubt there is a lot to be concerned about. However, when I noticed the writer's sloppiness on things about which I know something, it made me question the whole endeavor.

For example, he says that CFG has lost GBP850 million on their purchase of Manchester City, including their GBP210 purchase price. First of all, the purchase price isn't an expense - they still own the Club. More importantly, the value of that Club was recently estimated at GBP1,630 million. So, while they might be cash out GBP850 million, their investment has risen in value by GBP780 million more that their cash outlays. They had a strategy to pour in cash in an effort to boost value and create a sizeable return, and so far it seems to be working brilliantly.

And this was an important part of the article. He quoted these figures to support the notion that they are buying soccer clubs not for profit, but to distract the public from human rights abuses . (As if people had been clamoring about these abuses before they sunk money into Man City.)

Which comes around to his description of the abuses themselves. There is really disturbing stuff in the article. No doubt there is much for anyone to be concerned with when dealing with a repressive oligarch. But is what he wrote accurate? Is it in proper context? Are there mitigating factors left out? Is he jumping to conclusions? Who knows? But the example cited above - to point out just one - has to leave doubts.

I quite liked the bit at the end where he points out that all five of the top clubs ranked by betting odds on winning the CL this season are tainted by their association with either Abu Dhabi or Qatar, not just CFG. He undoubtedly makes some fair points, and yes in a perfect world we would put pressure on offenders of various types to either end their involvement in football or reform their ways, but frankly how many teams at this point can be said to have a spotless record?

In MLS, Red Bull GmBH's family heir is currently wanted by Interpol for a hit-and-run murder. Philip Anschutz of LA Galaxy is a serial funder of such things as climate change denial and LGBT civil rights suppression. Further afield, Roman Abramovich and Alisher Usmanov have or had mafia and KGB links and Usmanov in particular reportedly used to do such varied activities as heroin trafficking and racketeering, while Portsmouth was recently owned by the son of an arms dealer involved in the Angolan Civil War. If you want a story of serial abuse by a club itself, let alone its owners, how about the why in which Manchester United's board of directors within 24 hours of the Munich disaster had thrown the wives and children of dead players living in club-owned houses on the street, but not before telling them in so many words that dead men could not claim pensions - this in an era when a top footballer might earn £50,000 a year, and women did not tend to work.

I'm not insensitive to the human rights accusation stories. I really don't want to give that impression. But I think what I'm trying to say is that I would feel an awful lot more willing to pay attention to them if it wasn't only ever CFG which gets criticised. It does rather create a siege mentality.
 

Shwafta

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Smart move, trying to remove as many Red Bulls from the scene as they can.
(In all seriousness, I could have seen this coming a mile away, China was the next place that made sense for them to try their game)
 
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BxLio91

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I know synergy and all but I'm not a fan of us having to announce that CFG bought yet another team that will reduce our importance in "the financial group".
It's screams corporate and inorganic. Yes I know what team we support.
 
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Ulrich

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I know China is a vast market to tap, but ownership structure for anything in China is as a minority owner because a Chinese entity always has to hold the majority, so is it really worth it for and org like CFG who wants full control? I guess maybe CFG has a better relationship with the Chinese as a monarchy-owned-Middle East-company than an American company venturing in, but considering the variables, including the dire level of play in the Chinese league (all the stars complain afterwards about their teammates), that it’s a head scratcher. Plus, the MO to success there is overpaying for aging stars, and that’s no what CFG seems to be about, so are they gonna create the Great Imperial City Training Facility starting with only a U3 team and wait 15 years to promote the City Way from within????
 
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roxfontaine

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My guess is that it's just an "in" to the Chinese market. They don't actually need control, they just need another arm in that market. I'd imagine that this works out for them because it's a minimal investment that returns outsized value since they can move money around there. Ulrich Ulrich
 

Ulrich

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My guess is that it's just an "in" to the Chinese market. They don't actually need control, they just need another arm in that market. I'd imagine that this works out for them because it's a minimal investment that returns outsized value since they can move money around there. Ulrich Ulrich
Yeah, hadn’t really considered the currency laundromat angle.
 
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Fake Jew

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I know China is a vast market to tap, but ownership structure for anything in China is as a minority owner because a Chinese entity always has to hold the majority, so is it really worth it for and org like CFG who wants full control? I guess maybe CFG has a better relationship with the Chinese as a monarchy-owned-Middle East-company than an American company venturing in, but considering the variables, including the dire level of play in the Chinese league (all the stars complain afterwards about their teammates), that it’s a head scratcher. Plus, the MO to success there is overpaying for aging stars, and that’s no what CFG seems to be about, so are they gonna create the Great Imperial City Training Facility starting with only a U3 team and wait 15 years to promote the City Way from within????
13 percent of CFG is owned by a Chinese company. My bet is they bought a majority stake of the team and CFG the rest.
 
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