As a side point the FT Weekend have an article on the "situation" in English football, remains to be seen what line they take.
The demographic point is interesting though
Plot thickens in ADUG takeover of Man City
Mushtak Parker I Arab News
LONDON: The headlines are perhaps predictable — ‘Abu Dhabi Doo’ and ‘Manic Monday’ — just two of the bold ones in British tabloids in the last two days. They were of course alluding to the dramatic takeover last weekend of Manchester City Football Club by the Abu Dhabi United Group for Development and Investment (ADUG) from former Thai Premier Thaksin Shinawatra, who is strapped for cash after his assets were frozen by the Thai authorities.
However in a space of few days, Sulaiman Al-Fahim, chief executive of Hydra Properties, who is fronting the takeover, has raised the ante in English football effectively “out Abramoviching Chelsea owner Roman Abromavich”, who a few years ago similarly came in from the cold and started throwing enormous amounts cash into an English football team, Chelsea.
Al-Fahim exudes a boyish naivety the likes of which has never been seen in the English game before. Who else but a child would boast that he has deeper pockets than a rival and this is just the beginning.
Whether Al-Fahim, and for that matter his main backer Sheikh Mansour Bin Zayed Al-Nahyan, the brother of the Abu Dhabi ruler and the Minister for Presidential Affairs in the UAE Cabinet, truly understand the nature of the beast they are investing in remains a moot point. The English game with its entrenched tradition and obsessive football fans is unique. Bill Shankly, the great Liverpool manager, once famously remarked: “Some people believe football is a matter of life and death, I am very disappointed with that attitude. I can assure you it is much, much more important than that.”
English football fans are very loyal to their clubs, a loyalty that is almost tribal in nature. They are also fair — always willing to give a new owner or manager or player a chance to settle in and to prove himself. But they can also be fickle and turn on anyone at the slightest sign of trouble or incompetence.
Al-Fahim’s crass triumphalism and puerile exuberance is not helping either. “Arabs with more money than sense” stressed one Mancunian on the red side of Manchester. A Blues lady fan on the other side of the City, while welcoming the ADUG takeover, was more sanguine: “I have been watching Manchester City since I was a child. The game has changed a lot since then. It is not something I agree with. But this is the trend in the modern game. So I suppose we have to go with the times.”
Talk of a Top Ten ‘Fantasy Wish List’ of players including Kaka, Ronaldinho, Cesc Fabrigas and Fernando Torres, and the last-minute English record £32.5m acquisition of Robinho from Real Madrid and a reported GBP135m bid for Manchester United’s Ronaldo, smack of a misplaced bravado which seems to suggest that money can buy success at any cost, and which could have manifold implications.
The takeover, for instance, is currently undergoing the mandatory due diligence process and needs the final approval of the English FA. Making a motley of wild claims could impact on this process.
Already, the more sober English football pundits, are calling on the “Arab trillionaires” to protect the heartbeat of the English game. England Under-21 coach Stuart Pierce, a former manager of Manchester City, warned that the new influx of foreign money must strike a balance between foreign stars and nurturing local talent. Manchester City is one of the few English teams that has a thriving academy system through which players such as Shaun Wright-Phillips, Sam Johnson and Micah Richards have emerged. “We cannot lose the academy system. Who wants their club to pay GBP15m for a player when they can cheer one of their own.”
ADUG at a stroke has transformed Manchester City into the richest club in Britain, if not Europe, and has contributed to a dramatic rise in transfer and wage inflation in the process, admittedly started by Abramovich when he bought Chelsea a few years ago.
However, this takeover saga is far from over. Many questions remain unanswered, especially about the financing behind the rhetoric. ADUG was set up only last Friday as a special purpose vehicle (SPV) specifically to front this deal. This suggests that the deal is a classical private equity one — the investor comes in, adds value then exits at the right time with a handsome profit.
The FA due diligence could consider why Hydra Properties and its CEO Sulaiman Al-Fahim are fronting the takeover. Hydra itself was only established three years ago as a real estate investor, albeit is already involved in 10 luxury leisure-cum-residential projects in Abu Dhabi and the Gulf. Perhaps more interestingly, Hydra Properties was the official sponsor of the UAE Olympic team at Beijing 2008.
Hydra in fact is a wholly-owned subsidiary of Abu Dhabi’s Royal Group, whose chairman is Sheikh Tahnoon bin Zayed Al-Nahyan, brother of Sheikh Mansour. “Our core competencies lie in our thorough expertise in the fields we operate in,” stresses Royal Group. Other than the research into Manchester City Football Club prior to the takeover, Royal Group and Hydra’s expertise in English Premier League football as a business, is nonexistent.
Mansoor and Tahnoon, however have one thing in common with the English — a deep love for horses. Sheikh Mansoor is the chairman of the Emirates Racing Authority, while Sheikh Tahnoon owns the Al Reef Stable. Both own several horses and are heavily involved in horse racing in the Gulf and France. Sheikh Tahnoon’s only link with football is his second vice-presidency of the DH30m Al Ain Soccer Academy in the UAE set up in cooperation with Inter-Milan and aimed at improving local and regional talent.
It would be interesting to see how the FA applies its ‘fit and proper’ criteria for football club owners in this takeover. After the controversial Shinawatra acquisition of Manchester City and the takeovers of Manchester United, Chelsea and Liverpool, the FA has come under criticism for its lack of scrutiny of deals involving foreign buyers.
Al-Fahim has one other passion — chess, and is the president of the UAE Chess Association.
The Manchester City takeover is not an isolated one by GCC private equity suitors. Earlier this year, another UK iconic brand, Aston Martin, was snapped up from Ford Motor Company by GCC investors led by The Investment Dar of Kuwait, in a deal worth £522m. The new owners are even contemplating a return of Aston Martin to motor racing.
Other GCC investment vehicles already own water utilities, self-storage companies, business parks, hotels, wind farms, commercial offices and banks in the UK.
The ADUG takeover of Manchester City may well pave the way for other such moves by Saudi, Qatari and Dubai investors, who are increasingly becoming very sophisticated in their asset allocation and portfolio management. If the Abu Dhabis turn out to be true football investors as opposed to fair-weather private equity merchants, then the blue side of Manchester could be in for a long-awaited upstaging of their famous red rivals.
There is one other important upside to the takeover of Manchester City. The demography of the GCC region points to one of the youngest populations in the world — some 60 percent of the GCC population is under 25-years-old. This makes the GCC an ideal market for Manchester City merchandise. Just as Singapore and China are money-spinners for rival Manchester United merchandise.
Not sure it's particularly well informed or even insightful but.....
http://www.arabnews.com/?page=8§ion=0&article=113879&d=5&m=9&y=2008
As a side point the FT Weekend have an article on the "situation" in English football, remains to be seen what line they take.
The demographic point is interesting though
Plot thickens in ADUG takeover of Man City
Mushtak Parker I Arab News
LONDON: The headlines are perhaps predictable — ‘Abu Dhabi Doo’ and ‘Manic Monday’ — just two of the bold ones in British tabloids in the last two days. They were of course alluding to the dramatic takeover last weekend of Manchester City Football Club by the Abu Dhabi United Group for Development and Investment (ADUG) from former Thai Premier Thaksin Shinawatra, who is strapped for cash after his assets were frozen by the Thai authorities.
However in a space of few days, Sulaiman Al-Fahim, chief executive of Hydra Properties, who is fronting the takeover, has raised the ante in English football effectively “out Abramoviching Chelsea owner Roman Abromavich”, who a few years ago similarly came in from the cold and started throwing enormous amounts cash into an English football team, Chelsea.
Al-Fahim exudes a boyish naivety the likes of which has never been seen in the English game before. Who else but a child would boast that he has deeper pockets than a rival and this is just the beginning.
Whether Al-Fahim, and for that matter his main backer Sheikh Mansour Bin Zayed Al-Nahyan, the brother of the Abu Dhabi ruler and the Minister for Presidential Affairs in the UAE Cabinet, truly understand the nature of the beast they are investing in remains a moot point. The English game with its entrenched tradition and obsessive football fans is unique. Bill Shankly, the great Liverpool manager, once famously remarked: “Some people believe football is a matter of life and death, I am very disappointed with that attitude. I can assure you it is much, much more important than that.”
English football fans are very loyal to their clubs, a loyalty that is almost tribal in nature. They are also fair — always willing to give a new owner or manager or player a chance to settle in and to prove himself. But they can also be fickle and turn on anyone at the slightest sign of trouble or incompetence.
Al-Fahim’s crass triumphalism and puerile exuberance is not helping either. “Arabs with more money than sense” stressed one Mancunian on the red side of Manchester. A Blues lady fan on the other side of the City, while welcoming the ADUG takeover, was more sanguine: “I have been watching Manchester City since I was a child. The game has changed a lot since then. It is not something I agree with. But this is the trend in the modern game. So I suppose we have to go with the times.”
Talk of a Top Ten ‘Fantasy Wish List’ of players including Kaka, Ronaldinho, Cesc Fabrigas and Fernando Torres, and the last-minute English record £32.5m acquisition of Robinho from Real Madrid and a reported GBP135m bid for Manchester United’s Ronaldo, smack of a misplaced bravado which seems to suggest that money can buy success at any cost, and which could have manifold implications.
The takeover, for instance, is currently undergoing the mandatory due diligence process and needs the final approval of the English FA. Making a motley of wild claims could impact on this process.
Already, the more sober English football pundits, are calling on the “Arab trillionaires” to protect the heartbeat of the English game. England Under-21 coach Stuart Pierce, a former manager of Manchester City, warned that the new influx of foreign money must strike a balance between foreign stars and nurturing local talent. Manchester City is one of the few English teams that has a thriving academy system through which players such as Shaun Wright-Phillips, Sam Johnson and Micah Richards have emerged. “We cannot lose the academy system. Who wants their club to pay GBP15m for a player when they can cheer one of their own.”
ADUG at a stroke has transformed Manchester City into the richest club in Britain, if not Europe, and has contributed to a dramatic rise in transfer and wage inflation in the process, admittedly started by Abramovich when he bought Chelsea a few years ago.
However, this takeover saga is far from over. Many questions remain unanswered, especially about the financing behind the rhetoric. ADUG was set up only last Friday as a special purpose vehicle (SPV) specifically to front this deal. This suggests that the deal is a classical private equity one — the investor comes in, adds value then exits at the right time with a handsome profit.
The FA due diligence could consider why Hydra Properties and its CEO Sulaiman Al-Fahim are fronting the takeover. Hydra itself was only established three years ago as a real estate investor, albeit is already involved in 10 luxury leisure-cum-residential projects in Abu Dhabi and the Gulf. Perhaps more interestingly, Hydra Properties was the official sponsor of the UAE Olympic team at Beijing 2008.
Hydra in fact is a wholly-owned subsidiary of Abu Dhabi’s Royal Group, whose chairman is Sheikh Tahnoon bin Zayed Al-Nahyan, brother of Sheikh Mansour. “Our core competencies lie in our thorough expertise in the fields we operate in,” stresses Royal Group. Other than the research into Manchester City Football Club prior to the takeover, Royal Group and Hydra’s expertise in English Premier League football as a business, is nonexistent.
Mansoor and Tahnoon, however have one thing in common with the English — a deep love for horses. Sheikh Mansoor is the chairman of the Emirates Racing Authority, while Sheikh Tahnoon owns the Al Reef Stable. Both own several horses and are heavily involved in horse racing in the Gulf and France. Sheikh Tahnoon’s only link with football is his second vice-presidency of the DH30m Al Ain Soccer Academy in the UAE set up in cooperation with Inter-Milan and aimed at improving local and regional talent.
It would be interesting to see how the FA applies its ‘fit and proper’ criteria for football club owners in this takeover. After the controversial Shinawatra acquisition of Manchester City and the takeovers of Manchester United, Chelsea and Liverpool, the FA has come under criticism for its lack of scrutiny of deals involving foreign buyers.
Al-Fahim has one other passion — chess, and is the president of the UAE Chess Association.
The Manchester City takeover is not an isolated one by GCC private equity suitors. Earlier this year, another UK iconic brand, Aston Martin, was snapped up from Ford Motor Company by GCC investors led by The Investment Dar of Kuwait, in a deal worth £522m. The new owners are even contemplating a return of Aston Martin to motor racing.
Other GCC investment vehicles already own water utilities, self-storage companies, business parks, hotels, wind farms, commercial offices and banks in the UK.
The ADUG takeover of Manchester City may well pave the way for other such moves by Saudi, Qatari and Dubai investors, who are increasingly becoming very sophisticated in their asset allocation and portfolio management. If the Abu Dhabis turn out to be true football investors as opposed to fair-weather private equity merchants, then the blue side of Manchester could be in for a long-awaited upstaging of their famous red rivals.
There is one other important upside to the takeover of Manchester City. The demography of the GCC region points to one of the youngest populations in the world — some 60 percent of the GCC population is under 25-years-old. This makes the GCC an ideal market for Manchester City merchandise. Just as Singapore and China are money-spinners for rival Manchester United merchandise.