Man City stake sale brings record-breaking valuation
US investment firm Silver Lake has concluded a deal worth $500m for 10% of Manchester City’s parent company
Manchester City’s Emirati owners have agreed to sell a 10% stake in their international football group to US private equity firm Silver Lake for £389.4m, a deal that values the holding company at $4.8bn.
The valuation means City Football Group (CFG) - the Abu Dhabi-controlled business that owns Manchester City FC, along with a collection of other football clubs internationally - becomes one of the highest-valued sporting franchises in history.
“We and Silver Lake share the strong belief in the opportunities being presented by the convergence of entertainment, sports and technology,” CFG chairman Khaldoon Al Mubarak said in a statement.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
The influx of capital will be reinvested to “fund international business growth opportunities and develop further CFG technology and infrastructure assets”, the statement said. CFG is closing on the purchase of its eighth club, Indian Super League side Mumbai City FC, and the new funds will play a part in that venture.
Silicon Valley-based Silver Lake, which considers itself a global leader in technology investing, made its name buying stakes in companies such as Alibaba, Dell and Skype, says the Financial Times, “but has pivoted in recent years to entertainment, with a portfolio that includes the Ultimate Fighting Championship and Hollywood talent agency Endeavor”.
The firm’s managing director, Egon Durban, began talks with CFG in May, and the deal was concluded on Saturday, with Durban and Al Mubarak pictured next to each other during Manchester City’s victory over Chelsea hours after signing. Durban will now become the ninth CFG board member.
–––––––––––––––––––––––––––––––For a round-up of the most important business stories and tips for the week’s best shares - try The Week magazine. Get your first six issues free–––––––––––––––––––––––––––––––
“Silver Lake’s investment will not translate into a huge transfer kitty for Guardiola but instead allow CFG to invest in technology and infrastructure advancements across their network,” The Telegraph reports.
As well as owning Manchester City, CFG owns or has stakes in clubs in the US, Japan, Spain, Uruguay, Australia and China.
Despite the sale, the Emirati royal family still exercises firm control over the group. As The Guardian details, “Sheikh Mansour is still the majority shareholder, owning 77% (down from around 87%), while 12% is held by a Chinese consortium, headed up by conglomerate CMC Inc, which previously had around 13%”.
Silver Lake approved the valuation in spite of the knowledge that Manchester City risk temporary expulsion from the Champions League, after Uefa investigators concluded in May the club has obscured de facto directing funding from its oil-rich owners. A final ruling is expected in December.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
William Gritten is a London-born, New York-based strategist and writer focusing on politics and international affairs.
-
'Virtual prisons': how tech could let offenders serve time at home
Under The Radar New technology offers opportunities to address the jails crisis but does it 'miss the point'?
By Chas Newkey-Burden, The Week UK Published
-
The Week contest: Airport goodbyes
Puzzles and Quizzes
By The Week US Published
-
'We shouldn't be surprised that crypto is back'
Instant Opinion Opinion, comment and editorials of the day
By Justin Klawans, The Week US Published
-
The wit and wisdom of Sven-Göran Eriksson
In Depth The first foreign coach to manage England on football, life and death
By The Week Staff Published
-
The complicated Americanization of European soccer
Under The Radar An increasing number of teams are finding themselves under American ownership. What does that mean for the continent's most popular sport?
By Rafi Schwartz, The Week US Published
-
Major League Baseball is facing an epidemic of pitcher's injuries
Under the Radar Many insiders are blaming the pitch clock for the rise in injuries — but the league is not so sure
By Justin Klawans, The Week US Published
-
The Premier League's spending cap: levelling the playing field?
Talking Point Top clubs oppose plans to link spending to income of lowest-earning club, but rule could prevent success gap from widening
By Harriet Marsden, The Week UK Published
-
The cost-benefit analysis of hosting the Olympics
In Depth Hosting an Olympic Games may not be as economically beneficial as you would think
By Justin Klawans, The Week US Published
-
Can MLB solve its uniform crisis?
Today's Big Question See-through pants and sweat stains draw derision from players and fans alike
By Joel Mathis, The Week US Published
-
Is legalized betting hurting sports?
Today's Big Question A 'building avalanche of gambling scandals' threatens competition
By Joel Mathis, The Week US Published
-
Is this the year women take over March Madness?
Today's Big Question Caitlin Clark, Angel Reese and other stars make the women's game more popular than ever
By Joel Mathis, The Week US Published