Tuesday 25 July 2017

Manchester City's owners sell £265m stake to Chinese state

Chinese president Xi Jinping is behind the drive to see football grown in the country,
Chinese president Xi Jinping is behind the drive to see football grown in the country,

Ian Herbert

Manchester City are convinced they can narrow the huge revenue-earning gap between themselves and Manchester United after securing a deal which will see the Chinese state invest $400m (£265m) and take a 13pc share in the club's holding company.

The club recognise that United have a substantial lead in the Chinese market.

But, while the strategy of both clubs has been to secure sponsorship deals which make Far East firms their official noodle, credit card or potato snack partners, City feel that approach has its limits.

With cash-rich state-backed China Media Capital (CMC) ploughing the money in, City want a broader profile and there is a strong chance that a City team in China may now be on the way.

City, who will open a new office in Beijing to go with their Japanese and Singaporean operations, will also find access to the Chinese market for all four of its football clubs - Manchester City, New York City, Melbourne City and Yokohama F Marinos of Japan's J-League.

They also anticipate being able to complete lucrative deals for sponsors who want profile in the four continents the club now occupies.

City chief executive Ferran Soriano has been unconvinced in the past about the value of investing in China.

But with the Chinese president Xi Jinping (above) - a huge football fan - behind the drive to see the sport grown in the country, City decided that the approach from a consortium led by CMC was too good to refuse.

Building international relations with countries such as China was also a significant part of Abu Dhabi's incentive for investing in City in 2009.

Sources insist that the deal, which values the City Football Group holding company at $3.3bn (£2.1bn), is not a way of securing cash to help avoid falling foul of UEFA's Financial Fair Play - though there is to be a relaxation of that regime where new ownership of clubs is concerned.

They also moved to reject any idea that owner Sheikh bin Zayed al-Nahyan is beginning to disinvest after ploughing in an estimated £1bn.

The prospect of this deal securing exciting future Chinese talent may not be such a remote hope, with an intense drive afoot to develop better players.

Asked about his personal ambitions for China four years ago, Xi replied: "To qualify for the World Cup, to host the World Cup and to win the World Cup."

CMC announced two weeks ago that they had paid $1.3bn (£862m) for the global broadcast rights for the Chinese Super League, which generated only $21m (£13.9m) for the 2014 and 2015 seasons combined.

They find themselves with a need for premium Manchester City content, while City have a need for the audience.

The size of the deal reveals how City have already closed the gap on United, who are currently valued at $3.05bn (£2.02bn) on the New York stock exchange.

(© Independent News Service)

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