Sale of Man City stake values club group at record-breaking $4.8bn

Edmund Heaphy
·Finance and news reporter
A general view of Manchester City crest
Manchester City is thought to be the only profitable club within City Football Group. Pic: PA

City Football Group, the owner of Manchester City, has agreed to sell a more than 10% stake to US private equity giant Silver Lake, in a deal that values the group at a record-breaking $4.8bn (£3.7bn).

Silver Lake, which is known for technology-related investments in giants like Dell, Broadcom, and Skype, said it would invest $500m (£388m) in the company, becoming the second major outside investor in the group.

The $4.8bn valuation is a record for a sports group globally. In addition to Manchester City, City Football Group owns football clubs in the US, Australia, Japan, Spain, Uruguay, and China.

Manchester City is thought to be the only profitable club within the group, however.

City Football Group said on Wednesday that the proceeds will be used to fund the group’s international expansion and allow it to further develop its technology and infrastructure assets.

Though City Football Group is headquartered in London, it is controlled by Abu Dhabi-based billionaire Zayed Al Nahyan, who is a member of the country’s royal family.

Calling Silver Lake “a global leader in technology investing”, chairman Khaldoon Al Mubarak said on Wednesday that the group was “delighted” by the investment 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 [City Football Club] to generate long-term growth and new revenue streams globally,” he said.

Egon Durban, the managing partner of Silver Lake, will join the board of City Football Group. The investor has expanded from its traditional technology domain into the entertainment sphere, and was interested in the multi-billion dollar sums paid for football media rights, according to the Financial Times.

In 2015, China Media Capital acquired a 13% stake in the group, which valued the group at more than $3bn.

The new deal means that that Al Nahyan will hold around 77% of the company, while China Media Capital and Silver Lake will own around 12% and 10%, respectively.