Many European soccer teams are owned by Gulf states. But why?

Many European soccer teams are owned by Gulf states. But why?

By
Hezha Barzani

Newcastle United—arguably one of the worst teams currently in the English Premier League (EPL)—recently became the richest soccer club in the world. How did one of the EPL’s lowest-ranked teams, a club that was last crowned champions of England’s top tier soccer league in 1927, go from rags to riches?

On October 7, 2021, a Saudi Arabia-led consortium—headed by the Saudi sovereign wealth fund: the Public Investment Fund (PIF)—purchased Newcastle United for over £300 million (over $405 million). The move came after an eighteen-month deadlock, with the deal finally signed after the EPL received legally-binding assurances that the Kingdom of Saudi Arabia won’t control Newcastle United.

Newcastle United isn’t the first Arab takeover of a European soccer club in recent years. Some of the teams bought by Arab royalty and businessmen include: Manchester City, owned by the United Arab Emirates’ (UAE) Sheikh Mansour; Paris-Saint Germain (PSG), owned by Qatar’s Nasser Al-Khelaifi; Aston Villa, owned by Egypt’s Nassef Sawiris; and Sheffield United, owned by Saudi Arabia’s Abdullah bin Mosaad bin Abdulaziz al-Saud. Separate from purchasing teams, aviation companies have also heavily invested in European soccer. Emirates, Etihad Airways, and Qatar Airways all have major deals with European soccer clubs worth hundreds of millions of dollars.

So, why are Gulf nations investing so much money in European soccer?

economic benefits

As Gulf nations seek new foreign investment avenues, investing in European soccer has emerged as a strategy to accomplish this task. The investments aim to enhance ties to commercial networks in the West, as Gulf nations prepare for the post-oil world. The European soccer market also seems like a good investment: the value of the thirty-two most prominent European soccer clubs increased by 9 percent in 2019, and operating revenues in the European soccer market have grown by 65 percent in only eight years. Gulf nations seem to be ahead of the curve, as they have been heavily investing in European soccer over the past thirteen years while the market continues to grow rapidly.

Aviation and tourism are sectors that have also seen growth from soccer investments. Qatar Airways has many multi-year partnerships with numerous high-valued soccer clubs, most notably FC Barcelona, ​​the world’s most valuable club. Airliner Emirates’ partnership with Arsenal demonstrates the benefits of aviation-soccer club partnerships, with the company seeing the value of their deal nearly triple in ten years.

Emirates’ jersey partnership with Arsenal and Etihad Airways’ jersey partnership with Manchester City demonstrate how these investments “make sense for brands that want to grow globally, as brand recognition is strong in this segment,” notes Atlantic Council empowerME Initiative Director Amjad Ahmad. Beyond stadiums named after these flag carriers, these globally worn jerseys carry the brand. Club fans tend to be very passionate, therefore, affinity with brands that support their team is strong. Ahmad further explains how, “given the close ties of these airlines to their respective home country, it also builds affinity for the home country or at least awareness.” It’s these government brands so closely tied to respective countries that effectively “builds the country’s brand,” added Ahmad.

Tourism-wise, a 2020 report by The Economist sports highlights, including soccer, as a key lever in tourism development over the next decade for Gulf nations. With Gulf-owned teams Manchester City, PSG, and Newcastle United regularly coming to the Gulf for practices and tournaments, Gulf nations have the opportunity to advertise their facilities and tourist attractions to an international audience. In one example, Qatar partners with their very own PSG for an annual Qatar Winter Tour in Doha. Qatar strategically utilizes this Winter Tour for commercial purposes, as they “offer millions of soccer fans the opportunity to experience all that Qatar has to offer, including its culture and hospitality.” Qatar is also hosting the 2022 World Cup, which is expected to have 1.2 million tourists in attendance. Additionally, the UAE—most likely to soon be joined by Saudi Arabia—is also regularly hosting practices, matches, and tournaments. All these activities can benefit the tourism sector of Gulf economies if leveraged effectively.

Social benefits and sportswashing

Aside from economic benefits, soccer can be a vehicle to enact social change, like Egyptian soccer player Mo Salah’s popularity reducing Islamophobia and hate crimes in Liverpool since he joined the club in 2017.

Purchasing European soccer clubs is also a tool for Gulf nations to exert soft power and boost their reputations in the western world, which is viewed by many as “sportswashing,” or “when an individual, group, corporation, or nation-state uses sport to improve its reputation and public image.”

When Saudi Arabia purchased Newcastle in October 2021, for example, there was criticism, and rightfully so, from renowned Liverpool FC coach, Jurgen Klopp, and Amnesty International UK head, Sacha Deshmukh, who both pointed to Saudi Arabia’s egregious human rights record as a better reason to block the takeover. Although there is opposition to Newcastle’s newest owners, the possible benefits of the purchase are already clear, as thousands of Newcastle fans celebrated the takeover, waving Saudi flags and even wearing thawbs and ghutras. Similarly, Newcastle fans took to Twitter to relay their excitement about their new Saudi patrons.

The excitement of Newcastle fans stems from the positive track record of previous Gulf nations taking over soccer clubs; UAE-owned Manchester City and Qatar-owned PSG have won a combined twelve league titles under their Arab ownership in the last decade.

After the ceremony of the twelfth annual Dubai Globe Soccer Awards—which was held in coordination with the Dubai Sports Council and took place on December 27, 2021—prominent soccer stars like Robert Lewandowski, Kylian Mbappé, and Cristiano Ronaldo all posted pictures of the Burj Khalifa on Instagram and expressed their gratitude towards Dubai (Ronaldo, who has the most-followed Instagram account globally, with 419 million followers, gave a lengthy thanks to Dubai in one post and even took a picture with the Crown Prince of Dubai).

Whether the UAE-involved Globe Soccer awards mandated these social media posts or not, the social benefits are immense, as top soccer stars relayed their praise and thanks to the UAE on their personal social media accounts to hundreds of millions of followers.

Future of Gulf involvement in European soccer

Although Saudi Arabia’s PIF has just purchased Newcastle United, it seems that Saudis have explicit intentions of digging deeper roots in the European soccer market, as a Saudi Arabian consortium has reportedly made a $3.5 billion bid to buy Chelsea—a London-based team known as one of the most prestigious clubs in Europe. Chelsea’s Russian owner, Roman Abramovich, ultimately decided to sell the club he owned for nearly two decades, since Russia’s invasion of Ukraine resulted in the UK government placing heavy restrictions on Chelsea. The significance of Abramovich—a Russian oligarch with close ties to Vladimir Putin—having to sell Chelsea demonstrates the direct impact that irrational political and military actions made by an owner’s native nation can play in thwarting investments abroad.

After watching the success of its neighbors, Qatar and the UAE, Saudi Arabia likely wanted to mirror the empires that the two have created in the European soccer world. This strategy has the potential to backfire on Saudi Arabia if they cannot reach the same successes that Manchester City and PSG have amassed, as both teams have become top-tier clubs in the world after being taken over by their respective Arab nations. With that being said, it’s clear that Newcastle United will be fleshing out the cash, spending a total of $113 million in the January transfer window alone on new players.

Saudi Arabia, seeking to improve its international reputation after the murder of Saudi dissident journalist Jamal Khashoggi in 2018, among many other human rights violations, will use the purchase of Newcastle United to rebrand itself in the Western world, while also competing economically with UAE and Qatar.

Looking to the future, as the Gulf nations’ political and economic rivalries continue to flare up, will we see this tension spill over onto the European soccer stage? With a lucrative and rapidly growing European soccer market, it’s safe to say that Gulf nations will continue to invest in the beautiful game and reap benefits economically and socially.

Hezha Barzani is a project assistant for the empower ME initiative within the Rafik Hariri and Middle East Programs.

further reading

Image: Soccer Football – Premier League – Newcastle United v Chelsea – St James’ Park, Newcastle, Britain – October 30, 2021 Newcastle United fan with a Saudi Arabia flag wears Arab style clothing outside the stadium before the match Action Images via Reuters/Lee Smith EDITORIAL USE ONLY. Do not use with unauthorized audio, video, data, fixture lists, club/league logos or ‘live’ services. Online in-match use limited to 75 images, no video emulation. Do not use in betting, games or single club /league/player publications. Please contact your account representative for further details.

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