US private equity firm Silver Lake has made a £389m investment in the parent company of Manchester City, valuing it at £3.73bn ($4.8bn).
The deal represents around 10% of City Football Group’s (CFG) worldwide business and is the highest-ever valuation in global sport. CFG has a stake in seven football clubs, including in the US, Australia, Japan and China.
Group chairman Khaldoon Al Mubarak said: “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.”
Silver Lake, which is best known for technology investing, said its stake would “help drive the next phase of CFG’s growth in the fast-growing premium sports and entertainment content market”.
Egon Durban, Managing Director of Silver Lake, will represent the US backers on the CFG board as part of the deal.
In November, Manchester City announced it had brought in a record £535.2m last season. This represented the 11th successive year of revenue growth for the club and closed the gap on Manchester United, the Premier League’s richest club.
The figure is projected to rise again next year when payments from a £45m-a-year Puma kit deal start to take effect.
Will Walker-Arnott, senior investment manager at Charles Stanley, told BBC Radio Four’s Today programme: “Silver Lake is a US private equity firm which is better known for investing in technology stocks such as Alibaba and Skype.
“More recently it has been getting into sports rights and got invested in the Ultimate Fighting Championship. We’ve got a lot of large broadcasting firms like BT, Sky and Amazon all bidding for rights.
“Manchester City are being investigated by Uefa for possible breaches into financial fair play, so [Silver Lake] are obviously looking over that.”
