Taste the Feeling : FC Coca Cola : 1.0

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Introduction

This is my first attempt at a FM series, despite playing FM and writing many articles on football down the years. I will be going in-depth on how a company can set-up a footballing empire to rival the likes of Red Bull, using aspects from a number of different clubs around the world. Whilst Red Bull are controversial, I think it’s the start of a change in football.

I strongly believe in 20 years time, the likes of Coca Cola, Adidas, Nike, McDonalds etc will all have their own football empires, so we’re going to do a simulation. Start from the ground up, with impeccable research into our first club, until we’re stable and reached our goals – to be decided later on. We’ll then expand into another country (again well researched) and so on, until we’ve conquered most of the world.

 

Case Studies

There are a number of football clubs who are using models that I believe our company (from now on named Cola) should adapt and modify to create the perfect system.

 

The Pozzo Model

This model combined with the Red Bull model will form the underlying structure of the Cola model i’m presenting, but with a number of changes that will be detailed later on.

The Pozzos are Italian businessman Giampaolo Pozzo and his son Gino Pozzo. Giampaolo bought the Italian team Udinese in 1986. A few years into his ownership of the club, Giampaolo knew he didn’t have the financial clout of the bigger teams in the league, and was as such unable to compete, so he decided to trial a new method of football ownership.

He built up a huge world-wide scouting network that is still the envy of most football clubs, his plan was simple, to find talented young players that he could buy cheaply (by buying from countries not overly renowned for their football ability) and showcase their talents. The plan was to then sell on the youngsters for a significant profit, and reinvest the money into new players. The model was hugely successful with players like Alexis Sanchez (bought for £500k, sold for £23m 6 years later), Gokhan Inler (bought for £900k, sold for £16m 5 years later) and Roberto Pereya (bought for £1.75m, sold for £15m 3 years later) being some examples that came through the system.

The model was in fact so successful that the club had too many youngsters to display, which prompted a re-think of the business. They decided the best way to proceed was to buy another club to do the exact same thing as had proven so successful with Udinese. So they purchased Granada (then in the Spanish 3rd division), two successive promotions then followed with players sent from Udinese to Granada, taking Granada to the top tier in Spain.

The Pozzos then wanted to take their clubs to the next level, so they took advantage of the huge TV deal in England (clubs in the English Premier League earn over £100m per year from the TV deal alone, no matter where the club finishes in the league – Aston Villa who finished bottom of the Premier League at the end of the 15/16 season earned more than double the amount Bayern Munich did for winning the German league). This ended in the purchase of Watford for £12m (who at the time were in the Championship, the division below the Premier League). 3 seasons later Watford are in the Premier League, reaping the financial rewards, and are using the money to buy players to “feed” Udinese and Granada.

 

Chelsea
At first glance emulating Chelsea who are one of the biggest and richest football teams in the world, seems a tough ask, but it’s not their success that Cola should be emulating (at first). For a number of years now Chelsea have been stockpiling talented young footballers (their youth teams have been hugely successful, winning the last 3 FA youth cups). However due to the competitive nature of the league and competitions they’re in, the youth players rarely filter into the senior team setup, instead going out on loan (Chelsea currently have 38 players out on a loan, a phenomenal amount) before eventually being sold.

Whilst this is good for the club’s finances (as they’re making a profit on a majority of the players being sold), it is still horribly inefficient. Players going on loan to another club will experience new coaches, with new tactics wanting them to play football in a different way to how they may have been playing it at Chelsea or the club they may have been on loan at before. They may not suit this style of football, thus stagnating their development ultimately reducing their value.

Whilst the stockpiling of youth was covered in the Pozzo model and is something i’d do with Cola, I don’t agree with the Chelsea model for development of players. My model will ultimately end up with numerous football clubs being owned by Cola. By ensuring that as many of the teams play a similar style of football (where possible), we can always keep the players “in-house” and move them to a Cola club that suits their level (as some clubs will be playing in a higher level), which means their development won’t stagnate as much, keeping or even adding to their value.

 

Red Bull

Red Bull have already adopted successfully parts of the model I’m suggesting we adapt. They started by buying Austria Salzburg back in 2005 (renaming the club Red Bull Salzburg in the process) before adding New York Metrostars (renaming them New York Red Bulls) a year later, before adding clubs in Brazil, and Ghana in 2007 and 2008 respectively. They further added RB Leipzig in Germany in 2009. They now have teams in the top divisions in Austria, Germany, USA.

However, despite the on paper success there’s many ways that Red Bull have failed, which we’ll be doing differently and learn from Red Bull’s mistakes. The rapid expansion of the Red Bull model has not been good for it’s stability, with the key focus being the European teams (for the TV money and European prize money), this has caused it’s other teams to falter somewhat. New York Red Bulls have never won the MLS Cup (the playoff that the American league ends in) despite significant investment. Red Bull Ghana was scrapped in 2014.

The non-European clubs are run almost as separate entities to the European clubs, creating an odd sort of link. This isn’t helped by the rules of the MLS (the American league), which has strict salary caps, generally far below the average wage in the top leagues in Europe as well as a maximum of 8 non American players allowed per club. So whilst an American club is basically essential to the cause, it’s an odd one to deal with so may come later.

 

The City Group

The City Group are a group of clubs set up by Mansour bin Zayed Al Nahyan, the flagship club is Manchester City, of whom have had upwards of £1 billion invested in them since 2008. Manchester City have, like Chelsea, been investing heavily in young players, with a bigger emphasis on bringing them through to the first team rather than letting them go out on loan.

This has resulted in a few players making their first team debut with most likely more to follow. I was writing an article on multi-club ownerships (where one person or company owns multiple football teams and during my research discovered that Manchester City have agreements in place with various different clubs, these agreements vary on a club by club basis, but it was 2 agreements that really caught my eye and got me thinking. The first is an agreement with the Portuguese team Gil Vicente, in which the City group get to access Gil Vicente’s scouting network , the second is a partnership with the Ghanaian national football association in which they exchange “technical, logistical and medical support”.

My thought is to combine the two deals, as far as i’m aware, there’s no rules in place about what sort of agreements are allowed like this, so a club could really benefit from signing a deal with a national football association for their scouting data (as football internationals take place at most age ranges, so the respective FA’s will have large amounts of data on promising players, cutting out the need to scout the whole country – allowing the resources to be used elsewhere. I’ll expand more on this later in the document.

Location

So, we’ve established that we may have an interest in buying a football club, but which football club do we buy? We ideally want to build a club upwards, rather than buying a club in the top division outright, as we have full control over the development of the club, for a cheaper price, and with low expectations from the fan-base. I know this is all imaginary money, but for the purpose of the simulation, we’ll be running it like a proper business. So “buying low” is the way we want to go.

We also want a league that’ll be easy to get promoted from, with few challengers for the title in the top division – or alternatively an easy route into European competitions like the Champions League or Europa League (as making the Europa league group stage will provide a minimum of €2,400,000 – not including €360,000 for each victory in the competition or €120,000 for a draw) with a whopping €12,000,000 for qualification to the Champions League group stages.

We also want a country that is quite talented at football, as it’ll be a good long-term investment for the academy.

europa_coefficient

These are thirty countries that are given the most European slots. The top five of Spain, Germany, England, France and Italy are too competitive and expensive for us to start with (we will cover these later, as these markets will be our very long-term aim, however I believe it’ll be best to start small and build up to conquering these.

Despite Russia and Ukraine being up quite high in the rankings, they don’t really fit the criteria we’re looking for yet – the domestic talent pool for players is relatively low and the divisions quite competitive, with many teams having a huge amount of financial resources to compete with.

Portugal are next on the rankings and could be a good location for a starter club, a good national team (meaning lots of talent has emerged from Portugal previously) with a weak second division. However there are some downsides to starting the empire in Portugal.

The second division has 22 teams, meaning the league will be quite hard to get out of.

Another reason to avoid Portugal to start with is the dominance of the teams already in the top division. Porto, Benfica, Sporting CP, and Braga have dominated the league, with those four taking four of the European spots in seven of the last ten seasons, this has caused a disparity within the league due to the financial rewards of making the European competitions and are subsequently very good teams that will take a lot to topple.

 

Belgium

Next up is Belgium, which would be my recommendation. The second division is of a weak standard with only 8 teams. The top division has just 16 teams, with only a couple that are more dominant than the rest of the league (and they don’t always win the league) The really interesting thing is the way the European places are divided up. In most leagues it’s the top three or four teams in the top division that gain a place, with perhaps a spot given to a team which wins a cup.

In Belgium however, the teams that finish from 1st to 6th are put into a group, that then play each other twice, with the top two teams of the group going through to the Champions League. The team that finishes 3rd in this group goes straight into the Europa league, whilst 4th goes into the play-off (more on this later). The teams that finish 7th-15th are then split into two groups of six (3 teams are added from the 2nd division) , that play each other twice. The winner of each group then play each other, with the winner moving into the final against the team from earlier. This means it’s actually possible to qualify for a European competition finishing near the top of the second division, or anywhere but last place in the top division, as far as i’m aware this is not possible anywhere else in Europe.

Further to this, in recent years the Belgian Football Association has undergone huge developments in it’s coaching and the way football is structured in the country, this has seen them produce many top players playing for some of the best teams in the world. They are now currently ranked the 2nd best national team in the world, so there’s plenty of talent around to be discovered and nurtured through the academy.

So Belgium ticks all of the boxes, but which club? Below is a picture of all the clubs currently (16/17 season) in the Belgian second division, with their average attendance and the capacity the stadium (note: Union Saint-Gilloise are under-going stadium renovations so have moved to the national team stadium temporarily – hence the large stadium)

belgium_attendances
Our ideal club will have a decent size stadium already, in a well populated region of Belgium – to allow for future expansion of the fan-base and a large pool of potential players for the academy. Ideally the area will have little competition from top division clubs, to allow for complete control over the region.

belgium_firstdivisionThe location of teams in the Belgian first division.

belgian_2nddivision.JPGThe location of teams in the Belgian second division.

belgian_provincesThe provinces in Belgium.

belgian_provincedetailsThe details of each Province.

Antwerp: Small area with a large population (this is good for scouting + for the potential fanbase). Two teams in the top division, and two teams in the second division which is less than ideal, but still remains a good candidate.

East Flanders: Like Antwerp, with a small area and a decent size population, however with no second division clubs and three top division clubs, including Gent whose minimum attendance during 15/16 was 19,598 out of a capacity of 20,000 it doesn’t look like an attractive proposition.

Hainaut: Decent size population, although with a large area and just the two small clubs (in comparison to the size of the province) – although they’re both in the top division. A potential candidate.

West Flanders: Six clubs, four of which are in the top division and a large area make this an undesirable area.

Flemish Brabant: Large population and close to the capital Brussels which doubles the population. Two teams in the second division and one in the top division – the most successful Belgian club means this area is probably not the best one for an upcoming club.

Liege: Large area and a smallish population with two top division clubs (one being the very well supported Liege) makes this an area to probably avoid.

Limburg: A relatively small population, with two first division teams – one of which – Genk – have a huge following, with the fifth highest attendance in the Belgian top division during the 15/16 season.

Namur: Large area, small population and no clubs in the top two divisions. Limited potential, one to avoid.

Walloon Brabant: A very small area with a small population – although just the one second division team which would be ideal – Tubize. A potential candidate, but the small population will be a problem.

Luxembourg: The largest area with the smallest population, with no clubs in either of the top two divisions. One to avoid.

 
So we’ve narrowed it down to a club in Antwerp or Hainaut. The clubs in each of these provinces are

Antwerp: Obviously based in Antwerp, the second division club have the second largest capacity stadium in the league, with a total capacity of just under 13,000. There looks to be potential to expand the stadium if necessary, and the colours of the club are red and white (that we can relate to Coca Cola). A great fit.

Lierse: Would be another good potential candidate in Antwerp as they have a large stadium that is rarely filled – only 32% of seats were filled on average during 15/16. The fans have a very bad relationship with the owner, so it’s very possible he’d want to sell.

Mechelen: Another Antwerp based team, this time in the top division. They currently play in a stadium with an attendance with a capacity of 13,000 – however is undergoing construction work to take the capacity to over 18,000 making it an attractive proposition for us, although a slightly more expensive club to take over.

Westerlo: The last Antwerp based team, Westerlo have a small stadium (just 8,000 capacity) with an a 77% attendance last season means there’s not much room for expansion. Most likely a poor choice.

Sporting Charleroi: With an average attendance of just 61% of the available 15,000 last season with limited competition in the area, there’s plenty of room for expansion which is good. Again an attractive proposition.

Royal Excel Mouscron: The opposite side of Hainault to Charleroi, but with plenty of clubs in the near vicinity, and a small stadium – 7,500 capacity with an average attendance of just over 3,000 during the 15/16 season makes this an unattractive club.

So out of the six clubs evaluated, four remain a good fit: Antwerp, Lierse, Mechelen and Sporting Charleroi.

Mechelen and Sporting Charleroi are both in the top division, when a second division club would be cheaper to purchase, and have less pressure involved, ruling them both out. Antwerp would be my choice due to the future expansion opportunities and the colours of the club (red and white, perfect for a Cola company!).

So Antwerp it is!

In the next episode i’ll be going through my vision for the empire, and how we’ll go about achieving it, as well as setting ourselves a 4 year plan, hope you join me!

Follow me on Twitter to stay updated for the next episode: @from_the_wing

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