Man City owners expand empire

The Etihad stadium, home of Manchester City in the UK. The owners, City Football Group (CFG), are expanding their global stable of clubs to eight in countries from China to Japan to the US. (Shutterstock)
Updated 29 November 2019

Man City owners expand empire

  • Mumbai City FC deal comes a day after Abu Dhabi-owned CFG becomes most valuable soccer group in the world

MUMBAI: The owners of Premier League champions Manchester City have agreed to buy 65 percent of Indian soccer team Mumbai City FC, expanding their global stable of clubs to eight in countries from China to Japan to the US.

The City Football Group (CFG) announced the deal just a day after it agreed to sell a stake to the US private equity firm Silver Lake for $500 million, making it the most valuable soccer group in the world with a $4.8 billion price tag.

While rivals such as Manchester United have focused on building their brand and global following based on one team, CFG has acquired clubs around the world and modelled them on the Manchester City style of play and off-field organization.

The strategy has helped to boost the exposure and popularity of the Premier League champions, whose fortunes have been transformed after decades in the doldrums thanks to an infusion of cash from Abu Dhabi since 2008.

Announcing the Mumbai City deal, Manchester City CEO Ferran Soriano said that the group had been looking for years at soccer in India and the Indian Super League (ISL), which is currently in its sixth season.

“Our goal is long term, we are here to stay,” he told a news conference in Mumbai. 

“We are not here to lose money, we will look to help the league generally improve so that everybody makes money, including us. It will take time, we are patient.”

Mumbai City FC’s home ground is the Mumbai Football Arena, which has a capacity of just 8,000 while the team is sitting in seventh place in the 10-team ISL after five games.

“We believe that this investment will deliver transformative benefits to Mumbai City FC, to City Football Group and to Indian Football as a whole,” CFG Chairman Khaldoon Al Mubarak said in the statement.

Reuters had reported earlier on Thursday that CFG, which is majority owned by Abu Dhabi’s Sheikh Mansour bin Zayed Al Nahyan, was likely to acquire a majority stake in Mumbai City.

Existing shareholders in the Mumbai club, including Bollywood actor Ranbir Kapoor and chartered accountant Bimal Parekh, will control the remaining 35 percent stake.

Cricket-mad India is a massive underachiever as far as soccer is concerned and the country of 1.3 billion people has yet to make a single appearance at a World Cup final.

A number of European clubs have, however, set up academies on a franchise basis to get a foothold in a potentially huge market. Spain’s La Liga has invested in a network of training centers to keep an eye on emerging talent and to encourage sales of strips for teams such as Barcelona and Real Madrid.

Traditionally quite popular in Goa, Kerala and Kolkata, interest in soccer in India has grown over the past decade with the arrival of hundreds of artificial pitches in cities such as Bengaluru, Mumbai and Delhi, which have drawn in a young population previously focused chiefly on cricket.

“It is a great endorsement of the increasing appeal of Indian football and for all football fans in India,” Nita Ambani, founder chairperson of the ISL, said in the City Group statement.

English Premier League and European Champions League games now draw millions of viewers and are easily available on India’s big streaming networks for subscriptions of $7 to $13 a year.

The ISL is promoted by billionaire Mukesh Ambani’s Reliance Industries and TV network Star India, which is owned by Walt Disney.

According to the Broadcast Audience Research Council, soccer had a total of 498 million viewers in India in 2018 last year compared with 741 million for cricket.

Mumbai City has had Premier League veterans such as Freddie Ljungberg, Nicolas Anelka and Diego Forlan as marquee players in the past. The first edition of the ISL was won by Atletico de Kolkata, which then counted Atletico Madrid as a co-owner. 


Oil giants’ production cuts come to 1m bpd as they post massive write-downs

Updated 10 August 2020

Oil giants’ production cuts come to 1m bpd as they post massive write-downs

  • Crude output worldwide dropped sharply after the market crashed in April

LONDON: The world’s five largest oil companies collectively cut the value of their assets by nearly $50 billion in the second quarter, and slashed production rates as the coronavirus pandemic caused a drastic fall in fuel prices and demand.

The dramatic reductions in asset valuations and decline in output show the depth of the pain in the second quarter. Fuel demand at one point was down by more than 30 percent worldwide.

Several executives said they took massive write-downs because they expect demand to remain impaired for several more quarters as people travel less and use less fuel due to the ongoing global pandemic.

Of those five companies, only Exxon Mobil did not book sizeable impairments. But an ongoing reevaluation of its plans could lead to a “significant portion” of its assets being impaired, it reported, and signal the elimination of 20 percent or 4.4 billion barrels of its oil and gas reserves.

By contrast, BP took a $17 billion hit. It said it plans to recenter its spending in coming years around renewables and less on oil and natural gas.

Weak demand means oil producers must revisit business plans, said Lee Maginniss, managing director at consultants Alarez & Marsal. He said the goal should be to pump only what generates cash in excess of overhead costs.

“It’s low-cost production mode through the end of 2021 for sure, and to 2022 to the extent there are new development plans being contemplated,” Maginniss said.

London-based BP has previously said it plans to cut its overall output by roughly 1 million barrels of oil equivalent (BOEPD) by the end of 2030 from its current 3.6 million BOEPD.

Of the five, Exxon is the largest producer, with daily output of 3.64 million BOEPD, but its production dropped 408,000 BOEPD between the first and second quarters. The five majors, which include Chevron Corp, Royal Dutch Shell and Total SA, also cut capital expenditures by a combined $25 billion between the quarters.

Crude output worldwide dropped sharply after the market crashed in April. The Organization of the Petroleum Exporting Countries agreed to cut output by nearly 10 million barrels a day to balance out supply and demand in the market.