Stefan Borson: This is how Man City and Newcastle’s owners are involved in mega-money EA deal
Manchester City and Newcastle United’s owners have been heavily involved in the recent purchase of Electronic Arts (EA).
The Saudi Public Investment Fund (PIF) is spearheading a consortium, which includes Man City‘s co-owners Silver Lake, to buy EA for £41billion.
Silicon Valley-based private equity firm Silver Lake saw its shares in Man City reduce to around 17 per cent last year, while Sheikh Mansour owns a controlling stake at the Etihad Stadium.
PIF purchased Newcastle from Mike Ashley alongside the Reuben Brothers and Amanda Staveley’s PCP Capital Partners in October 2021.
PIF has now joined forces with Silver Lake and other investors to seal the mega-money purchase of EA – the maker of the popular video game EA Sports FC.
Newcastle’s deals could have to be approved after PIF latest
Former Man City financial adviser Stefan Borson exclusively told Football Insider any deals Newcastle do with EA could now have to receive the necessary approval, with PIF’s investment potentially making it an associated party transaction (APT).
Newcastle have seen their progress blocked by the APT rules since their Saudi owners took over at St James’ Park four years ago.
Speaking exclusively to Football Insider about the EA deal, Borson said: “It doesn’t mean a great deal except that where there are deals that football clubs do as a matter of course with EA in particular, obviously the scale of their video game franchise is big and significant in the game.
“There will be some sponsorship deals, certainly EA are already a partner of Manchester City. I haven’t checked the Newcastle situation, but that would then potentially fall into a deal that needs to be approved.
“Now, it wouldn’t be difficult to approve it because there’s so many comparatives for it that you wouldn’t have a problem, but it’s just an additional reinforcement of how where you’ve got very large scale investors anyway, so for example, there was a piece in the Financial Times purely looking at Silver Lake’s move to become the preeminent venture capital house in the world, and the figurehead there, Egon Durban, is City’s director.
“He’s not just the key guy at Silver Lake, but he’s also the actual individual who’s on City’s board.”
Silver Lake initially bought a 10 per cent stake in the City Football Group (CFG) – Man City’s ownership group – in 2019 before later increasing its shareholding.
Tottenham could agree blockbuster takeover deal
Borson believes Tottenham could be bought by a sovereign wealth fund and a private equity firm in the future following the developments surrounding PIF and Silver Lake.
“It’s just interesting that sort of convergence between major global investors and those major investors in global business also investing in the Premier League,” said Borson.
“There are other significant non-sovereign fund related investors. Silver Lake are obviously an independent fund, but also they do partner a lot with sovereign wealth funds, so you have this combination.
“It would not be a surprise, for example, if ultimately Tottenham Hotspur ended up being purchased by a combination of some form of sovereign wealth fund and potentially some form of Silicon Valley, venture capital, private equity house.
“I think it’s more an indication of just how profile the Premier League is that investors of this nature are the same investors that are looking to buy TikTok, EA and other very significant, high-profile consumer businesses and also are involved in football.”
Tottenham’s owners are currently insisting the club is not for sale after recently turning down approaches from interested parties.
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