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City Football Group valued at $4.8bn in deal with Silver Lake

City Football Group, the owner of English Premier League champions Manchester City, is selling a stake in its business to US private equity firm Silver Lake for $500m (€453.8m).

The deal covers a shareholding of just over 10 per cent and gives the Abu Dhabi-based CFG a valuation of $4.8bn. Silver Lake signed the deal with CFG chairman Khaldoon Al Mubarak last Saturday, and made an official announcement today (Wednesday).

Al Mubarak said in a statement: “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.”

As part of the deal Durban will also join the CFG board.

CFG owns a portfolio of football teams around the world. After buying Manchester City in 2008, it acquired Major League Soccer’s New York City FC, Melbourne City FC of the Australian A-League, Yokohama F. Marinos of the J.League in Japan, and Chinese second-tier club Sichuan Jiuniu. The group is also close to purchasing a stake in Indian Super League side Mumbai City FC.

Silver Lake was originally an investor in technology firms, but has more recently expanded into entertainment. Its investments include minority shareholdings in US-based sports and entertainment group Endeavor – the owner of the IMG sports marketing agency – and mixed martial arts property Ultimate Fighting Championship.

The Financial Times reported that Silver Lake intends to hold its stake for a decade, and was attracted in part by the high prices paid for football media rights by broadcasters and digital platforms. Al Mubarak indicated that Silver Lake’s $500m injection will help fund CFG’s expansion plans, which is likely to include the planned construction of a stadium in New York.

In 2015, a consortium led by Chinese investment company China Media Capital paid $400m for a 13 per cent stake in CFG, valuing the group at more than $3bn.

The Silver Lake deal will leave CFG’s founder Sheikh Mansour, the billionaire businessman and member of the Abu Dhabi royal family, with a 77 per cent shareholding.

Manchester City recently announced record revenues of £535.2m ($693m/€625m) from the 2018-19 season. That season saw Manchester City’s senior teams win six trophies, including an unprecedented clean sweep of domestic competitions for the men’s team, covering the Premier League, the FA Cup, the League Cup and the Community Shield. The women’s team claimed a cup double, winning the FA Women’s Cup and the FA WSL Continental Cup.