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Manchester City's New Owners

The Sheikhs Take on the Oligarchs in British Football

By Maik Grossekathöfer and Gerhard Pfeil

For years, Manchester City has been overshadowed in the British Premier League by richer and more glamorous teams like Chelsea and Manchester United. But now the new owners from Abu Dhabi have announced an unparalleled shopping spree that will shake up British football.

The offer that English football star Wayne Rooney received last Monday seemed like a joke at first. Shortly after 6 p.m., less than six hours before the end of the transfer period, British sports agent Jerome Anderson contacted Rooney, a striker for Manchester United, the world's most famous football club and the current winner of the Champions League. Anderson asked Rooney whether he would be interested in switching to local rival Manchester City, which finished in ninth place in the Premier League last season. Rooney thought for a moment and turned down the offer.

But that may turn out to have been a mistake. It was probably not entirely clear to Rooney at the time that an earthquake had struck European football that same day, when the Abu Dhabi United Group (ADUG) announced that it had acquired Manchester City for roughly €250 million ($363 million). The investment company is headed by Sheikh Mansur bin Zayed al-Nahyan, a football fan and a member of the ruling family of Abu Dhabi, whose national investment fund, the Abu Dhabi Investment Authority, controls assets worth $900 billion (€620 billion).

The Manchester deal, signed two Sundays ago in a suite at the Emirates Palace Hotel in Abu Dhabi, will change the power structure in football. It will redirect the international flow of money in the industry, and it signifies a general attack on the current top dogs in the Premier League, on Manchester United and on Roman Abramovich, the Russian billionaire owner of FC Chelsea.

Manchester City was overshadowed by United for years. It was an uninspiring club that won its last championship in 1976, played in the second-tier league for several years and was plagued by financial problems. But the takeover transformed Manchester City into a blue-chip club overnight.

"We want to become the world's biggest club," ADUG representative Suleiman al-Fahim said in his first speech in Manchester. A few of his listeners were still laughing, and fans outside were dressed as sheikhs to mock the man from the desert. But they were still unaware of his plans at the time.

These include a cash injection of €660 million ($957 million) and a promise to recruit 18 new "world-class" players -- for starters. If the club fails to achieve the success its new owners anticipate, they will simply up the ante. "Money is no object," says Fahim.

The deal had hardly been sealed before the club's new owners began looking for their first high-profile new acquisition. Rooney had turned them down. Dimitar Berbatov was already taken. Manchester United Coach Alex Ferguson had apparently picked up the Bulgarian striker from the airport himself after hearing that the competition from Abu Dhabi was eying his new signing.

Instead, Fahim made an offer for Brazilian star striker Robinho, who had made it clear that he was eager to leave Real Madrid for the financially stronger Premier League. Fahim outbid his competitor, Abramovich's Chelsea. For a €40 million ($58 million) transfer fee, Robinho made the switch to northern England. It seems a new rivalry between Russian oligarchs and Arab sheiks on the playing field of the world's most glamorous football league has begun.

'Each Team in this League Is a Brand'

British football has had its fair share of encounters with businessmen. In fact, most of the top clubs in the Premier League are in the hands of outside investors, including American billionaires (Manchester United, Liverpool, Aston Villa), a Russian oligarch (Chelsea), a Frenchmen of Russian descent (Portsmouth) and wealthy Britons (Arsenal, Tottenham). In no other league is so much money collected in the form of revenues and then spent on players. Prior to this season, the clubs spent €617 million ($895 million) -- three times as much as in Germany's Bundesliga -- to sign new players. In the 2006/07 season, the league earned revenues of €2.4 billion ($3.5 billion). The clubs earn €1.3 billion ($1.9 billion) a season in television revenues alone.

What attracts owners to the Premier League is its advertising value. Its matches are broadcast in more than 200 countries. "Each team in this league is a brand; anyone hoping to gain name recognition for his products can't go wrong with a Premier League Club," says Russel Hills, a Scottish financial expert who has kept track of the boom in British football for years.

It was only a matter of time before a sheikh bought up one of the sought-after clubs. Manchester City just happened to be available.

The previous owner, Thaksin Shinawatra, had been looking for a buyer. The former Thai prime minister, who had bought City only a little over a year ago, had run into financial problems and could no longer afford the football club. Thaksin faces corruption charges at home, and his assets in Thailand and Switzerland have been frozen.

In the early summer, Thaksin was already negotiating with three potential buyers from the Gulf region, but they were unable to make up their minds. In Abu Dhabi, Sheikh Mansur heard about the negotiations and sent Fahim to submit a bid. The resulting deal brought together two colorful men, both fond of the public spotlight. When Thaksin and his wife attended the opening ceremony of the Beijing Olympics, they were sitting in the VIP stands. Fahim, for his part, likes to be seen with Hollywood stars like Leonardo DiCaprio and Demi Moore. The deal materialized thanks to an equally high-profile woman.

Amanda Staveley, 35, blonde, attractive, worth an estimated €22 million ($32 million), lives in London, where she is the director of PCP Capital Partners, an investment and financial consulting firm. The sheikh had hired her to acquire a football club.

Staveley is not unknown in England, where Prince Andrew once proposed to her. She opened a restaurant near Newmarket when she was 22, has been a member of the board of a corporation that markets a sexual potency cream, and she founded a conference center in Cambridge in which King Abdullah II of Jordan is said to have invested.

Staveley likes to show business partners the results of a psychological test that supposedly confirms her leadership qualities. "Amanda is a woman of action," the document reads. Her firm, PCP Capital Partners, advises Dubai International Capital. The emirate had planned to buy FC Liverpool last spring, but the deal fell through. "Hardly any other non-Arab enjoys so much confidence in the Gulf states as Amanda," says an insider.

Staveley values the glamour of British football. "We should be very proud of our football," she says. "Everyone wants to invest here. A club like City practically sells itself."

It wasn't difficult to deduce that a deal with Manchester City was in the works. In late August, Staveley was seen sitting with Thaksin in his box at a match between City and West Ham United. But no one drew any conclusions, and the deal remained a secret until it was signed.

The Manchester City acquisition has sparked a new exuberance. Kevin Parker, head of the fan club organization, feels a deep sense of relief. "We haven't won anything in 30 years, and we are longing to win a championship." The most powerful players' agents are suddenly eager to get an in with the club and the sheikh, knowing full well that money will literally come bubbling out of the ground around City in the future.

A Battle for Prestige with Dubai

Fahim is even bragging that Cristiano Ronaldo, a striker with Manchester United, will switch to City soon, although no one has talked to the player yet, or to his club. The ADUG wants to pay a transfer fee of €165 million ($240 million) for the Portuguese superstar, but does he want to make the switch? As long as City is not playing in the Champions League, which pits the best teams against one another, the club cannot be truly appealing.

Whether the Arabs will ever manage to bring their latest investment into the profit zone, given their costs, is difficult to say. But profitability is probably not their chief concern. The ruling family in Abu Dhabi takes in an additional $1 billion (€690 million) in annual revenues for each one-dollar increase in the price of a barrel of oil on the world market. "We have deep pockets," says Fahim.

For the Gulf emirate, which has an estimated 10 percent of world oil reserves, the catch in the football market is a victory in its battle for prestige with neighboring Dubai. The two emirates, which have been rivals for years when it comes to erecting the most opulent hotels and tallest buildings, have recently taken their competition to culture and sports. Branches of the Guggenheim and Louvre Museums are under construction in Abu Dhabi. Beginning in 2009, the emirate will have its own Formula One Grand Prix. The purchase of Manchester City is yet another jewel in Abu Dhabi's crown.

The deal made Mark Hughes, City's coach, a very happy man. The former Bayern Munich striker joined the club this summer, leaving Blackburn Rovers at a time when there were still many unpaid bills at City. Now the Welshman feels like a sheikh in seventh heaven. "It's like winning the lottery and having a birthday at the same time."

Fahim wants City to win the Champions League in three years, a feat Abramovich still hasn't managed in what has now been five years, despite having invested at least €600 million in the club.

Suleiman al-Fahim plans to watch his first home match this coming weekend -- and also expects to see evidence of the team's first improvements -- when Manchester City hosts Chelsea.

"I hope the team will play well on that day," Fahim said. It sounded like a threat.

Translated from the German by Christopher Sultan