City Football Group just acquired Belgian club Lommel SK. With the addition of this second division team, CFG now owns nine clubs, including the Premier League’s Manchester City.
Lommel SK, like most lower-tier football clubs, was struggling in the wake of the global pandemic. It had recently been denied a license for the coming year due to outstanding debt, and had been put up for sale in April. Lommel eventually received its license on May 10 after CFG intervened on the club’s behalf.
Lommel is in the Limburg province, near Belgium’s border with the Netherlands. The club plays in an 8,000 person stadium, and was in sixth place when its season came to its abrupt end. Part of CFG’s attraction was Lommel’s “strong Academy and focus on youth development.” While the terms of CFG’s acquisition haven’t been disclosed, the price tag was not likely an issue.
Private Equity Stake Helps CFG Buy Lommel
In December, the private equity company Silver Lake Partners bought a 10% stake in CFG for $500 million. That cash infusion couldn’t have come at a better time. The coronavirus has created a buyers market, much like the conditions that allowed CFG to buy its first football club.
Abu Dhabi United Group, the forerunner of CFG, bought Manchester City in Sept. 2008, the same month the investment bank Lehman Brothers collapsed. Spearheaded by Sheikh Mansour Bin Zayed Al Nahyan, the group believed Manchester City was a good long-term investment. Since the dark days of that financial crisis, Man City has emerged as one of the world’s most valuable sports teams.
Silver Lake Partners was the second investment group to buy a stake in CFG. In 2015, the Chinese consortium China Media Capital invested $400 million for a 13% stake in CFG. That investment came within days of Chinese President Xi Jinping’s photo op with Manchester City.
CFG’s Impressive Acquisition History
Lommel SK is CFG’s ninth acquisition, but it is hardly likely to be its last, especially in a market where bargain prices abound. Even in healthy economic conditions, CFG has found opportunities to grow its brand.
Manchester City (2008)
New York City FC (2013)
Melbourne City FC (2014)
Yokohama F. Marinos (2014)
Montevideo City Torque (2017)
Girona FC (2017)
Sichuan Jiuniu FC (2018)
Mumbai City FC (2019)
Lommel SK (2020)
Meanwhile, even more private equity groups are looking to invest in professional sports. It will be interesting to see if they eventually become CFG’s investors or competitors.
