City Football Group (CFG), the ownership body of English Premier League football club Manchester City, has today (Wednesday) announced a major investment deal with US private equity firm Silver Lake which it states will aid technology and infrastructure development.
The $500m (£389.1m/€454.2m) equity investment, equivalent to just over 10% of the company’s post-investment value, places CFG’s valuation at $4.8bn. Silver Lake becomes the second major partner in the group.
Around 12% of CFG equity remains held by a consortium of Chinese institutional investors led by Chinese media and entertainment conglomerate China Media Capital (CMC). Abu Dhabi United Group, the investment and development vehicle privately owned by Sheikh Mansour bin Zayed Al Nahyan, retains a 77% stake as majority owner of CFG.
The CMC group, featuring CITIC Capital, acquired its shareholding for $400m in December 2015, valuing CFG at $3bn at the time. Commenting on the latest investment, Khaldoon Al Mubarak, chairman of City Football Group, said: “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.
“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.
“We welcome the opportunity to work with Egon Durban (managing partner and managing director) and the Silver Lake team and its network to facilitate the global growth and deepening of CFG club fan-bases and the development of our business as a whole.”
CFG said that no existing shareholders are selling equity as a result of the primary capital investment. Al Mubarak indicated that the proceeds from the investment will be used by CFG to fund international business growth opportunities and develop CFG technology and infrastructure assets.
Durban said: “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. We greatly respect CFG’s stewardship 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.”
The Financial Times newspaper, citing people with knowledge of its strategy, said Silver Lake had approached other leading English and European clubs, including Chelsea. Silver Lake reportedly intends to hold its stake for around a decade but could look to cash out through an initial public offering or sell to another private investor.
The Financial Times added that Silver Lake’s cash injection will help in the addition of further clubs to the CFG portfolio, along with the planned construction of a stadium in New York. In May, New York City FC sporting director Claudio Reyna stressed that finding a new stadium remained a “top priority” for the Major League Soccer club.
The franchise, which is owned by CFG, has played at Yankee Stadium, home of Major League Baseball team the New York Yankees, since it launched in 2015. The club has said on numerous occasions that it would like to move into a stadium of its own but so far plans have not come to fruition.
Another major infrastructure project currently being planned by CFG is the development of a new arena in Manchester. CFG has partnered with US venue development, advisory and investment company Oak View Group on the project, with OVG set to launch a second phase of public consultation on the controversial plans to add a second major arena to the city.
The second phase, focusing on OVG’s more developed plans, will commence tomorrow (Thursday) and run through to December 16. OVG and CFG last month completed the first phase of public consultation.
The first phase of consultation with local residents and other interested parties saw initial details behind the plan emerge, such as its proposed location and an early artists’ impression of the 21,000-capacity arena.
The proposed site for the development is on an area of wasteland at Etihad Campus located across the Ashton Canal from City’s Etihad Stadium. The main focus for the first stage of consultation had been on creating jobs for people in East Manchester, and making sure a new arena works for the community.
Arena stakeholders have outlined that the “pioneering” venue would “push the boundaries” of the live entertainment experience in the UK, adding that it has the potential to create over 1,000 direct operational jobs.