Manchester City owners sell stake in club and secure record valuation

27 November 2019

MCFC
Photo: Getty Images Silver Lake is now the third-largest stakeholder in what has come to be the world's most valuable holding company administering association football clubs.

US private equity firm Silver Lake has acquired a stake of just over ten per cent in City's parent company for $500 million, valuing it at $4.8 billion.

The firm is now the third-largest stakeholder in what has come to be the world's most valuable holding company administering association football clubs.

Emil Gjerding Nielson nielson@offthepitch.com

Manchester City's owners have sold a stake of just over ten per cent in the club's parent company for $500 million to the US private equity firm Silver Lake. This development, which places a value of $4.8 billion on the holding company, makes it the world's most valuable among those administering association football clubs.  

Having built its business on investing in technology and entertainment firms like Alibaba, Dell and the Ultimate Fighting Championship, Silver Lake is now the third-largest stakeholder in City Football Group (CFG), which also owns other clubs such as the New York City Football Club and Melbourne City Football Club. 

Football clubs are increasingly attracting interest from American hedge funds looking to capitalize on clubs' rising profitability. Elliott Management, a $38.2 billion American hedge fund, last year took control over AC Milan. 

"Silver Lake is a global leader in technology investing, and we are delighted by both the validation that their investment in CFG represents, and the opportunities for further growth that their partnership brings," the chairman of CFG, Khaldoon Al Mubarak, said in a statement. 

Chinese media and entertainment conglomerate China Media Capital, having acquired a 12 per cent stake in CFG for $400 million in 2015, is the second-largest stakeholder in the group behind its principal owner, Sheikh Mansour bin Zayed Al Nahyan, a billionaire member of the Abu Dhabi royal family.

Sheikh Mansour holds 77 per cent of the shares in the company.

Funding business growth

According to CFG, the investment will be used to "fund international business growth opportunities and develop further CFG technology and infrastructure assets." 

"We are excited to invest in CFG, which is redefining soccer globally and in doing so has successfully built an impressive global platform of marquee soccer clubs across five continents," said managing partner and director at Silver Lake, Egon Durban. 

"We greatly respect CFG's stewardship," he continued, "of more than a century of soccer tradition and the strong global fanbases of its clubs. We are excited to partner with the board and CFG's world-class management team to help drive the next phase of CFG's growth in the fast-growing premium sports and entertainment content market."

Durban is also joining the board at CFG, increasing its total members to nine. In the statement, CFG also made it clear that none of its current shareholders are selling equity because of the investment.