By Mike Murphy
Silicon Valley private-equity firm Silver Lake Partners is buying a $500 million stake in the owner of Manchester City, at a valuation that makes the English soccer team one of the world’s most expensive sports franchises.
Silver Lake will take a 10% stake in City Football Group (CFG), owner of the English Premier League powerhouse, in a deal that values the team at $4.8 billion. A statement from CFG said the investment will be used to “fund international business growth opportunities and develop further CFG technology and infrastructure assets.”
CFG also owns New York City FC, Melbourne City FC, Yokohama F. Marinos in Japan, Club Atlético Torque in Uruguay, Girona FC in Spain and Sichuan Jiuniu FC in China.
As of July, Man City was ranked 25th, with a value of $2.69 billion on Forbes list of most valuable sports teams . But the new stake brings the club all the way up to No. 2, where the New York Yankees had sat with a valuation of $4.6 billion. The Dallas Cowboys are at No. 1, with a valuation of $5 billion.
Man City won the Premier League last season and swept a domestic treble, but is currently stuck in third place in the league behind Liverpool and Leicester City. Its majority owner is Sheikh Mansour bin Zayed Al Nahyan, a member of Abu Dhabi’s royal family. Since buying the team in 2008, he has spent hundreds of millions of dollars on world-class players, and renowned manager Pep Guardiola, and built one of the Europe’s premier teams.
Silver Lake is one of the world’s largest tech investors, with stakes in Alibaba Group (NYS:BABA) , Dell Technologies (NYS:DELL) , Tesla (NAS:TSLA) and Peloton, among others. The Financial Times reported Silver Lake had approached other major English and European soccer teams.
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Man City’s rival Manchester United (NYS:MANU) is listed on the New York Stock Exchange, and has a market capitalization of $2.75 billion. Shares have lost 11.8% so far this year, compared with a gain of 23% for the S&P 500 (S&P:SPX) . Since making a debut at $14 in a 2012 initial public offering in 2012, the company has returned around 20% for shareholders.
Man City is under investigation by UEFA for allegedly breaking financial regulations and could face a one-year ban from the lucrative Champions League. A ruling is expected in December.
Barbara Kollmeyer contributed to this article from Madrid.