A group of Chinese investors including China Media Capital have agreed to buy a minority stake in the group that owns English soccer club Manchester City.
CMC and CITIC, one of China’s largest financial groups, are buying a 13% stake in City Football Group. The company is controlled by Abu Dhabi interests and controls Manchester City, New York City FC, Melbourne City FC, and other soccer assets. The deal values CFG at $3 billion.
CFG will issue new shares to the Chinese backers. The capital from the share issue will be used by CFG to fund its China growth, further CFG international business expansion opportunities and further develop CFG infrastructure assets.
"The CFG/CMC partnership is predicated on the opportunity to create new value for CFG in China and beyond by working with CMC, CITIC Capital and the Chinese football industry,” said CMG in a statement. “To that end, CMC and CITIC Capital representatives and CFG executives have already been working together, along with third parties, to identify and implement China-based initiatives for the CFG portfolio of clubs and companies.”
CMC is partnered with DreamWorks on its animation and theme park businesses in China, and recently set up a Chinese film joint venture with Warner Bros in Hong Kong.
"Football is now at a fascinating and critical stage of development in China. 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,” said CMC chairman Li Ruigang, who will join the board of CFC.
"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.”
CMC and other Chinese media and Internet groups are charging into the sports field, both as end users of the rights and as investments in businesses expected to be boosted by China’s expanding middle class.
CMC itself recently agree to pay $1.25 billion for long-term rights to English soccer in China. The company also owns a slate of major sports media rights including Chinese Super League, China Football Association “Team of China” (National Teams), and China University Football League.
Dalian Wanda last week announced the establishment of a new sports division forged out of the acquisitions of World Triathlon and rights and marketing group Infront. Wanda also owns 20% of Spanish soccer club Atletico Madrid. And both Alibaba and Wanda own stakes in Chinese soccer teams.
Earlier this year, Internet giant Tencent acquired rights to the U.S.’s National Basketball Association matches in a deal understood to be worth $500 million, while LeTV massively outbid incumbent PCCW for English soccer rights in Hong Kong.
Another Chinese entertainment group, Rastar recently agreed to buy a controlling stake in Spanish soccer club Espanyol.