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.
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.
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“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.