The Gulf countries have a reputation for making astronomical investments with interests beyond financial profit. The recent takeover of Newcastle United Football Club, a well-established football, or soccer, club in England, by a Saudi consortium led by the state sovereign wealth fund, the Public Investment Fund, for £305 million (approximately $416 million) is among such prestige investments. The Saudi consortium joins the Abu Dhabi United Group for Development and Investment, which bought Manchester City Football Club in 2008, as well as Qatar Sports Investments, a subsidiary of the Qatar Investment Authority, which bought Paris Saint-Germain in 2011. Qatar Airways and Emirates Airlines have also sponsored world-famous clubs. Such investments boost the public profile of the Gulf countries. However, as they increase financial inequalities among football clubs and threaten to entangle football clubs in Gulf political agendas, these investments might pose reputational and other risks for the football sector – and the Gulf countries themselves.
Image Projection and Competition
As Gulf sovereign wealth funds amass oil revenue and their managements venture into new and more public areas of global investments, they present a fresh face of Gulf prosperity. Gulf leaders have ramped up efforts to deploy their petro-capital to diversify both their economies at home and their investments abroad.
The windfall from oil and financial assets has facilitated the hosting of global events such as Expo 2020 Dubai and the 2022 FIFA World Cup in Qatar. Such events project a positive image of Gulf states abroad: capable and integrated into global markets and popular culture. The acquisition of football teams with millions of fans from all over the world significantly amplifies this publicity and contributes to the global recognition of Gulf countries. In addition, the Gulf states’ ownership of some of the biggest names in football, such as Paris Saint-German and Manchester City, reflects the regional competition among Gulf states on the international stage. From this perspective, Saudi Arabia’s acquisition of Newcastle United may be an attempt to close this publicity and competitive gap with its neighbors.
Saudi Arabia’s acquisition of Newcastle United, a team with a deep-rooted history but which remains stranded at the bottom of the Premier League table, may not be viewed as prestigious as the club acquisitions of its neighbors. However, if such a well-established team ascends in the Premier League, it will build Saudi Arabia’s reputation in the field of sports and earn the undying appreciation of Newcastle fandom. When the news first broke that the Saudi consortium had bought Newcastle United, Newcastle fans gathered at St James’s Park for the celebration, wearing Arab headdresses and brandishing Saudi flags, showing both the hope for success and the appreciation of the Newcastle community. In addition to serving as prestige investment, buying broadcast rights and organizing tournaments in Gulf countries promote Gulf national agendas and are opportunities for economic diversification.
Promoting Youth in Sports and Building National Identity
In their economic diversification plans, the Gulf countries place great emphasis on their youth populations and hope to prepare their economies for demands and constraints that will be posed in the post-oil era. The Gulf states are encouraging youth participation in sports to promote a healthy lifestyle. For instance, Saudi Vision 2030 highlights the aim of increasing the physical, psychological, and social well-being of Saudi citizens and residents to improve their happiness. The Saudi government has emphasized that it is seeking to collaborate with the private sector to build sports and athletic facilities. Also, the Saudi government is striving for the kingdom to be a leader in certain sports both regionally and globally.
Other Gulf countries are similarly focusing on sports on these same multiple fronts: putting youth at the center of a public education effort encouraging healthier lifestyles and elevating the profile of sports in their societies overall. They are doing this for reasons of prestige and nationalism and in support of long-term economic diversification goals. The Gulf states, particularly the UAE and Qatar, host high-profile powerboat races, soccer and tennis tournaments, and Formula 1 championships. The UAE, Qatar, and Bahrain also host national sports days to reduce health risks and encourage participation in sports. Saudi Arabia doesn’t yet have an official sports day, but on the kingdom’s 91st National Day, the Saudi Sports for All Federation launched an online campaign for residents to share their sporting successes and stories under the hashtag “Saudi sporting society.” In all of these politically conservative societies, sports are also viewed as relatively safe outlets for public entertainment and as a focus for social mobilization.
The Gulf countries also strive to use sports to spread awareness about and increase buy-in for healthy lifestyles, especially among youth, who are active on social media and follow social media trends. For example, in April the UAE launched the program “Ma’kom in Ramadan” (With You in Ramadan) to promote healthy habits during the holy month. As part of the program, social media influencers prepared healthy recipes, and personal trainers offered online training sessions. In Qatar, the Qatar Foundation offered online yoga classes and FIFA e-tournaments during Ramadan. Also, Saudi Arabia issued the Saudi Sports for All Federation’s Ramadan fitness challenge, which encouraged people to be active and make Saudi Arabia a healthier and happier place. In addition, Saudi Arabia’s recent reforms have led to a greater interest in wellness activities, including yoga. Al Ula, for example, aims to become a yoga center. Alongside incentives to promote healthy living, Gulf states are also prohibiting the use of harmful products. For example, Qatar has banned smoking waterpipes at restaurants and cafes in the wake of the coronavirus pandemic and has launched social media campaigns to raise awareness about the dangers of tobacco use.
In addition to promoting healthy lifestyles throughout the region, prestige sports investments, such as the purchase of football clubs, contribute to building a national identity. For young Emiratis and Qataris, watching famous international clubs bearing their names spurs national pride, as well as a sense of social solidarity. When Qatar sponsored Barcelona, Qatari youth commonly wore the team’s jersey. Further, for countries such as Qatar and the UAE, with small local populations seeking to forge that sense of solidarity in the midst of outsized expatriate worker populations, national sports days provide a place for citizens to come together as well as a chance for rulers to solidify a national identity. During the national sports days these countries have begun celebrating, royals engage with citizens by marching in parades where youth wear national flags and military uniforms showing national pride.
A Financial Inequalities in the Football Sector
This Gulf-centric effort deployed for the purposes of prestige, public health, and patriotism also has an international echo, much of it focused on the powerful, lucrative draw of European football. As noted, part of this effort is aimed at strengthening national cohesion in these Gulf countries. But as these sports-focused efforts have radiated out from the region, their impact – largely because of the huge sums of money involved – has been distorting and sometimes poorly received. Part of this effect is a product of existing financial inequalities (and accusations of unfair competition) that plague professional football and which outside infusions of significant capital can exacerbate. The intense media coverage in football-crazed Europe has focused sometimes on the foreign (Gulf) aspect of these investments, heightening criticism. And as oil-rich businesspeople and state agencies from Gulf countries (like oligarchs from Russia) buy football teams, they can cause inflation in the football sector similar to a bubble in financial markets. For example, Paris Saint-Germain paid a world record 222 million euros (around $257 million) to Barcelona for the signing of Brazilian forward Neymar in 2017. Further, in the last five years, Manchester City has bought the five most expensive players in club history and paid a total of £307.6 million (over $420 million) in transfer fees. In this case, smaller football clubs may have trouble keeping up with these giants, which has provoked resentment and backlash, typical in such hothouse enterprises even on good days but fueled in these cases by irritation over perceived foreign interference.
As a way to prevent European clubs from spending too much – a lot of it sourced to the Gulf – to gain an advantage and qualify for competitions, the Union of European Football Associations’ financial fair play regulations were introduced in 2010 as a way to improve transparency and ensure fairness in European club soccer. Several clubs were found to have broken regulations during the first assessment period based on the 2011-12 and 2012-13 seasons and were fined. For instance, Paris Saint-Germain was subjected to sanctions following its controversial £167 million (over $227 million) sponsorship deal with the Qatar Tourism Authority. A similar accusation – and eventual finding – against Manchester City was subsequently overturned in July 2020. Following the Saudi takeover of Newcastle United, the fair play discussion flared up again. Newcastle might also face investigations as the Premier League clubs voted to block lucrative Newcastle sponsorship deals. Italian businessman Andrea Radrizzani, the owner of Leeds United Football Club, stated in an interview that the purchase of Newcastle United must be in compliance with financial fair play rules, which stipulate that all Premier League clubs be treated equally. It isn’t hard to see why weaker teams, suffering consistent losses on the pitch, would feel a double sense of frustration believing money was an extra player on the field. This sense has fueled poorer teams’ frustrations and their determination to take a harder line with Newcastle owners. As a result, new regulations may be implemented in the European league to prevent these types of lucrative sponsorship deals. Defenders of the proposed rules insist they are necessary to protect the credibility of the clubs, Union of European Football Associations, and Premier League.
Gulf Political Agendas
These acquisitions made by oil rich monarchies may threaten to bring these countries’ political agendas onto the football pitch. The Daily Mail reported that Saudi Crown Prince Mohammed bin Salman had called British Prime Minister Boris Johnson regarding the Premier League’s initial decision to attempt to block the Saudi takeover attempt of Newcastle United in April.
These concerns came back to the fore with the Saudis’ eventually successful bid to acquire Newcastle United in October. To address the Premier League’s concerns over any potential political intervention by the Saudi state, the kingdom has reportedly provided legally binding assurances that Newcastle United will not be controlled by Saudi leaders. Showing that these states are committed to remaining detached from the clubs’ management may ultimately be beneficial for the states’ branding while also preventing financial problems for clubs. It is in Gulf states’ best interests to act according to the assurances they give, so it is unlikely they will give guarantees they cannot keep when the entire world is watching.