GCC Football Purchases: Uncertain Investment, Soft Power Opportunity

The states of the Gulf have largely remained undistinguished in global sporting events in all ways except one: they have been far and above the world’s largest investors in foreign sports programs, particularly in association football. Gulf rulers, elites, and sovereign wealth funds have bought the world’s most high-profile and lucrative sports brands, including the UAE-owned Manchester City FC (worth an estimated $766 million) and the Qatar-owned Paris Saint-Germain (worth $661 million). Although Saudi Arabia entered the sporting market late, it has attempted to make up for lost ground through similarly large-scale investments; at the direction of Crown Prince and de facto leader Muhammad bin Salman, Saudi Arabia’s Public Investment Fund purchased Newcastle United FC in October 2021. Bahrain, which wields lesser economic clout, has nonetheless also purchased or invested in several smaller and second-tier teams.

In addition to outright purchases of famous football teams, the Gulf states have also pursued ambitious investments in sports advertising. Qatar and the United Arab Emirates in particular have sponsored teams’ shirts, secured naming rights to European stadiums, and offered to host major global sporting events. Qatar’s hosting of the FIFA World Cup in late 2022 demonstrates the value of this strategy: for one month from late November to late December, the small Gulf state can broadcast the largest tournament in football to an estimated three billion viewers. In preparation for the event, Qatar is said to have spent $200 billion to build stadiums and renovate infrastructure.

The Problem of “Sportswashing”

The degree to which these investments are viable for generating returns, or simply fit a pattern of conspicuous consumption on behalf of rich elites, has been a matter of intense debate within the Gulf region. The driving motivation for the large-scale purchases, however, appears to be as an aid to the countries’ global messaging and “soft power” strategies. In this regard, the Gulf states’ massive sovereign wealth funds are used by their governments to buy teams so as to create a positive image of their country. By purchasing European sports teams, Gulf countries can push a twofold message: they can associate themselves with Western culture, and assert to a Western audience that they are modern and progressive nations with similar values to European ones. In this way, sports investments have helped to overshadow the investing nations’ nondemocratic political structures or human rights abuses—a tendency that has sometimes been nicknamed “sportswashing.”

The extent to which “sportswashing” succeeds at changing public perceptions of the investing nation is unclear. As scholars studying ‘nation branding’ like Simon Anholt argue, if a country is infamous for its human rights abuses, sports investments cannot fully cover up its crimes. For example, according to some news reports, Mohammed Al Faraj was 15 years old when he was arrested in 2017 for attending anti-government protests when he was nine years old. His family has sent a letter to Lionel Messi to intervene in the case to save his life. Whether the world’s most famous football player will speak up on al-Faraj’s behalf or not has yet to be seen, but the boy’s appearance in Western media has already damaged bin Salman’s attempts to rebrand himself as a football patron. On the other hand, states with less brutal reputations could benefit more from “sportwashing” in the sense that there is less they need to cover up. Although both Qatar and the United Arab Emirates are nondemocratic states, both are positively portrayed in much of the world, possibly as a function of their generous sports investments.

A Bad Investment?

In addition, sports investments are sometimes seen as a way to diversify the Gulf states’ sources of income as they seek to promote non-oil sources of revenue. However, Gulf states do not buy teams to make money, and statistics verify that their financial returns have consistently failed to outweigh investments—although the revenue gained from the investments is still substantial, helping to offset the costs.

As stated above, sports investments have been used as a soft power tool for nation branding, boosting small Gulf states’ global images, developing relations with other countries, and gaining the hearts of foreign observers. The largest economic contribution gained from sports investments comes from increased tourism and financial gain from advertisements of Gulf brands. Tourism numbers have consistently risen throughout the Gulf in recent years, and it is certain that the acquisition of the world’s top football teams has helped to shape this trend.

Moreover, brand names on team shirts and stadiums can help Gulf state-run companies to increase their revenues. The global growth and success of Qatar Airways, Emirates, and Etihad, has come about due in part to massive commercial advertisements in sports. Taken together, the three airlines have a total sum of nearly $50 billion in income; because Qatar and the UAE have only 1.5 million citizens between them, most passengers on the three airlines are foreigners.

Meanwhile, Gulf states have also explored the soft power of e-sports and started to invest in online sports as well. For instance, Saudi Arabia’s Savvy Gaming Group bought two European game organization companies for $1.5 billion in January. One Saudi prince claimed that the country would contribute $21.3 billion, or one percent of its GDP per year, toward e-sports investments by 2030. At the same time as Gulf youths have increasingly turned to e-sports competitions at the lower level, Gulf states have attempted to score similar victories against each other through acquiring gaming companies and organizing e-tournaments.

All in all, investing in sports is an innovative strategy that Gulf states have historically utilized to boost their soft and economic power. While soft power and “sportswashing” has had its limitations—it does not change the image of countries with pre-existing reputations—it can nonetheless function as an effective non-political instrument in international politics. On the other hand, sports investments generally do not generate revenue, and there is no direct effect on diversification of oil-rich economies, although the indirect contributions cannot be dismissed.

Source: Gulf International Forum

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