Qatar’s sovereign wealth fund is buying a roughly 5 percent stake in the parent company of the NBA’s Washington Wizards, NHL’s Washington Capitals and WNBA’s Washington Mystics as part of a $4bn deal, news reports say.
Bloomberg News and The Associated Press quoted sources speaking on condition of anonymity because the agreement between the Qatar Investment Authority and Monumental Sports & Entertainment had not been officially announced.
It is believed to be the first time the government of Qatar is investing in US professional sports. Sportico first reported the transaction, saying it is the first time any sovereign wealth fund has bought into ownership of an American team.
It is not Qatar’s first big foray into major sport. The Middle Eastern country last year hosted football’s World Cup for the first time, helping FIFA reach a record revenue level because of booming ticket and hospitality sales.
Qatar Sports Investments, a subsidiary of the state-run fund, has owned majority control of French football club Paris Saint-Germain since 2011. The same group agreed in October to buy a 22 percent stake in Portuguese club Braga.
Getting into a top US market, even as a minority partner, is further expansion of Qatari reach into the sports world.
NBA spokesperson Mike Bass said the league’s Board of Governors decided in November to allow “passive, non-controlling, minority investments in NBA teams by institutional investors, including university endowments, foreign and domestic pension funds and sovereign wealth funds, subject to a set of policy guidelines adopted at that time”. All investments fitting that bill require league review and NBA Board approval.
“The NBA Board is currently reviewing a potential investment by QIA [Qatar Investment Authority] in Monumental Sports & Entertainment, the parent company of the Washington Wizards, among other sports properties,” Bass said. “In accordance with the policy, if approved, QIA would have a passive, minority investment in the team, with no involvement in its operations or decision-making.”
NHL Deputy Commissioner Bill Daly said the league had already approved the investment.
An expert in such transactions said sports are part of Qatar’s nation-branding and public diplomacy strategy and the move aligns with that strategy.
“Part of that strategy includes purchasing, sponsoring or buying equity in international sports organizations in Western markets, especially in central cities,” said Yoav Dubinsky, instructor of sports business in the Lundquist College of Business at the University of Oregon.
“From a political standpoint, it means further legitimising Qatar as a business partner in the West, including in the heart of American politics.”
Dubinsky added the size of the stake would likely limit the impact Qatar can have on the teams, unlike the control of Paris Saint-Germain. That would fit with the NBA’s definition of a passive, minority investment.
Neighbouring Saudi Arabia has also moved into US sports. Its sovereign wealth fund, which funded the upstart LIV Golf series, has agreed to a business partnership with the PGA Tour.
Ted Leonsis, who has owned the Capitals since 1999 and been majority owner of the Wizards since 2010, is the founder, managing partner and CEO of Monumental. The company lists 20 other partners on its website, including Laurene Powell Jobs and Washington Nationals owner Mark Lerner.
Monumental also owns the Capital City Go-Go of the G League and Capital One Arena in Washington and recently took over the media outlet formerly known as NBC Sports Washington, now Monumental Sports Network.
Source: Al Jazeera
BDST: 1020 HRS, JUNE 25, 2023
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