City Football Group make fresh £210m move as Manchester City owners show faith

City Football Group, the parent company that owns Manchester City, has raised a further £210m through issuing new preference shares, the second time that the ownership group has done it in a matter of months.

A filing with Companies House on November 29 showed that CFG had allotted 23,766,185 of Class A Preference Shares, with amount paid per share standing at £8,836, a move that has raised approximately £209.9m for City’s owners, whose sprawling network of football clubs across the globe stands at 13 under majority ownership, including City, New York City FC, Melbourne City, Girona, ESTAC Troyes, Palermo, Lommel SK, and Yokohama F. Marinos, among others.

It is the second time this year that CFG have made such a move having issued 23,788,002 preference shares priced at £8.83 each on June 30, a move which took the total number of CFG shares to 620,527,018, valuing the group at around £5.5bn.

READ MORE: Arne Slot fires dig at Man City with Mohamed Salah 115 charges 'joke'

READ MORE: Pep Guardiola hints at new Man City target with Arsenal comment

As per the filing at the end of June, the most recent filing does not identify the party to whom the shares were issued, but as per CFG’s most recent confirmation statement there is only US private equity firm Silver Lake Capital, who initially acquired a 10% shareholding in CFG back in 2019 for a $500m sum, that hold Class A preference shares. Abu Dhabi United Group (ADUG) are recorded as holding ordinary shares, something which places Silver Lake at the top of the pile when it comes to who receives dividends, although they take less part in strategic decisions around the business.

In late 2022, Silver Lake increased its shareholding in CFG to 18.15% after it moved to acquire most of the shares that had previously been held by China Media Capital.

Class A preference shares have historically been issued to Silver Lake Capital, the California-based firm that has investments in its portfolio including the Madison Square Garden Sports Co, New Zealand Rugby, Fanatics, Endeavour and Klarna. Should the latest allocation of shares have been handed to Silver Lake then it would see its stake in City Football Group increase from 18.15% to a little more than 24%.

It is a common move for companies to issue preference shares to raise capital, allowing them to do so without giving up control of the company. Those who hold preference shares are higher up the chain and receive dividends before common shareholders.

It would also be a sign of confidence in Manchester City, by far the most valuable asset in the CFG portfolio, with the club currently in the throes of a battle with the Premier League over it charging the club with 115 alleged breaches of financial regulations over a decade.

An independent commission is currently hearing the evidence from both parties and a decision is expected to be handed down early next year, although with the option for either side to appeal it is likely to rumble on for a considerable amount of time after that.

The penalties for being found guilty of the charges would be severe for the club, potentially seeing them demoted through the English football pyramid. Manchester City have strenuously denied the allegations and vowed to clear their name, hiring one of the UK’s most highly-regarded legal minds, Lord Pannick KC, to lead the legal counsel in their defence.

Acquiring more preference shares and increasing the shareholding in CFG, were it Silver Lake who were allocated the new shares, would be a sign of real commitment, and confidence, in the face of the current issues that the club is facing with regards to the independent commission, and the risk that comes along with that.

Whenever fresh capital is raised by football club owners it often piques the interests of fans for what it may be used for.

In order to pursue the business operations and growth objectives of the multitude of clubs in their portfolio requires cash, either for further additions or to develop what they already own. Among the potential beneficiaries could be City given that CFG recently began a £300m redevelopment of the Etihad Campus site, building a hotel and expanding the North Stand of the Etihad Stadium that will take the capacity to 60,000 ahead of the 2025-26 season.

This is an influx of new money into the business through a share issue, not a case of others selling a stake they held in the business to another party.