The cost of being champions: Manchester City’s $2bn investment

Reuters

Abu Dhabi-owned Manchester City won its fourth English Premier League title in five years yesterday, netting £44 million ($54.4 million) for finishing top.

That figure pales into insignificance against the estimated $2 billion total investment made by Abu Dhabi royal Sheikh Mansour following his takeover of the club in 2008.

But the business acumen that accompanied the deal to buy the club for £210 million nearly 14 years ago has helped to transform Manchester City from also-runs into champions, both on and off the pitch.

In March, the club was named the world’s richest football club in the latest edition of Deloitte’s Football Money League. City topped the list, which is based on revenue, for the first time after increasing its income to $680 million despite the effects of the coronavirus pandemic.

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The Premier League champions, inspired by coach Pep Guardiola, climbed five places, moving ahead of giants Real Madrid, Bayern Munich, Barcelona and Manchester United.

According to Deloitte, Manchester City’s revenue increased by $112.2 million compared to the previous year,and has grown from $15.8 million to $716.3 million over the 25 years since the first Deloitte Money League, which covered the 1996-97 season.

Manchester City became only the fourth club to top the list after first entering it in respect of the 2007-08 season, remaining in the top 20 in each year since.

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Michael Bessey, GCC regional representative for global public affairs consulting firm ASG, said: “This is a huge win for Abu Dhabi which has transformed Man City into a juggernaut since buying the club in 2008. Abu Dhabi’s purchase of Man City arguably set off a trend of other wealthy international investors buying European football clubs – notably, Saudi Arabia’s (far) less successful acquisition of Newcastle United.

“While international prestige may have been a driver in the Man City purchase, it has also been an enormously profitable investment on its own terms. The club has turned record profits in the past few years (Covid excepted), and in 2019 US private equity giant Silver Lake bought around 10 percent of the Abu Dhabi-controlled investment vehicle that owns Man City in a deal that valued the club at nearly $5 billion.”

Under Mansour and chairman Khaldoon Al Mubarak, City is now run like a global corporate giant.

In January, Manchester City announced that its total revenues had increased by 19 percent over the last year, while also reporting a profit of $3.3 million. At the time, Al Mubarak said in a statement carried by state news agency WAM that the club’s improved financial performance could be attributed to the impact of a long-term strategy which seeks to diversify and globalise revenues.

“His Highness Sheikh Mansour’s vision, set in 2008, is the reality we are living – we are a sustainable and socially responsible organisation, finding and developing talent and competing for trophies on both the domestic and European stage,” he said.

CEO Ferran Soriano added: “From a business perspective, we were pleased to return to profitability, having successfully navigated the revenue challenges created by the pandemic. Covid-19 did not stop us and we continued to grow, innovate and develop new ideas.”

But the purchase of the club from Thailand’s Thaksin Shinawatra is much more about the top line. It has also helped put Abu Dhabi and the wider UAE on the global map for “soft power”.

Some analysts argue that the UAE’s top ranking regionally and 10th globally for its influence in the Global Soft Power Index (GSPI) 2022, developed by UK-based Brand Finance, owes much to the purchase back in September 2008.

The UAE’s overall Soft Power score improved more than 11 percent, climbing to the 15th spot globally on the overall GSPI ranking, up from 17th place in 2021.

Established in 2013, Manchester City’s owner City Football Group (CFG) also has two other majority owned and operated clubs – New York City Football Club in the MLS in the United States and Melbourne City FC of the A-League in Australia.

Each club’s vision to use football for social good is delivered in part through City in the Community, Manchester City’s charity, which has since been replicated in New York and Melbourne, its website says.

The group also has investments in the Yokohama F Marinos in Japan, Montevideo City Torque in Uruguay, Girona in Spain, Sichuan Jiuniu in China, Mumbai City in India, Lommel SK in Belgium and Espérance Sportive Troyes Aube Champagne (ESTAC) in France.

In 2021, Club Bolivar joined the City Football Group family as its first partner club.

From July 2021, CFG’s ultimate parent undertaking is Newton Investment and Development LLC, a company registered in Abu Dhabi and also wholly owned by Sheikh Mansour.

Born in 1970 in Abu Dhabi, Sheikh Mansour is a member of Abu Dhabi’s royal family and a businessman with global interests. He was a leading figure in the successful bid to host the FIFA Club World Cup in the UAE in both 2009 and 2010. 

Outside of football, he is chairman of the Emirates Racing Authority, the internationally recognised governing body for horse racing in the UAE. He is Deputy Prime Minister of the UAE, Minister of Presidential Affairs and a member of the Supreme Petroleum Council. In 2017 he became vice-chairman of Mubadala Investment Company, one of the world’s largest state-owned investment funds.

Manchester City’s roll of honour since the 2008 takeover

• Premier League wins: 2012, 2014, 2018, 2019, 2021, 2022
• FA Cup wins: 2011, 2019
• League Cup (Carabao Cup) wins: 2014, 2016, 2018, 2019, 2020, 2021
• FA Community/Charity Shield wins: 2013, 2019, 2020
• Most points in a season (3 for a win): 100 (Premier League 2017-18)
• Most goals in a season (all competitions): 169 (2018-19)
• Most wins in a row (all competitions) – 21 (December 19 2020 – March 2 2021)
• Most league wins in a row: 18 (August 26 – December 27 2017)

Other City Football Group investments

• In January 2019, CFG was announced as the anchor investor in Sapphire Sport, a US-based sport venture capital fund. At the time, CEO Soriano said the move was “a natural extension of our original global model which will help drive our growth and success”
• In July 2017, CFG and Goals Soccer Centres announced a joint venture to become one of the largest operators of dedicated five-a-side pitches in the United States
• In July 2016, CFG announced its first esports investment with the signing of a player for Manchester City, becoming only the second Premier League club to sign an esports player
• In June 2018, Manchester City Esports extended its reach into China, with the establishment of a three-man team competing in FIFA Online, and this was expanded to form a team in South Korea in November 2019
• In April 2017, New York City marked an MLS first with the signing of esports player Chris “didychrislito” Holly