NYCFC’s Taty Castellanos loan is proof of the power of multi-club ownership

Valentin “Taty” Castellanos is finally moving abroad — just not in the way many around MLS would have predicted.

NYCFC announced on Monday morning that it has sent Castellanos on a year-long loan to Spanish club Girona FC. On the surface, the move seems a little bit underwhelming. Castellanos won the golden boot and led NYCFC to MLS Cup in 2021; he leaves the club tied for the league lead in goals thus far in 2022. He’s a ruthless finisher, a strong athlete, capable in possession and a tireless worker and runner. By just about any measure, the Argentine has been the best striker in MLS for the last 18 months.

MLS strikers have been trading at a premium in that period. In January, Orlando City moved Daryl Dike, then 21, to English second-division club West Brom for a $9.5 million transfer fee. A couple of days later, FC Dallas sold Ricardo Pepi, who had just turned 19, to German Bundesliga club FC Augsburg for a sum that could reportedly reach $18 million. Last month, the New England Revolution sold Adam Buksa, who has since turned 26, to French Ligue 1 club RC Lens for a reported $10 million fee. Castellanos was objectively better than each of those players in MLS. He’ll turn 24 in October; maybe not quite ideal for the purposes of a potential resale, but he still hasn’t even hit his prime.

Why, then, is he headed on loan to a small, newly-promoted club that is preparing for just its third-ever season in La Liga?

It’s not due to lack of interest. According to NYCFC sporting director David Lee, Castellanos’ club has been fielding offers from South American and European clubs for the better part of the last year-and-a-half. Brazilian club Palmeiras made an attempt to sign him early in 2021, Argentine giants River Plate were reportedly interested this winter and rumors swirled about English Premier League club Leeds United making a play for him this summer, but no one made an offer that came all that close to the $15 million that a source said NYCFC was seeking.

Lee attributed the discrepancy to the European transfer market still not having fully recovered from the financial effects of the pandemic and his belief that European teams underrate the quality of MLS. He also pointed out that MLS teams, despite spending significant sums on them in recent years, haven’t been able to sell many South American players to Europe. Lee thinks the lack of such a track record led to European teams undervaluing Castellanos. It’s been more en vogue in the last few years for European clubs to move for 18-, 19- or 20-year-old players who developed in MLS academies, with each successful move creating a more robust market for said players. That process hasn’t really begun yet with MLS’ South American signings.

“We’ve had no offers that we felt matched the value of the player,” Lee said. “So we were left with a few choices, really: we could either try to keep the player in New York, but I think having kept him for so long now, I think it was quite clear that that would have been a difficult solution; we could sell for a value that we felt was less than where we believe his value is given how good we think he is; or we could try and find some different avenue to raise his value.”

New York had a relatively clear path to that third option. NYCFC and Girona are both primarily owned by City Football Group (CFG), the Abu Dhabi-controlled holding company that also owns English Premier League champions Manchester City and a network of other clubs around the world. Their shared position within CFG means that NYCFC and Girona can work together with a degree of confidence and trust that would be difficult to achieve between clubs that aren’t affiliated with each other.

NYCFC is deferring a payday by loaning Castellanos instead of selling him, but the club is betting that a full season of playing time in what many consider to be the best league in the world will significantly raise his value. Girona isn’t expected to do much this season, but if Castellanos can simply show he belongs at the La Liga level, NYCFC could sell him following the expiration of his loan next summer for much more than the $15 million the club sought this year. And because they’re both in CFG, NYCFC can count on Girona to give Castellanos proper training and a fair shot at playing time in a way that they might not have been able to had they loaned him to an independent club.

“This is some of the power of being within City Football Group,” Lee said. “If he performs well, as we expect him to, then the valuation that we’ve got on the player now will look a lot different than it will in 12 months. So this is a sort of strategic decision for us that we think will ultimately help maximize his value. It’s an opportunity for him to play in Europe, which has been something that he’s really wanted, but really the decision came from us saying that we think this is a smart idea to try to strategically raise his value above the level that we’ve seen so far from European clubs in this transfer window.”

“There’s a risk, but we think it’s a relatively small one,” Lee continued later. “I have no doubt that he’ll go to Europe and play fantastically well and show people what a great player he is. I think there’ll be teams who will look back 12 months from now and say they wish they paid the valuation that we’re asking for him now.”

Lee declined to disclose the fee that NYCFC will receive for loaning Castellanos. Depending on that figure, the club might be able to convert some of it into general allocation money, which it could then use to increase its flexibility under the MLS salary budget.

This isn’t the first time Castellanos has been a part of this kind of move. His arrival in New York was in a similar vein, on a short-term loan from CFG-owned Club Atletico Torque in 2018 (the club has since rebranded to Montevideo City Torque). NYCFC purchased his full rights following the 2018 MLS season. Over the next three-plus years, he developed into one of the league’s brightest talents and significantly raised his transfer value, albeit not quite as high as NYCFC hoped.

The sale of winger Jack Harrison by New York to Manchester City in January 2018 was also along the same lines. Upon being purchased by City, Harrison was immediately loaned out, initially to Middlesbrough, then to Leeds. He helped Leeds win promotion to the Premier League in 2020, and, after a third year on loan, was purchased by the club from Man City for a reported fee of $15 million last July.

“This is something that City Football Group do all the time,” Lee said. “It’s less often from New York, but this is something that CFG do all the time in terms of buying talent, then loaning them out to give them a platform that we think is going to increase their value.”

NYCFC’s effective use of the group’s scouting network and financial power occasionally draws eyerolls from some executives around MLS who try to write-off the club’s success as mainly down to CFG, but the fact is that Lee and his staff do a very good job, both of leveraging their built-in advantages and of finding value on their own.

And it’s not as if they’re the only team in the league that’s part of a multi-club ownership model. Chicago Fire owner Joe Mansueto also owns Swiss club FC Lugano; Colorado Rapids owner Stan Kroenke owns Premier League side Arsenal; D.C. United owners Steve Kaplan and Jason Levien own EFL Championship club Swansea City; Inter Miami owner Jorge Mas owns Spanish second-division outfit Real Zaragoza; CF Montreal owner Joey Saputo chairs Italian Serie A club Bologna; Real Salt Lake owner David Blitzer holds a stake in a number of European clubs, including Augsburg and the Premier League’s Crystal Palace; the New York Red Bulls are part of a global network of teams that includes regular UEFA Champions League participants RB Leipzig and Red Bull Salzburg.

None of the above groups operate at the scale of CFG, which owns controlling stakes in 11 clubs around the world, but, apart from Red Bull, they’ve still done very little to take advantage of their own multi-club networks. The lack of mileage that Kroenke and Saputo, in particular, have gotten out of owning clubs on two continents is somewhat stark, though the recent sale and subsequent loan of Auston Trusty from the Rapids to Arsenal and then to Birmingham City may be a sign that change is coming for Colorado. To better compete, all would be wise to try to get more out of the enhanced scouting, analytical and player movement possibilities that come with being part of groups of multiple clubs.

Though the club has an open designated player (DP) spot, NYCFC doesn’t necessarily feel the need to go out and sign a replacement for their departing star. Even without Castellanos, NYCFC still has a stable of talented attackers, including striker Héber, who scored in the team’s 2-0 win against Miami on Saturday. One of the most efficient forwards in the league, the 30-year-old Brazilian had 15 goals in 22 regular season appearances in 2019 before a torn ACL derailed him in 2020. He returned to the field only in a supporting role late last season, but he’s firing again this year, scoring six times in just 478 regular season minutes to give him an eye-popping 1.13 goals per 90 minutes played.

Budding star Talles Magno, who has five goals and eight assists in 21 games as a winger this season, is also capable of playing as a No. 9. NYCFC signed the 20-year-old to a DP deal last spring in part thanks to some of the advantages the club enjoys as part of CFG. Attacker Santiago Rodriguez, who has two goals and nine assists this year, has even more direct ties to City Football Group, having arrived in New York last year on loan from Montevideo City Torque, the same club that Castellanos initially came from. Brazilian wingers Gabriel Pereira and Thiago Andrade, who each have four goals in limited regular season minutes, will also play large roles in NYCFC’s attempt to replace the production of Castellanos, as will veteran No. 10 Maxi Moralez. That kind of depth is almost unheard of in MLS.

“There are still a couple of weeks left in the transfer window, so while the market’s open, we’ll look,” Lee said. “However, I think our starting point is that we’ve got a number of attackers who probably feel like they should’ve played an awful lot more than they have so far this season, but haven’t by virtue of the strong and deep roster of attacking talent that we’ve managed to put together. I feel completely comfortable that if we don’t bring somebody in to replace Taty that we have enough firepower and goals and attacking threat that we can go win the championship again this year. Heber is a fantastic No. 9. He had an unfortunate injury and maybe people forgot a little bit how fantastic he was when he came into the league in 2019, but there’s no reason, in my opinion, why he can’t get back to that level of production.”

One of the biggest narratives around MLS is how it is becoming more of a selling league, but, for teams like NYCFC with expectations of contending for trophies, selling isn’t enough. There must be a good succession plan in place, too. NYCFC, which has been preparing to move Castellanos for the better part of 18 months, clearly had one of those, even if their star striker’s exit didn’t go down exactly as the club expected.

“We were kind of imagining that Taty was going to leave in January,” Lee said. “We re-signed Héber to a new contract in November of last year knowing that. But we ended up having Taty for the first six months, we have two unbelievable strikers on our books, but that all factored into the decision. And that’s not easy to do in MLS. You’ve got to have real confidence in your roster to say, ‘OK, we’re going to dedicate this amount of the salary cap to a player who won’t get his opportunity unless another player leaves,’ but we look at that as something that we need to do.”

(Photo: Brad Penner / USA TODAY Sports)