UK Premier League is the leading league for Chinese Investment

 

Yesterday saw the announcement that Manchester City Football group would sell a 13 per cent stake at a price of USD 400m to a consortium of Chinese Investors. Investments into football clubs of all sizes and statures over the last few years have become commonplace. Investors into football clubs have included former players (Manchester United’s class of 92 and Salford City), wealthy families (the Glazers and Manchester United), wealthy individuals (Randy Lerner and Aston Villa), sports conglomerates (Liverpool and New England Sports Ventures, the baseball holding company now known as Fenway Sports Group) and financial consortiums.

Just as on the pitch, there is no guarantee that these investments will produce successful returns, but usually the two have a habit of going hand in hand.

Where Manchester City have broken the mould is that they are first Premier League team to have attracted Chinese investment and the deal, if it completes, will be the largest single investment made into a football club by value, after the October 2014 USD 325m investment into Valencia by Hong Kong-based Meriton Holdings. However whilst the two deals may be similar in value, Meriton got a 70 per cent stake in Valencia, compared with only the 13 per cent stake being taken in Manchester City!

This deal has the potential to ratchet up the ever present rivalry between fans of Manchester United and City, because it places the total value of Manchester City at USD 3bn, which is approximately the current market cap of New York-listed Manchester United.

The “noisy neighbours” as Sir Alex Ferguson once referred to Manchester City as, are now making their presence felt in the financial markets as well as on the pitch!

 

Filed under: dealmaking, football, M&A, sport, UK, China