If any doubts remained about the link between geopolitics and international sport, then the recent reaction of global sporting bodies to the Russia-Ukraine conflict has surely dispelled them.
Following the western world’s widespread condemnation of Putin’s aggression, Russian athletes, teams and their owners have been roundly barred from participating in international competitions. From the Winter Paralympics to Formula 1, the list of sports in which Russian and Belarusian sportsmen and women are no longer welcome – whether competing under their flag or not – is growing by the day, and it is now extremely unlikely that a Russian soccer team will make the trip to Qatar later this year.
One might argue that sport should be about the pursuit of excellence, testing the limits of human ability, and providing entertainment – and should remain unsullied and uninfluenced by international politics or nationalistic agendas. Clearly that picture bears no resemblance to the phenomenon of contemporary global sport, where many nations commit significant resources to promoting sporting success as part of a broader geopolitical narrative. For decades now sport has been seen as a key instrument of soft power – and nowhere more so in recent years than in the Middle East.
2008-09: Where it all began
Abu Dhabi’s purchase of Manchester City football club in 2008 fired the starting gun on what has become a proxy battle between three major Gulf states (UAE, Qatar and Saudi Arabia) played out on the world’s golf courses, grand prix circuits and pitches of European football clubs. The enormous investment offered by Sheikh Mansoor into new players and infrastructure, combined with sponsorship deals from Etihad and a number of entities related to Mubadala (CEO Khaldoon Al Mubarak also chairs the club), has transformed the club into one of the world’s football superbrands.
The UAE’s investment in sport has not been limited to football; it is no coincidence that in 2009 we saw the first ‘Race to Dubai’ golf event, offering the largest prize money seen on the PGA tour to date. In November of the same year, Abu Dhabi’s Yas Marina circuit hosted its first Formula 1 grand prix race. Also in 2009, more opportunistically perhaps, the UAE became home to Pakistan cricket following the Lahore bombings, and this no doubt contributed to the Dubai-based ICC’s decision in 2021 to re-locate the T20 World Cup from India to the UAE and Oman due to Covid concerns.
Three years after the Manchester City deal, Qatar Sports Investments acquired the legendary French club Paris St Germain in a deal reportedly facilitated and encouraged by then presidential hopeful Emmanuel Macron. Following the same formula of buying in footballing stardust (cue Lionel Messi), large local sponsors on the shirt (Qatar Airways, Ooredoo and QNB amongst them), and plans to build a new larger stadium, club president Nasser Al Khelaifi is clear in his ambition to turn Paris St Germain into a European superpower. So far, so familiar. But where Qatar has gone much further is its investment in an entire ecosystem of football: in broadcasting (beIN Sports), in supporting other European clubs (Bayern Munich, Roma, Real Madrid), in grassroots football programmes, and of course in campaigning to host the biggest football tournament of all, the World Cup. Where Abu Dhabi once led the way, Qatar has since far surpassed its near neighbour by winning what is – at least in terms of global sporting events – one of the top prizes.
Soft power play
For all of the hundreds of millions of dollars that the Gulf states have poured into sports, one might reasonably ask what the return on investment has been. Judging by the latest sets of accounts for Paris St Germain and Manchester City, it has not been profit – although the latter club has bounced back to profitability following the Covid crisis. Clearly there have been other commercial benefits: more Gulf-bound tourism and visitors, many of them flown by the same government-owned flag carriers that adorn the players’ shirts, and no doubt each emirate’s investment in sporting infrastructure helps to make their respective economies more attractive foreign investment destinations.
Few would disagree, however, that these enormous investments project soft power to the wider world. For small states in a volatile region of nearby frenemies, the value of having the country’s name appear on stadia, merchandise and television screens around the world is incalculable and adds prestige to diplomatic and wider cultural relations. This is particularly the case for Qatar, a country that has often in recent years forged its own foreign policy rather than toe the GCC line – resulting ultimately in the trade and travel blockade of Qatar by the remaining Gulf states for nearly two years up to early 2021. Joseph Nye, the American political scientist who popularised the term, observed that soft power is most often deployed in the absence of hard power, and particularly to compensate for vulnerability. Qatar is a case in point.
Have we reached the peak?
There has of course been negative reaction to these developments. While some bemoan how football has sold out to those with the deepest pockets, others have cried foul over the FIFA bidding process which led to the award of the World Cup to Qatar. Broader criticism has centred around the idea of ‘sportwashing’, how states with dubious records on human rights look to normalise their reputation via investment in sport. Indeed, Saudi Arabia’s ultimately successful campaign to acquire Newcastle United has come under fire due to the Jamal Khashoggi murder and was delayed until its broadcasting dispute with Qatar had been resolved.
With the Saudi acquisition of the Magpies (as Newcastle FC are known), it is difficult to see the interest of the Gulf states in football, and sport more generally, diminish in the near term. There are however indications that similar investments in the future may not come with the same degree of influence and soft power that has been seen in the past. Not only are the public, politicians and mainstream media becoming more attuned to ideas such as sportwashing, but there are signs that the grassroots of some sports are resisting the changes that large investors are lobbying for. We will write later in the series about another Saudi PIF-backed plan to create a new golf format and competition that has prompted a backlash by a large proportion of the golfing community.
More broadly, the ongoing war in Ukraine has shown that governments and sporting authorities are prepared to apply sanctions for egregious behaviour – even when it hits national assets such as the UK’s Premier League, as Roman Abramovich and Chelsea are now experiencing. The natural corollary to this suggests the same authorities will be more willing to push back against other investors and sponsors that contravene their values in other ways. Gulf states should take heed.
Diligencia provides corporate intelligence and due diligence solutions for emerging markets across Africa and the wider Middle East. Our vision is to deliver clarity, inform opinions and enable decision-making for clients in jurisdictions often poorly served by accurate public domain information.