City Football Group, the parent company of Manchester City is set to become one of the most valuable sports organisations on the planet.
Man City holding company City Football Group (CFG) has announced a $500 million investment from American private equity firm Silver Lake.
Silver Lake will own around 10% of the group after the investment.
The deal was described by the Financial Times as record-breaking, in terms of sports franchise valuations. Following the investment City Football Group is valued at $4.8 billion.
The Dallas Cowboys top the Forbes Sports list with a valuation of $5 billion.
— Manchester City (@ManCity) November 27, 2019
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.”
California-based Silver Lake made its name investing in technology companies such as Alibaba, Dell and Skype. Recently it has moved to entertainment investment, including the UFC and Hollywood talent agency Endeavor.
No existing CFG shareholders are selling equity as a result of this capital investment.
This is not the first major investment in City's Parent Company. In 2015, China Media Capital led a consortium that paid $400m for a 13% stake in CFG, then valuing the group at over $3 billion.
The new deal will leave Sheikh Mansour as majority shareholder at 77%, China Media Capital at about 12%, and Silver Lake at just over 10%.
Khaldoon Al Mubarak has indicated that the proceeds from the investment will be used by City Football Group to fund international business growth opportunities and develop further CFG technology and infrastructure assets.
Among those assets may include attempting to build a stadium in New York.
According to Forbes Sports rich list of 2019 Manchester City were 25th on the list with a valuation of nearly $2.7 billion. While it is a little unclear exactly how much of the holding company Manchester City represents.
In 2017 a year after the investment by China Media Capital, CFG was valued at over $3 billion, Forbes then valued Man City at $2.1 billion.
The 2020 Forbes list should see Man City climb higher again. Although, with the global outlook referenced in the statement, it remains to be seen how much, if any, of the cash will find its way to the Etihad Stadium transfer kitty.