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. 

Kuwait’s debt law gridlock poses first economic test

Updated 01 October 2020

Kuwait’s debt law gridlock poses first economic test

  • Oil exports accounted for 89 percent of revenues for Kuwait last fiscal year

DUBAI: Kuwait’s new Emir Sheikh Nawaf Al-Ahmad Al-Sabah faces the urgent task of overcoming legislative gridlock on debt legislation needed to tackle a liquidity crisis in the country.

Parliament has repeatedly blocked the bill, which would allow Kuwait to tap international debt markets, but the issue has gained urgency as low oil prices and COVID-19 strained state finances and led to the rapid depletion of available cash reserves.

“The country needs to quickly pass a new public debt law to ease liquidity shortages,” said Mohamed Abu Basha, head of macroeconomic analysis at EFG Hermes.

The new ruler, sworn in on Wednesday after the death of his brother Emir Sheikh Sabah Al-Ahmad Al-Sabah, takes the helm with the nearly $140 billion economy facing a yawning deficit of $46 billion this year.

Oil prices at about $40 a barrel are largely below what is needed to balance the OPEC member state’s budget, in which public sector salaries and subsidies accounted for 71 percent of spending for the 2020-2021 fiscal year.

“The deadlock on the funding situation directly threatens the government’s ability to function and pay salaries, which represents a significant escalation in the brinksmanship between the two branches of government,” said Moody’s.

The ratings agency, which downgraded Kuwait last week due to higher liquidity risks and concerns over its institutional strength, said it expected the proposed debt law to be passed by emiri decree between October and December.

Parliamentary elections are due to be held later this year, though authorities have not yet set a date.

Lawmakers opposed to the bill have called for clarity on government plans to reduce reliance on oil exports, which accounted for 89 percent of revenues last fiscal year. Analysts say parliament has hindered efforts to push through sensitive reforms such as introducing value-added tax in a country whose citizens are used to generous state subsidies.

Kuwait could see its economy shrink by 7.8 percent this year, Deutsche Bank has estimated, in what would be one of the worst economic crunches among Gulf oil exporters.

However, Sheikh Nawaf’s succession is not expected to significantly alter Kuwait’s economic outlook, at least in the short term.

“On the economic side, we think it’s more of the same,” said Mohammed Ali Yasin, chief strategy officer at Al Dhabi Capital.

But he added that resolving the debt saga would boost prospects for the country.