Foreign money is reshaping the A-League. The benefits come with strings attached

When the A-League launched in 2005, Matthew Galea tried to embrace Melbourne Victory. But for whatever reason, it never really felt right to him. It wasn’t until five years later, when rivals Melbourne Heart were introduced to the competition, that he found a team that did.

Melbourne Heart was specifically conceived for people like him, as if they were presenting a slightly more cerebral, European-flavoured alternative to Victory, whose early identity was pinned to star players such as Archie Thompson and Kevin Muscat.

Heart were a bit of a work in progress, and that is what appealed to Galea, who nailed his colours to their mast. He went to games with mates, joined pre-match marches to AAMI Park and found something of a community within the Heart’s fledgling fanbase.

Then, without warning, everything changed.

On January 23, 2014, it was announced that Heart had been purchased by the City Football Group, becoming the third club in CFG’s sprawling international multi-club network, alongside Manchester City and New York City FC.

Nobody in the game had any inkling this was coming. Galea remembers the day well; he was working as a journalist for the Shepparton News and looked at one of his colleagues, who was also a Heart supporter, with confusion.

At first, even as a long-time Manchester United fan, he thought he could live with it, if it meant stable ownership for the club he had grown to love.

Then, a few months later, the club’s name was changed to Melbourne City, and their colours from red and white to Manchester City’s light blue – the same shade he had spent many years hating.

That severed the connection for Galea.

“Once the colours changed, I’m like, ‘Well, this isn’t what I started supporting,’” he said.

“The fact that it’s now a club that I loathe just made it that little bit easier, I guess – but they could have changed it to yellow and given it another name, and I would have felt the same way.”

City became a more stable club, and much more successful on the field. They had not won anything as Heart, but as Melbourne City, with CFG’s resources and worldwide connections behind them, they swiftly became an A-League powerhouse, with facilities and systems envied by the rest of the competition.

Their involvement within the Australian game has had enormous benefits for players like Socceroo Patrick Beach, who now plays for Troyes, CFG’s club in France, and coaches like Ange Postecoglou, who relaunched his career after leaving the Socceroos at Yokohama F. Marinos, a CFG partner club.

But Melbourne City’s average crowd numbers have declined since the Heart days, despite the trophy-laden years that followed, suggesting that success in and of itself is not enough to foster a connection between a club and its support base.

People like Galea, who still follow the A-League, but no longer support a club - were collateral damage; the unfortunate price of Melbourne City’s transformation.

A necessary evil for the A-League?

Alienating supporters is just one of the risks when a football club becomes part of something much bigger than itself.

Multi-club ownership has exploded over the past decade. Football Benchmark estimates there were 152 MCO groups involving 380 clubs worldwide in 2024, up from just 18 groups and 40 clubs in 2012. More than half of the A-League’s 12 men’s clubs are either part of a formal MCO group, are owned by parties who also hold stakes in clubs in other countries, or have some kind of ongoing cooperation agreement with a foreign club.

The benefits are obvious. Australian soccer is chronically short on capital, and locally based ownership groups are increasingly difficult to find. The A-League needs reliable club owners who are prepared to lose money, but who also have deep and sophisticated knowledge of how the game operates, here and abroad, to assist with development, recruiting and player sales to leverage the global transfer market.

MCOs tick all of these boxes, and the A-League is ripe for this model. Licences to play in the competition are cheap by global standards, operating costs are modest, and the salary cap enforces a degree of certainty upon one of a club’s biggest expense lines. Australia’s growing reputation as a producer of talented young players and status as a safe, English-speaking country make it an appealing place for international ownership groups to do business.

“We have numerous international owners and multi-club owners in our competition, and we think that’s a really good thing,” said A-League chief executive Steve Rosich.

“I think on balance, it’s only positive, because there’s always risk with investment. Pound for pound, there’s probably less risk with a well-resourced international owner that understands sport, and understands football in particular.”

In the best-case scenario, everybody wins. But in reality, the interests of an MCO network and a club within it are not always aligned.

When a single club becomes a cog within a larger system, tensions can emerge. Is the club’s primary ambition to achieve success, or to advance the aims of the bigger, more valuable clubs within it? If a talented player emerges, is the priority to secure the best possible outcome for the club that developed them, or the best outcome for the group as a whole?

And if trouble erupts elsewhere in the network, can the damage really be contained to where it happened?

Ripples from Manchester to Melbourne

The crisis engulfing Manchester City is still unfolding, but has the potential to cause ripple effects for the other nine clubs it owns who form part of the City Football Group.

Manchester City were found guilty of 114 of the 115 charges levelled against them by the Premier League, with an independent commission concluding that the club used “sham” commercial arrangements and other schemes to artificially inflate revenues and reduce costs by more than £900 million (1.718 billion) over nine seasons, circumventing rules against such levels of spending. The club was also found guilty of failing to cooperate with the investigation and masking payments to some players and coaches.

Sanctions have not yet been announced, and Manchester City have launched an appeal.

The findings raise another big question, one with global implications. England’s new Independent Football Regulator has powers the Premier League does not: under certain circumstances, if it determines an owner is unsuitable, it can force them to sell a club. It remains to be seen if such action will be taken against Manchester City’s owners, but it’s not impossible.

If that occurs, what happens to Melbourne City and the rest of the CFG empire?

City’s network is considered the gold standard when it comes to MCOs. It includes nine other clubs, from Brazil to Italy to China, enabling them to turn a collection of otherwise totally unrelated football teams into a global platform, spreading costs and expertise while expanding sponsorship, scouting and player development opportunities, making it easy for players to transfer from one club to another.

But in the absence of that flagship club at the top of the tree, whose image has been mirrored in the names, colours and branding of many of the others, the strategic rationale for retaining the rest of the empire would fundamentally change. The nine other CFG clubs would not suddenly become worthless, but their owners would have to ask what purpose the network now served, and whether keeping each of them still made sense on their own merits.

It’s a question for another day, and it could be that the doomsday scenario never comes to pass, but the fact it can be asked shows how problems at one club can have flow-on impacts elsewhere within an MCO.

Melbourne City insists it is business as usual, but the separation between them and Manchester City is not absolute. Simon Pearce, Melbourne City’s vice-chairman, an APL director and one of the most influential figures in Australian football, is also a Manchester City and CFG board member, and appears throughout material examined in the Premier League proceedings, notably providing a quote in a leaked email which many feel encapsulates City’s institutional disregard for regulations: “We can do what we want.”

For now, the APL are sitting tight and waiting for more information.

“There’s a redacted report at this point in time, so that’s something that will evolve, and we’ll continue to monitor that, and I’m sure the whole football world will monitor it,” said Rosich.

A ceiling on ambition?

One of the fundamental pleasures of supporting a football club is the licence to be completely unreasonable about the future.

Fans of an A-League club, for instance, should be allowed to dream about their team winning the title, then conquering the AFC Champions League Elite, then qualifying for the new FIFA Club World Cup and, however preposterously, becoming champions of the world.

It doesn’t have to be realistic – it just has to be theoretically possible.

MCOs, by their very nature, complicate this unspoken bargain.

As soon as a club becomes part of an MCO, and sits in a hierarchy below bigger, richer, stronger clubs, the outlook changes. It may not be the owner’s ultimate goal for that smaller club to become the best possible version of itself. Sometimes, a smaller club can become valuable partly because of the role it can play for others further up the chain.

There is a textbook example of this elsewhere in CFG. French club Troyes joined the family in 2020 – but for long-time followers, the journey thus far has not been enjoyable.

Many Troyes fans believe they have been reduced to a mere satellite branch of CFG rather than a club for which success is the primary ambition. The best example is the Brazilian winger Savio, who they signed for a club-record fee in 2022 – but he was immediately loaned out to PSV Eindhoven, then fellow CFG club Girona, before joining Manchester City’s first team and later being sold to Tottenham Hotspur. This, they argued, was clear evidence that Troyes was being used as an accounting vehicle, where talent would come and go for the ultimate benefit of Manchester City.

CFG also stripped Troyes’ squad of experienced, battle-hardened players and prioritised youngsters, who they could develop and then sell - but it came at the expense of results, as they suffered back-to-back relegations, and at the expense of former Melbourne City coach Patrick Kisnorbo, who was elevated from within the group and tasked with overseeing this shift in strategy. He was eventually sacked, but the supporter discontent continued to fester, with fans throwing flares on the pitch during a match in 2024 and ironically chanting “Merci, City”. While they’re now back in France’s top division, the suspicion about CFG’s motives remains.

Which brings us to the latest A-League club to join an MCO: the Central Coast Mariners.

Total Soccer Growth Holdings (TSG), led by Malaysian businessman Ruben Gnanalingam, took control of the Mariners in July – a welcome development which put to bed questions about the club’s ongoing viability. TSG is also the majority shareholder of Queens Park Rangers in England and owns a stake in Major League Soccer club Los Angeles FC, and has made no secret of its “ambitious multi-club vision” built around youth development and global opportunity.

What remains unexplained, until now, is the strategy behind some of the Mariners’ recent signings, many of whom are young, unproven and a little bit puzzling on face value.

Among them are Jamaican defender Daniel Scarlett, 19, Japanese attacker Taiyo Hisamatsu, 19, and English forward John-Kymani Gordon, 23. There’s also an 18-year-old Nigerian goalkeeper, Rufai Abubakar, who is highly unlikely to unseat former Socceroo Andrew Redmayne from the starting line-up, but is taking up a precious foreign spot regardless. All up, their squad is believed to be the youngest in the 50-year history of national club football in Australia, with a large portion of last season’s squad having moved on.

There is nothing inherently bad or improper about this recruitment model - and particularly at the Mariners, who have become famous in recent years for their ability to unearth hidden gems from around the world. On the limited evidence of their season-opening 2-2 draw against reigning premiers Newcastle Jets, they might fare much better on the field than many people expected.

But, as with Troyes, it does raise natural questions about whether TSG’s main focus is helping the Mariners win another trophy by signing the best possible players, or if they are now primarily geared towards selling youngsters.

Mariners sporting director Matt Simon said TSG were attracted to the club specifically because of their ability to balance both objectives, and that their new strategy had not been enforced on the club but had widespread support behind the scenes.

“We’re trying to get the best young talent, either in Australia from our own academy, or from around the country, or even globally now, with the reach and and the network that’s in place, to identify good young players that can come in, help a team, and develop them with potential resale value,” Simon said.

“The way things are moving in football around the world, it’s a young man’s game. The foreigners that were brought in, we believe that they’re good players. It’s potential, and it’s up to us to develop them and put them in the right environment to try and get the best out of them. Hopefully they all work out.

“We’re all in on this as a club. I keep hearing these other A-League clubs losing so much cash and complaining, they spend so much money on older players and they don’t even make the finals, and some even finish last.”

Whatever happens, it’s better than going out of business.

The best of both worlds?

The other A-League club in Melbourne may have found a comfortable middle ground, but only after narrowly avoiding what could have been a fatal disaster.

In 2022, Miami-based private investment company 777 Partners bought a minority stake in Melbourne Victory, introducing Bonza Airlines - the short-lived low-cost airline which 777 also owned - as the team’s front-of-shirt sponsor.

777 was trying to build another MCO, having acquired stakes in several top-level European clubs, although they failed to complete a deal for 94.1 per cent of Premier League club Everton after failing to meet approval conditions. That, in retrospect, was a huge red flag. The group collapsed two years ago, and former chief executive Josh Wander last week pleaded guilty to fraud charges, having swindled $500 million from private lenders and investors by falsifying bank statements and other misleading conduct. Wander will be sentenced in March and faces up to 40 years in jail.

After cutting ties with 777 and somehow escaping without any damage, Victory effectively replaced them with Tony Bloom, the gambling tycoon behind the rise of Brighton and Hove Albion, and whose wife is from Melbourne.

Bloom is regarded as one of the shrewdest minds in football. He also owns stakes in Scottish club Heart of Midlothian and Belgian club Royale Union Saint-Gilloise, but none are owned by a common holding company or a formal MCO structure. They share information, and all have access to Jamestown Analytics, Bloom’s predictive data and analytics company, which helps them uncover outliers in player and coach recruitment. But there was no expectation they should change their identity or otherwise be subordinate to Bloom’s other clubs.

As Victory’s managing director Caroline Carnegie put it, they have all the benefits of MCOs without any of the downsides.

“We didn’t have the best partnership when we started to go down this route in 2022. We didn’t get it right, obviously, the first time,” she said.

“But we absolutely had a great experience even going through the process with Tony and his team, who at every step along the way, were very conscious of making sure any of the decisions or any of the agreements that we were seeking to reach were going to be in the best interest of Melbourne Victory.

“We’re still Melbourne Victory, but we have this amazing wealth of knowledge and experience that we can tap into both through Tony and his advisers and the other clubs that he has an interest in.”

In June, former star player and reigning Johnny Warren medallist Juan Mata also became a minority shareholder. Mata, 38 and now happily retired, is also a part-owner of Major League Soccer side San Diego FC – giving Victory, through him, even broader networking reach.

Carnegie said she was excited to see other A-League clubs branching out in this direction, arguing there was nothing inherently wrong with the idea of MCOs.

“It’s about picking the right partner for the right reasons,” she said.

“For us, the one thing that is very important, which is maybe different to others, is that Melbourne Victory will always be Melbourne Victory, and that was a very important part of looking for any investor for us. Other clubs may have a different view of that, but that traditional multi-club ownership where everyone falls under the same brand is a very different model to the one that we’ve got.

“That’s not to say it’s better or worse for others, but for Melbourne Victory, that was really important to us.”

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