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Manchester City owners sell ten per cent stake for £389m and will use profits to fund global expansion

The deal values CFG, which has a stake in seven clubs across the world, at £3.73 billion - REUTERS
The deal values CFG, which has a stake in seven clubs across the world, at £3.73 billion - REUTERS

Manchester City’s Abu Dhabi owners plan to accelerate their global expansion after selling a £389 million stake in their football empire to investors from the United States, who are undeterred by the threat of Uefa sanctions against the Premier League champions.

Silver Lake, a US private equity behemoth, on Wednesday acquired a 10 per cent share in City Football Group (CFG), a move which makes the company one of the most valuable sports franchises in the world at around £3.73 billion.​

The decision to invest in CFG followed an extensive due diligence process into allegations that City breached Uefa’s Financial Fair Play rules, as well as a thorough examination of criticism of Abu Dhabi’s human rights record.​

A hearing by Uefa’s Club Financial Control Body’s adjudicatory chamber is due to take place in the next fortnight amid the potential threat of a Champions League ban for City.​

The club have always strongly denied any wrongdoing and their owners believe Silver Lake’s investment further validates their conduct. The impact of the deal was widely felt, with shares in City’s ­rivals, Manchester United, rising by as much as 14 per cent, the biggest jump since the company went public in 2012.​

The huge capital injection will be used primarily to fund the CFG’s ­aggressive global expansion plans that will extend to the imminent purchase of Indian Super League side Mumbai City FC, who are ­expected to become the eighth club in the group’s stable in the next 48 hours. As well as Manchester City, the CFG network – the brainchild of Ferran Soriano, City’s dynamic chief executive – already comprises Major League Soccer side New York City in the US, Melbourne City in Australia, Chinese club Sichuan ­Jiuniu, Girona in Spain, Atletico Torque of Uruguay and Yokohama F. Marinos in Japan.​

Talks with Silver Lake – which has combined assets in excess of £33 billion and a portfolio of investments ranging from Alibaba, the Chinese online retail giant, and ­Tesla cars to the mixed martial arts giant UFC and Hollywood talent agency Endeavor – commenced in May, around the time Pep Guardiola’s side were completing an ­unprecedented domestic treble.​

Negotiations accelerated ­towards the end of the summer with a deal finally signed on Saturday. ​

Egon Durban, the Silver Lake managing director, has joined the CFG board. ​

The deal comes four years after City’s billionaire owners sold a 13 per cent stake in the business to China Media Capital for £265 million and leaves Sheikh Mansour with a 77 per cent controlling stake. To put the scale of the Silver Lake agreement into context, Fenway Sports Group paid £300 million to buy Liverpool in 2010.​

Khaldoon Al-Mubarak, chairman of CFG and Manchester City, ­described Silver Lake as “the perfect fit”, with the American investors attracted by booming revenues for broadcast football rights and the convergence of the technology, media and entertainment industries. “When we bring in another half a billion dollars of investment into this group and when we commit to keep that investment and not take out any of that, I think that in itself tells you how we see investing and how we see the future,” ­Al-Mubarak said.​

“I look at what we’ve achieved over the last 10 years as a benchmark to build on for the next 10 years across the board in every single club that we’ve invested in.”​

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 and tap into Silver Lake’s considerable intellectual expertise. There is likely to be news in due course on CFG’s long search for a permanent home for New York City. The MLS side are groundsharing with the New York Yankees at great cost but the move to a 25,000 to 30,000-capacity stadium on a proposed site in the South Bronx would be a significant development, albeit predominantly funded through bond and loan ­arrangements.​

Silver Lake’s reach spreads far and wide. They are an investor in Oak View Group, the American company proposing to build a new 20,000-seat arena on a site next to the Etihad Stadium.​

Silver Lake is also an investor in the Alibaba Group, China’s leading e-commerce company. ​

In November last year, Uefa struck a commercial deal with Alipay, which is part of the Alibaba Group. The announcement of Silver Lake’s investment in CFG came the morning after Aleksander Ceferin, the Uefa president, had been one of City’s guests of honour at the Champions League game against Shakhtar Donetsk, although the club have insisted this was mere coincidence.