Manchester City and the New York Yankees have joined forces to establish a $US100 million ($NZ122.5m) Major League Soccer team.
New York City Football Club will be the MLS's 20th team and is set to start playing from the 2015 season.
"This is not a marketing gimmick," City chief executive Ferran Soriano said in a conference call on Tuesday. "This is about developing a team that will play very good football and will have a chance to win."
City, which is owned by Sheik Mansour bin Zayed bin Sultan Al Nahyan of Abu Dhabi, will be the majority owner of the team.
The venture is being launched by City amid difficulties in England after the team failed to win a trophy in the 2012-13 season, leading to manager Roberto Mancini being fired.
Soriano said it wasn't a mistake to award Mancini a new five-year contract after City won the Premier League title in May 2012, ending the team's 44-year English title drought.
"We don't think we are under any instability," Soriano said. "We are changing the manager as it happens in other clubs. We feel confident that we will have a good manager and a very good team next year. And I don't think anybody made a mistake on this.
It's just, as normally as it happens in football, time to change for the good."
City is in need of new revenue streams to help comply with UEFA's Financial Fair Play rules, which are designed to curtail over-spending by wealthy owners and require clubs to eventually break even on football-related activities.
But heavy spending led to City losing 90 million pounds ($US137 million) in the 2011-12 financial year with transfer fees since the club entered Abu Dhabi ownership in 2008 went beyond 580 million pounds ($US880 million).
"This obviously has nothing to do with Financial Fair Play," Soriano said. "We are building a team in New York that will be sustainable and we will be investing here with the idea of recovering our investment and being a club that will be financially sustainable, the same way that our club in Manchester is becoming sustainable every year more, right?
"So we don't have any problem with the Financial Fair Play rules, and the New York team has nothing to do with it."
There is a chance the New York club will serve as a feeder team for City, while young players unable to break into the Premier League squad could be loaned the other way.
"I think naturally it will happen, that some Manchester players will end up playing in New York," Soriano said. "But the objective and the focus will be to try to find the right players for the New York team. The New York team is a team on its own."
Yankees President Randy Levine will be the lead executive responsible for launching the club.
"They'll be running all the soccer," Levine said. "We know our way around New York, how to get things done."
The expansion fee for the new team is $US100 million. It will compete for attention, and dollars, with 10 other professional major sports teams in the New York market.
NYC FC will start play at an interim venue with one option being the New Yankee Stadium, which opened in 2009.
The venue hosted its first two football matches last year and is the site of a friendly on Saturday between City and Chelsea. The original Yankee Stadium was the home of the North American Soccer League's New York Cosmos in 1976.
The new team is intended to spark a rivalry with the New York Red Bulls, who play in Harrison, New Jersey.
"The Red Bulls now will have a rival here in the market providing them with that derby-like competition that is such a driver of what makes football so successful around the world," said MLS Commissioner Don Garber, calling the addition of a second New York team a "big transformational event."
The Yankees have long been exploring football deals. A partnership with Manchester United was announced in 2001, but that turned into a now-expired licensing and broadcasting agreement in which the clubs sold each other's licensed goods and exchanged television programming. The Yankees' YES Network has broadcast Arsenal games on a delayed basis since October 2010.
Legends Hospitality, co-owned by the Yankees, Dallas Cowboys and Checketts Partners Investment Fund, takes over hospitality and catering at Manchester City's Etihad Stadium next season under a partnership with Jamie Oliver's Fabulous Feasts that was announced in January. Legends already has started work on premium seats sales.
With the decision completed on team No. 20, MLS can turn attention to No. 21.
Former Los Angeles Galaxy star David Beckham, who plays his final game this weekend before retiring, has an option to buy an MLS expansion team at below cost. Miami appears to be a possible market.
"It's just premature," Garber said. "Clearly, we've got to finalize a long-term expansion plan for the league."