City’s China deal ‘too good to refuse’

THE sale of a minority stake in City Football Group – parent company of Manchester City – to Chinese investors reflects the growing global lure and profile of the club, not a signal that owner Sheikh Mansour is ready to sell up.

Club sources told TheBusinessDesk.com the deal – which values City Football Group at close to £2bn – should not be seen as “the beginning of an exit plan” by the Abu Dhabi United Group, which is owned by the Sheikh and which has transformed City’s status since 2008.

“It’s a strategic one-off deal with serious, respected investors. It was too good an opportunity to turn down and it can open doors in a market that very few have managed to penetrate.

“They (the investors led by China Media Capital) like our global model, and it will help us grow our profile in a huge and growing market, so it’s something of a no-brainer.”

ADUG has invested more than £1bn since buying City in 2008, transforming both the club’s status in football and a large part of East Manchester at the same time.

Wooing some of world’s best players has delivered two Premier League titles, the FA Cup and League Cup, while the City of Manchester Stadium has been expanded and rebranded.

Earlier this year CFG opened a £200m training and youth development base, which was built on a brown field former industrial site near the Etihad Stadium. 

As well as Manchester City FC, City Football Group includes sister clubs New York City FC, Melbourne City FC and Yokohama F Marinos.

The investment has been made by two state-backed Chinese institutions, China Media Capital Holdings (CMC) and CITIC Capital,

CMC chairman Li Ruigang is said to have visited Manchester and City’s Etihad Campus with Chinese president Xi Jinping in October.

Meanwhile, the investment was welcomed by Manchester City Council.

Leader Sir Richard Leese said: “Abu Dhabi United Group’s ownership of Manchester City has been a huge success.  With the formation of the City Football Group (CFG), Manchester is now the headquarters for a transformational global football organisation and one with an unrivalled commitment to our community and to the city.

“The new partnership and minority shareholding announced today with a consortium of Chinese Institutional Investors creates not only a platform for further growth for CFG, but also new opportunities for further widening and deepening the international investment base in Manchester.

“We look forward to continuing to work with ADUG and their new partners in the growth and development of Manchester City Football Club and the City Football Group.” 

Avid City fan Gary Tipper, managing partner of Manchester-based Palatine Private Equity, said: “This deal is clearly part of the club’s plan to expand into China. The owners don’t need the money and it is only a small minority stake being sold, so there is no attempt by Sheikh Mansour to cash in.

“Any western company looking to do business in China needs a credible trustworthy partner and this deal represents the owners doing just that. It’s a great deal and all part of the plan for global domination.”

Leah Gillooly, lecturer in marketing at Alliance Manchester Business School added: “China is highly prized by top football clubs who see it as a vast market they can tap into in order to grow their number of fans and reap the rewards of increased merchandise and paid-for content sales to these distant fans. 

“Manchester City currently lags behind the likes of Arsenal and Manchester United in terms of fans in China so this deal will allow them to significantly develop their operations in China.  However, it is not just fans that clubs are interested in.  As China begins to show signs of interest in competing in and hosting major football Championships, clubs who are able to set up comprehensive operations in China can look to nurture local talent.

“Therefore, the deal signals the next step in Manchester City’s global strategy.  Unlike some other Premier League clubs, City Football Group has pursued the strategy of setting up or acquiring clubs in these international markets.  This allows them to build deeper ties within the local communities as well as developing potential talent and building revenue streams.  As such, it wouldn’t surprise me if we soon see the development of a CFG owned club in China.”