Tie-up with Manchester City owner
Goals nets deal with US global football operator
Five a side football company Goals Soccer Centres has signed a joint venture with the owner of Manchester City and New York City football clubs to expand its operations in North America.
East Kilbride based Goals, which has 48 sites including two in California, said the deal with City Football Group will see all of its existing and planned North American operations transfer to the joint venture.
CFG is injecting an initial $16 million into the venture which combined with cash flow will self-finance an ambitious programme of site openings. The new identity to be launched later this year.
CFG is the owner of football-related businesses in major cities around the world, including football clubs, academies, and technical and marketing companies. The group includes football clubs on five continents, including Melbourne City in Australia, Yokohama f Marinos in Japan and CA Torque in Uruguay.
The Joint Venture will be led by a six-member board, chaired by Goals’ chairman Nick Basing.
Goals will now focus its UK cash flow on investment in the Arena and Clubhouse modernisation projects in the British market. It said talks with rival operator Powerleague about a possible tie-up had “concluded”.
The joint venture will be launched today at Goals Pomona in Los Angeles by Mr Basing and Ferran Soriano, CEO of CFG, who will be joined by a number of Manchester City players including new signing, Danilo, as well as Leroy Sane, Yaya Toure and Nicolas Otamendi. The club is on a US tour.
The profit before tax associated to the assets which are being transferred into the Joint Venture by Goals was £200,000 for the 2016 period, with the company’s profit before tax expected to reduce by the same sum in the current year as the joint venture’s earnings will be consolidated on a proportionate basis.
As at 31 December 2016, the reported book value of those assets being transferred into the joint venture by Goals was £8.2m. It is expected that as new sites are opened those new sites will make an increasing contribution to the company’s profits. Goals will not receive any additional proceeds from the transfer of its North American operations into the joint venture.
CFG is a holding company established in 2013 to oversee the creation and administration of a network of linked football clubs and other footballing operations.
It is run as a holding company under parent company the Abu Dhabi United Group Investment & Development Limited together with Chinese part-owners China Media Capital and CITIC Capital. CFG currently owns a number of football clubs, including Manchester City in the English Premier League, New York City which plays in Major League Soccer and Melbourne City playing in the Hyundai A-League in Australia.
Mr Basing said the joint venture “will transform the prospects to expand our North American estate”.
He added: “This is a transformational agreement for our company to grow and strengthen the North American business. We are delighted to be partnered with a global leader in soccer and believe the combination will give us significant competitive advantage at a time when the emerging market is in its infancy.”
Ferran Soriano, CEO of CFG said: “This is a very exciting development for our plans in the US and Canada. Soccer is indisputably the world’s number one sport and growing fast in this region. We have an ambitious vision in North America to grow the sport, including our JV with Goals, ownership of New York City FC in MLS and many other initiatives.
“This initiative shows City Football Group’s continuing commitment to soccer in North America. This partnership with an excellent and recognized operator like Goals gives us the best opportunity to succeed”.
Goals also announced that sales for the period increased by 2% (H1 2016: -0.5%) to £17.3m (2016: £17.0m)
Like-for-like sales for the period increased by 1.4% (H1 2016: -1.9%). It said it continued to make good progress in growing and innovating the UK estate and that 223 of its arenas have been have been fully reinvested. A further 25 are planned for the second half.
The first “Clubhouse 2020” opened at Ruislip in April and Beckenham and Glasgow South have also been completed. Initial trading and analysis is described as encouraging. Wembley and Leeds will be completed by the end of August;
The further rollout of Clubhouse 2020 will recommence following a full evaluation of the investment returns from the initial five clubs;
US operations have been successfully restructured with a lower cost base; the second club Pomona launched in Q1 and our third club is under construction and scheduled to open at the year end.
Mr Basing said: “With the necessary overdue investment being made in our UK estate and a refocus on our consumer proposition, I am pleased to see some early signs of top line momentum. However, the UK consumer economic environment remains uncertain in the medium-term outlook.
“I am delighted we have concluded our new partnership with City Football Group which will transform the prospects to expand our North American estate.”
Mark Jones, chief executive said: “We continue to make progress re-investing in the business to offer our customers a premium product. We are a substantial way through the programme to upgrade the pitches and have now embarked on phase two of giving customers an enhanced clubhouse experience in which they wish to spend time.
“The company is totally focused on delivering attractive returns for shareholders from its assets and the opportunities in the UK and US.”