Goals Soccer Centres is creating a joint venture with the owner of Manchester City to accelerate the growth of its five-a-side football brand in North America.
The East Kilbride-based firm said its two existing sites in California, along with its pipeline of developments, would transfer to the 50:50 venture with City Football Group (CFG), which is owned by Sheikh Mansour.
• READ MORE: Goals eyes ‘dozens’ of US sites as sales accelerate
Under the tie-up, CFG – which also owns the New York City and Melbourne City clubs – will provide $16 million (£12.3m) of expansion capital to fund an “ambitious” programme of new openings on the other side of the Atlantic. Goals is currently building a third site in California and has four more in the pipeline.
The joint venture will also be allowed to use brands including Manchester City to drive its marketing activity.
Analysts at house broker Canaccord Genuity said: “We estimate that the combination of funds and cashflow should be sufficient to develop a portfolio of 16 centres over the next seven years.
This is a transformational agreement for our company to grow and strengthen the North American businessNick Basing
“Goals could have sought a financial partner or a property company but neither option could bring the consumer visibility or football gravitas that CFG brings.”
Goals has previously flagged the potential to run “dozens” of sites across the US, where it opened its first facility in Los Angeles in 2010.
Chairman Nick Basing said today: “I am delighted we have concluded our new partnership with City Football Group which will transform the prospects to expand our North American estate.
“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, chief executive of CFG, added: “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 joint venture with Goals, ownership of New York City FC in Major League Soccer and many other initiatives.”
The joint venture was launched at Goals’ Pomona facility in Los Angeles, where Basing and Soriano were joined by new Manchester City signing Danilo and teammates including Leroy Sane, Yaya Toure and Nicolas Otamendi.
Soriano said: “This initiative shows City Football Group’s continuing commitment to soccer in North America. This partnership with an excellent and recognised operator like Goals gives us the best opportunity to succeed.”
The deal was announced as Goals, which has a further 46 sites across the UK, reported a 2 per cent rise in group sales to £17.3m for the first six months of its financial year.
The firm hailed “encouraging” early results from the revamp of centres in Glasgow and London, with more locations in Wembley and Leeds to be overhauled under its “Clubhouse 2020” strategy by the end of next month.
It also told investors that early-stage talks over a possible merger with Paisley-based rival Powerleague, revealed in April, have “currently been concluded”, but Canaccord Genuity said management were “leaving the door open to resume talks at a later date”.
“There is only so much a management team can deliver at once and this is a deal too far for the moment,” the broker added.
• READ MORE: Goals confirms merger talks with rival Powerleague
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.”
Goals chief executive Mark Jones added: “We continue to make progress reinvesting 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 USA.”
Goals is scheduled to publish its half-year results on 12 September.