Chinese Consortium invests $400m in CFG

Man City theme parks & big-screen cameos - Possibilities endless after CFG's Chinese link-up
http://www.goal.com/en/news/1862/premier-league/2015/12/01/17906832/-?

The Blues' new partners are key to a major $800bn plan to boost football in China, but with ties to the entertainment sector there is potential for so much more than a new club

Could we be about to see Sergio Aguero star in a Chinese language Warner Bros movie? Perhaps you would splash out on a family day pass to Manchester City World, riding the Yaya Toure rollercoaster.

For City Football Group's (CFG) $400 million link-up with a Chinese consortium is far from a short-term investment of serious capital. City are now worth $3bn, Manchester United, according to the New York Stock Exchange, are valued at $3.05bn. But it's about more than that.

United may be kings of overseas marketing deals but it seems City have signed up to a long-term strategy in China which will broaden their appeal and reach in the lucrative Asian market, and which is likely to fund yet another major venture on City's doorstep.

It is easy to see why City sources, so excited when contacted on Tuesday morning, describe this as "just the start".

Having already spent big money - arguably too much - on domestic football rights, and secured link-ups with two global film studios, China Media Capital (CMC) Holdings, the lead investor in this CFG deal, have their eyes on the big picture.

“The [Chinese] government has a plan to create a sports industry worth $800 billion by 2025 and accounting for 1% of the GDP," Hou Po, managing partner of China technology, media & telecommunications industry at Deloitte, told Forbes last month. "The football industry is one of the major pillars."

State-backed CMC are keen to be the driving force. Li Ruigang, the company's chairman who will now sit on an expanded CFG board, defended his decision to pay $1.3 billion for Chinese Super League rights over the next five years. They had cost just $15m for 2015, and $8m in 2014.

“The copyright of China’s sports games has long been undervalued," he argued. "Compared to the price for the Premier League or the NBA, [$1.3 billion] for China’s top soccer league’s exclusive rights is still rather low.

“We have faith in China’s sports industry, and the money can help our clubs purchase new equipment or improve coaching.”

According to one industry figure, Li, who has already secured links with DreamWorks and Warner Bros, and has set up an investment fund with IMAX, "wants to do for Chinese football what Rupert Murdoch and Sky TV did for the Premier League."

This is where Manchester City come in. Having purchased the Blues for £210m in 2008, Sheikh Mansour has set up clubs in Melbourne and New York and after six months of talks has now attracted investment of, at current exchange rates, £265m - for just a 13 per cent stake in his business.

The potential for a new CFG club in China is enormous. Whereas City's global Twitter following - 2.3 million people - lags behind their English and European rivals (United boast 6.48m, Barcelona a whopping 16.3m), their presence on Chinese social network Weibo is considerably larger. At 8.1m Chinese followers they are second only to United (8.5m) - which is in itself a healthy starting position - and almost 3m followers ahead of Barcelona.

“In Manchester City’s case, more than half of our 400 million global fans are from Asia," Omar Berrada, CFG's commercial director and understood to be a major player in the Chinese deal, said recently. "Of those 220 million, 75 million are from China alone, 80 million are from southeast Asia.”

Given that popularity, the mutual commitment of CMC and CFG to improving infrastructure and coaching, and the Chinese government's $800bn sporting strategy, a City-affiliated club playing in a league funded by CMC appears a no-brainer.

But there is a real potential for so much more than that.

"China is clearly very important for us as a group," Berrada said in an interview before this deal had been announced. "I’ve highlighted the importance of Asia as a whole, but really China specifically we are focused on, we’d like to develop our presence in many ways.”

That is claimed to include grassroots development, content production, partnerships with state broadcaster CCTV - owners of Premier League TV rights in the country - and, most importantly, commercial ventures with companies that would "like to work with a platform like CFG to engage with customers around the world."

A recent study published on weibowatch.com shows that 40% of Chinese football fans support overseas clubs due solely to star players - Lionel Messi has 14m followers on Weibo. The potential for CFG to now secure those wealthy commercial partners in Asia would obviously boost City's coffers and, therefore, ability to attract bigger names - they retain an interest in Messi should he ever leave Barcelona, where Berrada was once head of sponsorship. Big-name arrivals would only expand their profile in China further.

If a British ale is anything to go by, the recent visit of Chinese president Xi Jinping's to City's facilities will have already done wonders. Xi was pictured drinking a pint of Green King IPA with British Prime Minister during his official visit, sparking an unprecedented demand which saw a Beijing warehouse sell out of not just the beer but all of the brand's merchandise. Sales boomed. Imagine what his selfie with Aguero would have done for City's profile.


“We clearly know that in China now there is a strategic drive to push for development and grassroots development in the country," Berrada says. "We’d like to embrace that, we’d like to participate and see how we can help, developing football programmes which as we know has become part of the school curriculum, help boys and girls develop their football talent, so having the president visit our facilities and showcase our expertise in that area was fantastic."

But there's so much more on offer both in China and Britain.

City have already boosted the local Manchester economy with their vast Etihad Campus, comprising the club's stadium, huge training complex and Beswick Hub, a public sport and leisure centre... and there are still acres of unused space, ready for further investment.

Since Gordon Brown put a stop to the mooted Las Vegas-style "super casino" in 2007, swathes of land next to the Etihad has been used a car park. As far back as 2012 the club and Manchester City Council announced their intention to construct a major leisure attraction, and Tuesday's news could represent a major breakthrough in those plans.

It is understood City's Abu Dhabi owners are keen to install a major complex which would become one of Britian's great tourist attractions. Abu Dhabi has already opened Ferrari World, the largest indoor theme park on the planet, and in 2017 is scheduled to open the largest Guggenheim museum of the collection.

There are rumours that the Walmart-owned Asda superstore, which sits between the Etihad Stadium and City Football Academy, could be bought out by CFG in order to build a major project that could attract more than five millions visitors per year - for comparison and to highlight the scale of these plans, the London Eye boasts 3.5m visitors per year.

China Media Capital may not be directly involved in the venture but it has already established links with Merlin Entertainments, the world’s second largest park group in terms of attendance, in order to build "world class attractions in China", according to Forbes. Those include a Legoland park near Shanghai and the development of DreamWorks Tours – Kung Fu Panda Adventures. The tie-in between CMC and Merlin was announced in the presence of Xi Jinping during his visit to Britain, to "showcase British creativity and celebrate China and UK collaboration".

It all appears part of the grand plan. Regarding CMC's far-reaching domestic strategy, Hou Po of Deloitte joins the dots: “The broadcasting can benefit from the leveraging of CMC’s wide range of businesses in ways such as cross promotion – soccer stars can make appearance in movies, and soccer themes could be incorporated into amusement parks.”

A Manchester City World may not spring up in M11, but a park in China is not beyond the realms of possibility. In fact, an awful lot suddenly seems far more possible.

The collaboration between Manchester City and China Media Capital has increased the possibility of new, major infrastructure exponentially. This is, as City insiders suggest, just the start.
Click to expand...

 
MillionMilesAway said:
He's really going for it, isn't he? "Part owned by Chinese state", "communist party member" - this guy is a cockroach.
Click to expand...

I think we should all get a little blue book to wave at the Gladbach or swansea game, a parody of Moa's little red book to welcome our new investors
 
Another interesting read:

Manchester City's 'remarkable £265m deal could blind-side rivals'

Manchester City's parent company have announced a deal with Chinese investors
Manchester City's parent company have announced a £265m Chinese investment, but what does it mean for the Premier League club?

The deal, which is subject to regulatory approval in some territories, values the group at almost £2bn in total.


Does it mean Manchester City can go out and splash the cash on Lionel Messi? And have other major European clubs missed a trick? Football finance expert David Bick lends us a hand in explaining the deal...


Give us the cold, hard news...

Manchester City's parent company City Football Group have announced a deal which will see a consortium of Chinese institutional investors take a stake of just over 13 per cent in the group.

The consortium of CMC (China Media Capital) Holdings and CITIC Capital are to invest £265m (US$400m) in City Football Group, the holding company which oversees Manchester City and their affiliated clubs, which include Melbourne City and New York City.

Manchester City are currently level on points with Leicester City at the top of the Premier League
The deal, which is subject to regulatory approval in some territories, values the group at almost £2bn ($3bn) in total.

What does this mean for City?

Sheikh Mansour has sold his 13 per cent stake in the club's parent company for £265m, around the same amount he bought the entire club for six years ago, showing the progress the Manchester club have made since 2009.

And Bick did not play down the importance of the deal while speaking to Sky Sports News HQ: "This is heavyweight cash investment from heavyweight investors.

"This I'd say is one of the most remarkable financial deals I have seen in football."


City Football Group also owns New York City FC (pictured), Melbourne City and a minority share in Yokohama F. Marinos
Who are China Media Capital?

China Media Capital are a state-backed firm investing in culture, technology, media, entertainment and consumer markets, and secured the (£860m) $1.3bn broadcast rights for the Chinese football league last year.

Bick said: "China Media Capital own a number of the major sports rights in China, including the Super League, their national teams and the University league.

"CITIC is a serious investment manager looking after money for major financial institutions in China and elsewhere."

What about the rest of the pack?

Bick is convinced City have stolen a march on their rivals with this deal, and could go some way to pulling them well away from Chelsea and Arsenal in the Forbes list of most value football clubs.

The deal should put City Football Group alongside Manchester United in terms of wealth
As of May 2015, Manchester City were ranked the fifth most-valuable club (£905m), behind Real Madrid (£2.13bn), Barcelona (£2.07bn), Manchester United (£2.03m) and Bayern Munich (£1.54bn).

United are now thought to be only just ahead of City Football Group, who take in NYCFC, Melbourne City and a minority share in Yokohama F Marinos.

Forbes list of most-valuable football clubs (May 2015, before current deal)
Team League Worth
Real Madrid La Liga $3.26bn
Barcelona La Liga $3.16bn
Manchester United Premier League $3.05bn
Bayern Munich Bundesliga $2.35bn
Manchester City Premier League $1.38bn (before deal)
Chelsea Premier League $1.37bn
Arsenal Premier League $1.31bn
Liverpool Premier League $982m
Bick said: "It is major investment, it catapults the valuation of the whole group, and obviously Manchester City are a big part of that, to an amount that is beginning to run alongside Manchester United.

"Apart from the financial investment, which is geared to direct investment in China, I would think this is going to give Manchester City major exposure in China.

"I think they have blind-sided the other major clubs with this deal."
 
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