New York City FC has entered a brave new world and plenty of eyes are watching.
The club’s majority owner is the City Football Group (CFG). It owns Manchester City among others and, from the moment the Yankee Stadium-based club was established in 2013, its relationship to the mother ship and, in particular, its Premier League club, has raised questions. Would NYCFC be a feeder team? A dumping ground for castoffs? Was the investment by CFG a way to skirt financial fair play (FFP) rules?
There has never been any doubt about links between the two clubs but, for the first three years of NYCFC’s existence, the flow of players and resources was primarily in one direction: From Manchester to New York.
NYCFC manager Patrick Vieira arrived fresh from leading Man City’s reserve team, for example, while numerous players have gone to England to train during the offseason. Man City midfielder Yangel Herrera is in the midst of a two-year loan with NYCFC.
But in the past week, a pair of transactions has cast the relationship between the two teams in a new light. First, there was the announcement — by apparel company Umbro, not Man City — that U.S. international midfielder Mix Diskerud had signed a four-and-a-half-year contract with Man City.
Then NYCFC midfielder Jack Harrison joined Man City for a fee of around $6 million, according to ESPN FC sources, with the potential for add-ons. He was immediately loaned to Championship side Middlesbrough.
The Diskerud deal, which an ESPN FC source has confirmed but is yet to be publicly acknowledged by Man City, has caused head-scratching. Last year, Vieira was so eager to get rid of the midfielder that, in accordance with MLS roster rules, NYCFC exercised a buyout of the player’s contract. But the term “buyout” is something of a misnomer.
Practically speaking, it removed Diskerud’s hit on the salary cap for the remainder of the contract, though NYCFC was still on the hook to pay him the approximately $1.5m he was due over the deal’s remaining two years. In March 2017 he moved on loan to Swedish club IFK Gothenburg and, when no permanent deal was forthcoming at its conclusion, his MLS contract was terminated.
A source with knowledge of the Man City deal said that Diskerud will not train with the first team nor will he be loaned to another CFG affiliate, adding that the aim is to sell or loan him again. Meanwhile, as far as MLS is concerned, the deal complied with league rules and no competitive advantage was gained since Diskerud’s cap hit had already been handled by the buyout.
“The transaction was entirely consistent with our league rules, which allow teams to buy out or absorb the cost of a player’s contract in the offseason and free up the salary budget space,” MLS executive vice-president Todd Durbin told ESPN FC.
Meanwhile, where Harrison is concerned, Stoke City were reported to be frontrunners for his signature, only for Man City to intervene at a reportedly lower initial fee.
The Diskerud and Harrison deals seem to follow the same general blueprint as that which saw Australian international midfielder Aaron Mooy join Man City in 2016 from Melbourne City — another member of CFG — before being loaned and later sold to Huddersfield for $14m.
Why do things this way? For City, any future sale helps them comply with FFP rules although, in the case of Diskerud, his potential impact seems likely to be almost nil. Harrison has more upside.
The benefit for NYCFC is that its financial responsibility to Diskerud has now been removed and, per league rules, it gets to keep half the Harrison fee, though only $750,000 — up from last year’s mark of $650,000 — of that can be applied to the salary cap.
In terms of how the deals are being viewed in MLS circles, opinions vary. One MLS executive, who asked not to be identified, said when asked to comment on the Diskerud deal: “It’s CFG’s business. They can account for [his contract] however they want.”
The same executive said the Harrison deal was a “great transfer” and, beyond Man City taking a player from an affiliated club, the fact that there was competition shows the pull of MLS.
“Stoke was interested and so was Middlesbrough. If young MLS players can command that kind of a fee, then that’s a market that we want to participate in. That shows a respect for the valuation of players in our league that is frankly heartening. The mentality is changing that it’s not a sign of weakness if we sell our players. It’s a sign of efficiency. There was enough smoke there that I think there was legit interest from other parties.”
But to others, both transactions invite a healthy dose of skepticism.
“Man City is a clearinghouse; that’s exactly what it is,” said one MLS executive, who asked not to be identified. “The Mix Diskerud thing, Man City is signing him because they see something special in him? It’s a joke. My question is: Do you think Jack Harrison is going to play at Man City? I don’t. So why are you buying him internally? I don’t believe Stoke were willing to pay that much for him. It’s really fishy when you have a [sister] club doing that for a player that is never going to play there.”
MLS insists it is vigilant about ensuring there is no “blending of resources” or other financial sleight of hand when it comes to its teams with sister clubs, though that usually applies to players coming in, not those going out. The only other MLS team to which this scenario could apply is the New York Red Bulls: Red Bull GmbH also owns Austrian side Red Bull Salzburg and RB Leipzig from Germany.
It has always been the case that the league is duty-bound to make sure it gets fair-market value for its saleable assets, given its single-entity structure and control over player contracts. But the Harrison and Diskerud deals mark a new challenge.
Jeff Carlisle covers MLS and the U.S. national team for ESPN FC. Follow him on Twitter @JeffreyCarlisle.