0847 GMT January 25, 2020
Tech-focused Silver Lake will buy just over 10 percent of City Football Group (CFG), which owns reigning English Premier League champion Manchester City and teams in the US, Australia and China, the companies said on Wednesday, according to Reuters.
The investment crowns a rags to riches story for Manchester City, which spent much of the 1990s in the doldrums but broke into the big league of world soccer with the help of Middle Eastern cash.
Europe’s top soccer clubs have drawn in big money from some of the world’s richest investors over the last decade, as the game attracts more fans in lucrative markets such as Asia, the US and the Middle East.
Chinese investors paid $400 million for a 13-percent stake in CFG four years ago, valuing the group at $3 billion at that time.
Man City’s big domestic rival Manchester United is majority owned by the American Glazer family and is valued at $2.8 billion.
Chelsea is owned by Russian billionaire Roman Abramovich, while America’s Fenway Sports Group controls current European champion Liverpool and French champion Paris Saint Germain is owned by Qatar Sports Investments.
“We and Silver Lake share the strong belief in the opportunities being presented by the convergence of entertainment, sports and technology and the resulting ability for CFG to generate long-term growth and new revenue streams globally,” CFG Chairman Khaldoon al-Mubarak said.
It is relatively rare for private equity firms to buy into soccer because they want a relatively quick return and while clubs make their money from lucrative broadcasting rights, their fortunes still depend on their success on the field.
Silver Lake Managing Director Egon Durban, who will join CFG’s board, said the California-based firm’s investment would “help drive the next phase of CFG’s growth in the fast-growing premium sports and entertainment content market.”
Silver Lake owns stakes in entertainment and sport talent agencies group Endeavor and global sports agency IMG.
Turning the tables
Although City was the champion of England in 1968, the club was heavily overshadowed by local rival Manchester United and fell into the third tier of English soccer in 1998.
The team was a mid-table Premier League side when it was purchased by the Abu Dhabi Group in 2008.
Within four years, City won the Premier League, their first top-flight title in 44 years, and Spaniard Pep Guardiola, appointed manager in 2016, guided the club to a second straight title and a domestic treble of trophies last season.
But City has yet to achieve its goal of winning Europe’s most prestigious prize, the Champions League.
And an investigation by European soccer’s governing body UEFA into alleged breaches of Financial Fair Play rules could potentially see the team barred from the competition.
City reported record 2018-19 revenue of £535.2 million ($687 million) in a fifth consecutive year of profitability.