Chinese investors buy 13 per cent stake in Manchester City for US$400m
Mainland media mogul Li Ruigang of CMC will join board of club’s parent group in landmark deal
Chinese investors have agreed a deal to buy 13 per cent of Manchester City’s parent company for US$400 million – the first major move by mainland firms into England’s lucrative Premier League.
The agreement will see institutional investors CMC (China Media Capital) Holdings and CITIC Capital take a stake in City Football Group (CFG), the company that owns Manchester City, New York City, Melbourne City, a minority interest in Yokohama F Marinos, and other football-related businesses.
In a statement on Tuesday, the three parties said the deal “follows more than six months of discussions among the parties to find the optimum model and associated strategies for the partnership”.
It added that the capital will be used by CFG “to fund its China growth, further CFG international business expansion opportunities and further develop CFG infrastructure assets”.
The deal values CFG as US$3 billion. United Arab Emirates’ Sheikh Mansour bin Zayed Al-Nahyan bought City for a reported 210 million pounds in 2008.
Before the deal, Abu Dhabi United Group, an investment company owned solely by Sheikh Mansour, was the sole shareholder in CFG.
Li Ruigang, the chairman of CMC, will join CFG’s board as part of the deal.
“Football is now at a fascinating and critical stage of development in China,” he said.
“We see unprecedented growth opportunities in both its development as an industry, being China’s most watched sport, and its inspirational role bringing people of all ages together with a shared passion.”
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Known as ‘China’s Rupert Murdoch’, Li is one of the mainland’s leading media moguls.
CMC is an investment fund set up by him in 2009 with contributions from at least six state-owned companies.
In October, a subsidiary of CMC paid a remarkable 8 billion yuan for rights to broadcast the China Super League for five years, a gigantic increase on previous deals.
Last week, CFG’s commercial director Omar Berrada told the Post that the group had big plans for China.
President Xi Jinping toured Manchester City’s facilities on a recent state visit to the UK.
“We clearly know that in China now there is a strategic drive to push for development and grassroots development in the country and we’d like to embrace that, we’d like to participate and see how we can help, developing football programmes which as we know has become part of the school curriculum, help boys and girls develop their football talent, so having the president visit our facilities and showcase our expertise in that area was fantastic,” said Berrada.
“China is clearly very important for us as a group, I’ve highlighted the importance of Asia as a whole, but really China specifically we are focused on, we’d like to develop our presence in many ways.”
Earlier this year, mainland sports media reported that Chinese investors were set to buy a similar stake in City’s rivals United, although it now appears whoever originated the rumour may have got his Manchester football clubs mixed up.
City said in their statement that the deal was still subject to regulatory approval in some territories.
The deal would be the most high-profile investment by China in European football since Wang Jianlin's Wanda Group bought 20 per cent of Atletico Madrid.
President Xi has made football development in the country a priority and said he has three goals: to qualify for the World Cup, to host it, and to win it.
Li added in the statement: "CMC has long been dedicated to creating opportunities that facilitate positive developments in Chinese football from different aspects within the ecosystem.
"With its unique business model and distinct successes, City Football Group, whom we have come to know well, represents a differentiated systematic approach to building a global platform for football know-how, player development, academy programmes and commercial partnerships that will benefit China's football industry on multiple levels.
"We and our consortium partner CITIC Capital also see this investment as a prime opportunity for furthering the contribution of China to the global football family.”
Chairman of CFG, Khaldoon Al Mubarak, added: "Our belief is that we now have an unrivalled platform to grow CFG, our clubs and companies both in China and internationally and we will be working hard with our new partners to realise the potential that this deal creates.”