Why is Qatar investing so much in Football?

The mega rich nation is quickly becoming the "engine of sports business". Mainly because of a fear of becoming a second Kuwait

 

 

Despite only having a slightly larger population than Birmingham (1,409,423) and being about one fifth the size of London, Qatar is becoming the most influential country in the world football business.

The biggest spender in the Spanish transfer market this summer is Malaga, owned by Qatari Sheikh Abdullah Al Thani. The club has spent €58m on players (more than Real Madrid). Still in Spain: The Qatar Foundation became the first paying shirt sponsor of Barcelona with a world breaking €165m deal – which, according to a Barcelona executive, enabled the Catalans to keep hold of top-earning players like Lionel Messi.

Over to France, where the Qatari-owned Paris Saint Germain has spent a whopping €86m on new players, while Qatari media giant Al Jazeera have made a shock move into European TV rights buying exclusive live French football rights for €90 million a year.

This all comes after Al Jazeera Sports agreed a six-year deal for the overseas right to French football.  The Qatar Investmen Authority (QIA) has also placed a bid for Swiss media agency Infront Sports & Media – a giant in the European sports rights market.

Oh, and there is the small matter of the World Cup that Qatar will host in 2022.

embedded by Embedded Video

YouTube Direkt

“Doha is the engine of sports business” 

Qatar, which is slightly smaller in size than the state of Connecticut (which is the 48th largest US state), has also invested a lot of money in building academies like Aspire, which help develop the future Qatari national team, and offer top European clubs a warm place to train in during the winter break.

Former Juventus striker and World Cup winner Alessandro Altobelli and his partner Alessandro Moggi (son of disgraced Luciano Moggi) opened a sports investment company, focusing most of their efforts on Qatar. “Doha is the engine of sports business” said Altobelli to Qatari newspaper Al-Sharq. He explained that their main target is to get more top European teams to train in Qatar during the winter, like Bayern did last January.

So why is Qatar investing so much in European soccer? As you may have guessed, it’s not just because the Sheikhs are fans of the beautiful game. There are several national interests in these investments.

There is a lot of talk in the Persian Gulf about obesity amongst young Qataris. Which is a major concern for Qatari Royalty. However, the investment in sports – fueled by a local ruling that makes all companies invest 2.5% of their profits in local sports (that’s between €500m to €750m per year) – is not just about health. It’s also about gaining influence.

Hamad bin Khalifa Al Thani, the ruling Emir of the State since 1995, knows that Qatar is vulnerable. As a graduate of Sandhurst Military Academy he knows that he cannot protect Qatar with military force, so he decided that the nation will invest in things that will make it seem more important on the global stage. A message to predators (like Iran) in an attempt to avoid what happened to Kuwait.

Blake Hounshell, Doha-based managing editor of Foreign Policy magazine explained: “The Emir is a military man and knows that Qatar is basically indefensible. So, he has thought laterally about ways of making Qatar more secure.”

The investments in sports is just a part of the strategy. Making Qatar more secure through turning the huge money coming from “the new oil” (liquefied natural gas) into welfare for the citizens of the country and global influence.

embedded by Embedded Video

YouTube Direkt

“Is it good for football?”

The main question for football is the safety of the Qatari investment. Will they suddenly desert clubs like other benefactors have done in the past? In my opinion, Qataris are here to stay. Because unlike most individual Russian/Thai/Uzbek/Chinese/Visigoth investors, who could succumb to political and financial pressures, the Arab investment is fueled by a national interest.

Even if the Qataris decide to of-load a club, they would still worry about the image of their country. They won’t just bail out and leave a club in ruins like at Portsmouth. Besides, the Qataris have also suggested that they are going to invest in infrastructure – stadiums and academies – in Malaga and in Paris as well.

Are they good for European football? On one hand they inflate market prices – though one hopes that Financial Fair Play will reduce inflation. On the other hand, they turn modest or underachieving clubs into real powerhouses, and that’s good for competition.

Either way, like them or not, the Qataris are part of the future of Europe’s football. Their next step will be interesting: Premier League media rights? Player agencies? Manchester United?

All is possible.

One Comment

  1. Macca added these pithy words on February 23, 2012 | Permalink

    The world’s most historic club, Aston Villa F.C., is the ultimate prize…

3 Trackbacks

  1. [...] מדי בוקר קצת אחרי אחרי שאני מצחצח שיניים אני מקבל הודעת סקייפ מאוריאל דסקל עם איזו חדשה יומית. לאיש יש מוסר עבודה נדיר – ובזמן שאחרים מנמנמים הוא כבר עובד. והיום למשל בישר לי "שהסעודים קנו גם פנתינייקוס ואת קוסמוס ניו יורק". דסקל עוקב מקרוב אחרי סיפור ההשקעות הערביות בכדורגל האירופי. כדאי לקרוא. [...]

  2. [...] The Qatari investments are a part of the small nation’s strategy to protect itself and become a global force as can be read HERE. [...]

  3. [...] 3. Al Jazeera, which is part of QSI (owners of PSG), are responsible for almost a 100% hike in Champions League media rights in France. While Gazprom, owners of FC Zenit Saint Petersburg, have signed a major sponsorship contract with UEFA. Both PSG and Zenit are in no way ready for FFP regulations – will he now kick them out of the competition they are pouring money into? [...]

 Subscribe in a reader