With all the drama and excitement of Euro 2020 and a fascinating summer transfer window, even an ardent football fan may have missed the news that City Football Group, the parent company of Manchester City, now boasts reigning champions in three different countries – India, Australia and, of course, England.
However, the mutual benefits of clubs in common ownership may well extend beyond immediate sporting success. For English clubs, this model offers intriguing opportunities to avoid missing out on the best under-18 talent from the European Union in a post-Brexit landscape.
The first question many might raise is: are there not rules that prevent or at least restrict the ownership of several clubs by one entity? And the short answer is: yes there are, both in Europe and England.
European governing body Uefa, the Premier League and the English Football League (EFL) all have rules which govern the level of influence that the owners of one club are permitted to exercise in the decision making of another.
In Europe, this equates to a restriction on having the majority share in more than one club, or otherwise having the power to exercise “a decisive influence” on its decision making. For the Premier League, the test is stricter, precluding anyone with 10 per cent or more of the voting shares in one club holding any interest in another Premier League team.
The EFL rules are tighter still, restricting anyone holding any interest in an EFL club from simultaneously having any shares or administrative role in not only EFL or Premier League clubs, but even clubs at the high end of non-league football and the Scottish and Irish football leagues. The EFL Board can permit these interests on a case-by-case basis, but the initial barriers are substantial.
But what of relationships like Manchester City’s with other City Football Group-owned clubs, such as Girona FC? Can other clubs in Europe be used as a professional level feeder club, or an outlet for young players to get first-team experience?
The position very much appears to be yes. As a starting point, Uefa rules only bite if both clubs are in European competition.
In the Manchester City/Girona example, the rules would only come into play should Girona qualify for a Uefa competition, so either the Europa Conference, Europa League or Champions League. While Girona remain in Spain’s second tier, those restrictions do not apply.
Why City Football Group structure could help Manchester City recruit the next Fabregas
So much for the rules on common ownership. What about the rules governing the transfers of young players?
The starting point here is that world governing body Fifa’s regulations prohibit the international transfer or loaning of players under the age of 18, with only very limited exceptions. One such exception is transfers within the EU (or the EEA) – the exemption that brought the likes of Cesc Fabregas and Serge Gnabry to England when still academy players.
Since Brexit, however, this exemption has been unavailable to English clubs who have instead had to focus their scouting efforts for 16 and 17-year-old talent on those players already with UK clubs.
How, then, might a club like Manchester City take advantage of its multi-club group structure to offset some of the disadvantage in the transfer market that Brexit has created?
Well, EU clubs like Girona FC do still qualify for an exemption from that transfer restriction. They can also offer first-team experience to young and burgeoning talents. They are therefore arguably an ideal option for clubs who are still looking to find talented players in the EU or EEA that are yet to break through.
That prospect becomes all the more appealing if the wealthy backing of a bigger club or its owners can also help improve the youth and coaching facilities of the feeder team beyond what might otherwise be possible.
The multiple club ownership model is a potentially useful tool for an English club like City that is concerned about missing out on the best under-18 talent that their European scouting programmes identify, or having to pay sizeable transfer fees to sign them once they are tied to professional terms and have perhaps made first-team appearances.
City Football Group already has an established practice of loaning players between clubs within the group, but in this post-Brexit world, Girona could become all the more significant. The same applies to Troyes and Lommel, who are also majority owned by City Football Group and play in the French and Belgian second divisions respectively.
If City’s scouting team feel they have found a young Fabregas-like talent playing for an EU club, they have a possible route to secure their registration at 16, while the player remains under the radar – or simply, by reason of the Fifa rules, out of the grasp – of their domestic rivals.
It is, of course, not a simple proposition. Such a player may well have offers at bigger, more successful clubs than Girona, and guaranteeing a future move to City might be challenged, by other clubs or by the regulators, as a circumvention of the Fifa regulations.
Nonetheless, in the elite sporting world of marginal gains, there is usually someone ready to exploit niche and risky opportunities in the name of gaining an edge on their competitors. The question is perhaps not so much if this type of arrangement is used but when and by whom?
Nick White is a Partner in the sports team at Charles Russell Speechlys.