The emirate has established itself as a global hub for sports and hosted several high-profile sports events, including the Dubai World Cup, Abu Dhabi Grand Prix, Dubai Rugby Sevens, and global Cricket leagues and events. It was the first to embark on a plan to wean itself off oil revenue, focusing on transport, logistics and eventually tourism. The country’s early efforts were largely focused on tennis, Formula One and cycling. It is a proud host to several international cricket leagues and other games. These events have helped to boost the country’s tourism industry and raise its international profile, but they have also been an effective tool in the realm of public diplomacy called sports diplomacy, which has become an increasingly important aspect of the UAE’s foreign policy. Then came Qatar, which formed a World Cup bid committee in 2009 and landed the soccer tournament a year later. The tournament brought the world’s spotlight to the small peninsula nation of 2.7 million, about the same as Chicago. Qatar hosted the most expensive World Cup to date — at an estimated cost of $220 billion, which was won by Argentina. The Qatar World Cup managed to awaken its Saudi neighbours, who showed little interest in sports until 2016, when they launched Vision 2030, an ambitious plan to make their country less reliant on oil money while opening it up socially and culturally. In 1980, Saudi Arabia first made a splash with its involvement in Formula One. The Saudis have recently gone on a spending spree, investing in combat sports, golf, tennis, Formula One... and especially soccer. But biggest of all, with Australia backing out of FIFA’s bidding process, Saudi Arabia is now the lone nation seeking to host the 2034 World Cup, which would be the country’s biggest sports coup to date. The flood of sports money in the GCC is creating new business opportunities and helping stabilize leagues and teams, but it has sparked heated debate over the nations’ motivations including diversifying investments, promoting tourism, encour- aging public health and, yes, improving their reputations on the global stage. The headlines are landing weekly, trumpeting shocking team purchases, lavish sponsorship deals and lucrative contract offers, all with unprecedented strings of commas and zeros. The GCC countries are feverishly courting high-profile athletes. Tiger Woods was reportedly offered more than $700 million to join Saudi-owned LIV Golf, while soccer star Cristiano Ronaldo is reportedly earning $220 million per year to play in the Saudi Pro League. Basketball star LeBron James joked on social media in July that he would sprint to Saudi Arabia like Forrest Gump. In the wake of FIFA World Cup 2022 in Qatar, the Gulf countries are also increasingly angling to host some of the world’s biggest sporting events, including world cham- pionships, cycling events and Formula One races, as well as the Saudi World Cup bid and rumblings of a future Summer Olympics in Qatar. They already have scooped up some of the world’s best-known soccer franchises, including Paris Saint-Germain (Qatar), Manchester City (UAE) and Newcastle United (Saudi Arabia). And they’re eyeing entire leagues, too: Beyond golf, the Saudi PIF reportedly has attempted to purchase Formula One, WWE and Qatar-based broad- caster beIN Sports, and it has made overtures that could remake women’s golf and the men’s and women’s tennis tours. The Qatar Investment Authority put up an estimated $200 million to own a small percentage of Leonsis’s Monumental Sports, which controls the NBA’s Washington Wizards, the NHL’s Washington Capitals and the WNBA’s Washington Mystics. It’s the first sovereign fund to purchase a stake in a team in the top four U.S. sports leagues. (MLS club New York City FC is majority controlled by Sheikh Mansour bin Zayed al-Nahyan, a member of the royal family of Abu Dhabi.) Companies from the GCC are throwing money into American sports, too, with the Saudis’ Aramco (Formula One), Qatar Airways (NBA), Etihad Airways (MLS) and the Emirates Airline (U.S. Open) sponsoring major teams and events. More than $4.5 billion has been committed to sports properties by the region’s sovereign wealth funds in the past three years, according to an analysis by the Sovereign Wealth Fund Institute. Those well versed in the economics and geopolitics of sports say this is just the start. When the NBA and NHL allowed Qatari investment in the Wizards and Capitals in July, analysts and key stakeholders said the move signalled a new age of foreign investment, and they anticipate that oil money will continue to flow freely into American sports. The NFL is the only major US league that still prohibits sov- ereign fund investment, though a special committee has begun exploring potential changes to its strict ownership rules. On the global stage Now, sports has become an investable asset like real estate, like stocks and bonds and it is only going to grow as an asset class. The GCC nations are increasingly using sports, together with the digital media boom, as an instrument to achieve broader policy goals. This is also when more GCC nations began taking an interest.
As sports budgets were slashed around the world, particularly in Europe, traditional hosts were less able to stage costly events such as the Olympics. Russia, China and eventually countries in the GCC had money to spend and a marketplace in need. At a time when Europe is struggling economically and is questioning its relationship with sports, others are adopting a very different position. As Saudi Arabia, the UAE and Qatar have sought to diversify their economies, they have increasingly turned to sports as a new revenue stream. According to the Saudi Arab’s Public Investment Fund’s most recent public report, less than 2% of its investments have been directed toward sports and entertain- ment. But the Saudis sank $2 billion into launching LIV Golf and are prepared to plunge billions more into their new partnership with the PGA Tour. And the country is actively trying to transform the Saudi Pro League into a competitor with the Premier League. Saudi clubs, backed by the Kingdom and its sovereign wealth fund, spent $957 million in the 2023 summer transfer window, according to a Deloitte analysis, to lure some of the world’s best players to what historically has been a lower-tier league. In all, the Saudi Pro League added 94 overseas players, including stars Neymar, Karim Benzema and Aleksandar Mitrovic. Saudi leadership is making a big and bold entry, playing the role of disrupter more than institutionalist. Economic diversification and nurturing political influence are goals.
Power and influence Qatar is set to host the basketball World Cup in 2027 and the Asian Games in 2030, steppingstones to a likely bid for the 2036 Summer Games. UAE will host global events like NBA, UFC, World Festival Jiu-Jitsu Championship, Formula 1 Grand Prix, World Triathlon Championship Finals, and T10 Cricket League next year. Saudi Arabia will host soccer’s Asian Cup in 2027, the Asian Winter Games in 2029 — which will involve truckloads of artificial snow — and the 2034 Asian Games. FIFA cleared a pathway for Saudi Arabia to host the 2034 World Cup. In cities such as Dubai, Doha and Jeddah, government leaders have spent the past decade building out infrastructure, relaxing laws and swinging open their doors to welcome outsiders. In many ways, today’s shifting landscape is a result of those actions. Hosting major sporting events through a combination of top-level facilities, and substantial investment in global sports brands has created new opportunities for partnerships, investments, and sponsorships at every stage in the value chain, while also demonstrating GCC nations’ diversity, inclusivity, and economic potential to a broader international audience. The importance of sport is not limited to the economic aspect only, but rather it is a tool for promoting peace and development in ways that include contributing to achieving sustainable development goals and dialogue among civilizations. The social changes — sports, tourism entertainment — are going to alter the region forever. It’s enormous, and it’s going to keep getting bigger and more significant as time goes on. It’s transformational what is happening right now in the GCC. Unless something dramatically changes in the world anytime soon, then the writing is on the wall already that the GCC countries, in sporting terms at least, have the power and the influence in the global sports arena.
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INVEST GCC: DAVOS 2024
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