Real Madrid could rue not beating Man City in building a global club network
"If I had pitched the idea to Real Madrid, the answer would have been: 'you're crazy'," said Ferran Soriano, the Chief Executive Officer of Manchester City.
In July 2017 City Football Group (CFG) -- Manchester City's parent company -- bought a 44.3 percent stake in Spanish club Girona. An agency owned by Pere Guardiola -- brother of Pep -- bought the same amount of a club that, a few months earlier, had been promoted to La Liga for the first time in its history. Girona became the sixth club in CFG's portfolio. In addition to Manchester City, CFG either owns or part-owns five clubs in four continents: New York City (USA), Melbourne City (Australia), Atletico Torque (Uruguay), Yokohama F. Marinos (Japan), and now Girona.
Soriano's idea is bold. Too bold for Madrid, he thought. He wants to establish a multinational network of football clubs with Manchester City as the flagship.
The network will allow CFG to comb the world for the best young talent. That is the theory, at least. Once enrolled at one of the clubs within the network, the rough diamonds of Manhattan or Montevideo will benefit from state-of-the-art facilities and elite coaching. The good players will be sold for a profit. The best players will climb the rungs of the CFG ladder: from Atletico Torque, to Girona, to Manchester, for example. It is a La Masia model for a globalised world. Indeed, it was as vice-president of Barcelona that Soriano first tried to form a "franchise" club abroad. He didn't succeed.
A business case sits alongside the sporting one. "Glocalisation" is the theory that businesses expanding in to foreign markets -- as CFG is doing -- must adapt their global product to suit the local markets. Melbourne City FC and New York City FC are footballing examples. Both clubs are "on-brand". They wear sky blue shirts and carry the "City" suffix like the queen bee club in Manchester. But they are also part of the local community, with their own flavour and culture.
Madrid will never replicate the Soriano vision because the club is owned by socios -- members that elect a president. The ownership structure is essentially not-for-profit. Presidents cannot invest their own money. The structure at Barcelona is similar. The two big clubs in La Liga are global brands, but they are rooted within their cities.
Javier Tebas -- the president of La Liga -- appears flustered by the presence of nouveau riche at the elite level of European football. In Sept. 2017 he accused Manchester City and PSG of benefitting from state funding that "distorts European competitions". La Liga asked UEFA to investigate Manchester City's finances. UEFA refused. Tebas probably feels threatened by the immediate spending power of the two new behemoths on the block, rather than the hypothetical formation of Cape Town City or Singapore Saint-Germain.
But does any of this matter? Will Madrid be hindered by an inability to build a multinational network? It's too early to tell. The project is only four years old. Although Manchester City are sauntering ostentatiously to the Premier League title, we still don't know if the template will be a success. It is, however, easy to identify how Madrid might benefit from a similar concept.
The sporting advantage is clear: it would create a gentle, incremental path to the elite. Vinicius Junior signed for Madrid from Flamengo in May 2017. The fee was €45 million. He was 16 at the time. Vinicius will continue his development in Brazil until 2019. But even so, the move to Madrid will be a jolt, both in terms of standard and expectation.
With a network of affiliated clubs, Madrid could ease the transition. A couple more years at a South American club, then to Portugal, and finally, to the Bernabeu. Madrid would manage his development throughout the transition, thus avoiding the uncertainty of external loans.
The business case is less clear. The presence of 2,351 penas -- fan associations that are officially recognised by the club -- across the world mean that Madrid have, perhaps inadvertently, embraced "glocalisation". There are four penas in Guatemala and three in Equatorial Guinea. Groups of supporters gather to watch matches together. In sanitised terms, they gather to consume a global product in a tight-knit local community.
"The penas are the supportive backbone of Madridismo and are essential to transmitting our values," said club president Florentino Perez to an assembly of supporters in Abu Dhabi in December, while Madrid were competing in the Club World Cup.
"This club doesn't have barriers or borders. The origin, nationality, language, religion, and culture doesn't matter," he added.
The crucial, crude difference between New York City FC and a Madrid pena in New York is that of a football club. Fans buy tickets and merchandise. They'll probably begin to take an interest in the Manchester flagship. There will be sponsorship deals and broadcasting rights on top. Conversely, Madrid would not generate income to reflect the strength of its brand.
Madrid will follow the development of CFG's portfolio and its effect on Manchester City with a mixture of interest and trepidation. Madrid are not used to watching, hands tied, while a rival innovates. Particularly when that rival has incomprehensibly deep pockets, a clear plan, and emerging markets to exploit. Madrid might once have reacted to Soriano's vision with the incredulity that Soriano expected: "you're crazy". In a decade, however, they may regret their inability to have taken the chance.
Matt McGinn is ESPN FC's Real Madrid blogger. Twitter: @McGinn93