English football may not be just a toy for multimillionaires trying to buy a positive image cheaply. It is also – more and more – a profitable business. The US Silver Lake investment in Manchester City, announced Wednesday, November 27, seems to provide evidence. The investment fund, specialized in technology and entertainment, took a 10% stake in City Football Group, the group owning the Mancunian team, for 500 million dollars (450 million euros). This values the club to 4.8 billion dollars (4.4 billion euros), making it the most expensive football group in the world. In comparison, Manchester United, which is listed on the stock market – but whose current results are poor – is valued at $ 3 billion.
By buying Manchester City in 2008, Sheikh Mansour Bin Zayed Al-Nahyan, a member of Abu Dhabi's ruling family, seemed to be buying a rich man's toy and laundering the image of the small oil state. which is part of the United Arab Emirates and is regularly pinned for its human rights violations. At the time, English football clubs were essentially a matter of prestige, but showed abysmal losses.
In recent years, the situation is recovering. According to Deloitte, the English Premier League clubs, taken as a whole, are now posting a profit. The huge cash inflow of television rights, which has been flying for a quarter of a century, combined with UEFA's imposition of rules prohibiting losses, has begun to end (partially) the drift of early 2000s.
Sheikh Mansour has multiplied acquisitions
In its public accounts, Manchester City ensures to be in balance for five years, with a very small profit of 10 million pounds (11.7 million euros) last year. This version of events is disputed by UEFA, which considers that the club has spent at a loss, breaking the rule of financial fair play. The authority of European football will decide next month whether it suspends Manchester City Champions League or not for a year.
In addition, Sheikh Mansour has multiplied acquisitions. City Football Group now has teams around the world, from New York City to Melbourne City, to secondary clubs in China, Spain, Uruguay and Japan.
The financial situation of his group, however, seems good enough to attract new investors. In 2015, China Media Capital Group injected $ 400 million. He now has 12% stake in City Football Group. The arrival of Silver Lake, a fund that has invested in the past in Alibaba, Dell or Skype, and is unlikely to make losses, continues this logic. At the end of the operation, Sheikh Mansour will still own 77% of the football group.
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