Manchester City May Not Be as Rich as You Thought

It’s been happening quietly, since for some reason the media don’t seem all that eager to visit the possibility that their original version of the story was full of exaggerations and mistakes, but some of the grandiose claims about the purchase of Manchester City by the Abu Dhabi United Group are finally starting to go up in smoke. For instance: the notion that City’s new owners—usually described as “the investment arm of the Abu Dhabi royal family”—were sitting on $850 billion which they were prepared to pour into the club. This astonishing, not to say newspaper-selling, claim turns out to have been based on a simple misconception.

“The investment arm of the Abu Dhabi royal family” is the Abu Dhabi Investment Authority, or ADIA, which is widely believed to the be the world’s largest sovereign wealth fund. The ADIA does have hundreds of billions in assets, but they aren’t sitting in a giant bank account ready to be spent on Cristiano Ronaldo, they’re invested throughout the world economy: in Citigroup, for instance, $7.5 billion of whose stock the ADIA acquired last year. Even if the ADIA was interested in running Manchester City, much higher-level financial commitments than anything to do with the English Premier League would limit the money available to City to a fraction of some of the wild sums that have been reported.

Not that it matters, because as it happens, the universally reported claim that the ADIA was behind the takeover wasn’t really accurate in the first place [registration required]. In fact, according an unequivocal report by Thomson Merger News, “the Abu Dhabi Investment Authority has no involvement whatsoever.”

The Abu Dhabi United Group, the holding company set up to handle the purchase of the club, is apparently a front for specific members of the royal family—most significantly Sheikh Mansour bin Zayed Al-Nahyan, a well-known horse-racing enthusiast and the brother of the President of the UAE—rather than for the state-controlled wealth fund itself. The politics of the royal family are murky enough that it’s impossible to say to what degree the ADIA and its billions are implicitly or unofficially behind the purchase. But there’s no legal relationship, and as wealthy as Sheikh Mansour undoubtedly is, there’s all the difference in the world between one man’s private fortune and the collective resources of one of the world’s wealthiest oil states.

There are experts, including Anil Bhoyrul, the editor of Arabian Business magazine, who insist that the ADIA is entirely behind the various fronts and that the lack of a legal relationship is meaningless. But Bhoyrul, in the days after the sale, was one of the loudest voices repeating the absurd claims—remember Ronaldo for £135 million?—made by Sulaiman al-Fahim, the real-estate developer known as “the Donald Trump of Abu Dhabi,” which is apparently a compliment in Abu Dhabi, who was originally the public face of the Abu Dhabi United Group during the takeover.

Those claims have largely been repudiated: the publicity-loving Sulaiman, who hosts his own reality TV show in the UAE, has been removed from the public eye by the powers behind the deal, and the Guardian now quotes “sources close to the deal” who are “distancing themselves from his talk of a lavish squad paid astronomical salaries in favour of a more sober approach to the transfer market and development of the club.” In other words, the Abu Dhabi United Group are now “understood to see the purchase as a long-term investment” which they will expect to bring them a profit, rather than as a kind of glamorous toy on which they can lavish the profits of their other businesses. This latest attitude is completely at odds with Bhoyrul’s heady statements in the aftermath of the deal (football changed forever, etc.), which increasingly seem to reflect the bravado of his sources rather than the reality of the deal.

We’ll know for sure in January, I guess, or next summer. At the moment, though, you don’t seem to have to pull very hard on any of the threads of this story for the whole thing to come apart. And it’s quite clear that rather than waiting till they knew something before printing it, the media have essentially been willing to reprint any claim made by any source about this deal as though it were verified truth. Even the Guardian article about the club’s newly reduced expectations, which completely revises all the paper’s earlier claims, repeats the original mistake of conflating the Abu Dhabi United Group with the “private investment fund of the Abu Dhabi royal family.”

Well, nobody verifies anything in football, and it’s not like the Guardian sports desk has a bureau in Dubai. Don’t be surprised if the truth in Man City’s case turns out to be a few feet shorter than the full crest of the hype. But keep an eye on gas prices in Asia. It’s a crazy economy, and you never know what could happen.