The Gulf’s rapid ascent in the global sports arena is undeniable. Whether it’s high-profile investments in foreign clubs, attracting top talent to play in the region’s domestic leagues, or hosting huge global sporting events, the Gulf has made it to the forefront of sports in a remarkably short time.
But why do it? What’s the ROI? Listen to anyone who has owned a football club at some point, and they will tell you that, with a few notable exceptions, it can be a quick way to lose a lot of money. So where’s the upside?
This article examines the role of GCC Sovereign Wealth Funds (SWFs) as primary vehicles for sports-related investments. It analyses the motivations behind these investments, the potential returns for investors, and the projected future impact across diverse sporting sectors.
The funds behind the headline-grabbing investments
SWFs are owned by the state and receive their money from state-affiliated sources. The largest global SWF is in fact Chinese, but the GCC dominates the top ten list. Back in 2019, the Foundation for Strategic Research calculated that of the USD 5.5 trillion held by SWFs worldwide, almost 40% came from GCC countries. The latest data shows that six SWFs from the Middle East (along with Singapore) accounted for 81% of direct investments by SWFs between January 2023 and June 2024.
Why invest in sports?
Let’s look at the key reasons SWFs make these sports-related investments. In all cases, you can tie the motivation to the visions and initiatives set out by the various Gulf states – such as Saudi Arabia’s Vision 2030, We the UAE 2031, and Qatar National Vision 2030.
- Diversification: There is a huge shift in the GCC, as laid out in the various future-focused visions and initiatives of each country, towards economic diversification and away from reliance on hydrocarbons to fuel their economies. Purchasing stakes in foreign teams, event hosting and encouraging local sports tourism, as well as infrastructure development, all drive business activity and create employment opportunities.
- Public relations: Major events like the FIFA World Cup 2022 in Qatar and the Saudi-backed LIV Golf series have drawn criticism, but they have also succeeded in reshaping foreign perceptions of these nations. By associating themselves with world-class sports, Gulf countries cultivate soft power – something used by Western countries for decades. Bringing sports closer to home yields substantial public image benefits.
- Profit: Beyond reputation management, there are tangible economic benefits. If you pick the right football team (we’ll look at the example of Manchester City in a moment), or the acquisition of top footballers like Christiano Ronaldo and Neymar to the Saudi Pro League, there are ways to generate revenue. This may include broadcasting rights, sponsorships, and merchandising. It doesn’t stop at football – the UAE and Bahrain are very involved in F1, hosting races and pre-season testing sessions. By controlling key assets in global sports, Gulf nations ensure continued financial returns through ticket sales, tourism, and infrastructure projects.
- Infrastructure and tourism: With world-class venues such as Lusail Stadium in Qatar, Dubai’s Coca-Cola Arena, and Saudi Arabia’s planned sports megacity Qiddiya, the Gulf is positioning itself as a premier sports hub. Hosting events like the UFC, WWE, and ATP Tennis tournaments solidifies the region’s status as a destination for international sports tourism, further boosting associated industries such as hospitality, retail and entertainment.
The unique pull of English football
By far the most successful example of a team acquisition came in 2008 when Sheikh Mansour bin Zayed Al Nahyan’s Abu Dhabi United Group acquired Manchester City – a football club with a mixed history. It was once the underdog compared to legendary neighbours Manchester United, but the story has changed dramatically in the years since the acquisition. Manchester City has won the Premier League seven times since the takeover, turning the club into a global brand in the process.
But why choose football when it’s a notoriously risky venture? In the case of Manchester City, the success has been so stellar that the organisation recorded a pre-tax profit of USD 95 million for the 2023–24 year.
But there’s something else going on. While big tech CEOs have become celebrities, most older companies have leaders who remain largely unknown to the general public. This is not the case in football, where the owners and their countries of origin are not only well known, but often celebrated. When you own a football team, you become a celebrity, a household name, and fans chant your name. You are in the media regularly.
Other investors saw this success and wanted in. Three years after the Manchester City takeover, the Emir of Qatar Tamim bin Hamad Al Thani bought Paris Saint-Germain football club through Qatar Sports Investments (QSI). In 2013, fifty percent of Sheffield United went to Prince Abdullah of Saudi Arabia, and in 2021 Saudi Arabia bought an 80% stake in Newcastle United.
Combat sports
The Chairman of Saudi Arabia’s General Entertainment Authority, Turki Alalshikh, has made major waves in global sports, particularly around boxing and other combat sports. Deeply involved in the creation of the Kingdom Arena – which was finished in 2023 – the Saudi venue has since hosted a number of high-profile boxing events. Widely regarded as one of the most powerful people in boxing – if not the most powerful – last year Alalshikh also acquired the well-regarded boxing publication Ring Magazine. This month he announced a partnership with UFC President Dana White to establish a new boxing promotion under the TKO banner. The stated goal is to do for boxing’s falling popularity and lack or central organisation what Dana White did for the then-ailing MMA world prior to UFC re-packaging it into a global phenomenon.
European sports vs US sports
But why the focus on European sports? This has traditionally been the key region of interest, with less attention paid to the US. This situation may now be changing, albeit slowly. In 2024, it was reported that the Qatar Investment Authority (QIA) was investing in the Washington Wizards basketball team and Washington Capitals ice hockey team, becoming the first SWF to invest in one of the four major North American sports (NFL, NBA, MLB, NHL). While the NFL might have remained elusive so far, there have been recent changes in the regulations there, too. Although the NFL’s policy changes lack explicit authorisation for SWF investment, the language is interpreted as potentially paving the way for GCC involvement in American football.
Long-term play
Every aspect of sports is up for grabs – bringing in famous players to the GCC’s domestic leagues, purchasing foreign teams, and hosting global events. Even broadcasting is on the table, with a recent report suggesting Saudi’s SWF is interested in buying a stake in the sports broadcaster DAZN.
As we have seen, Gulf nations’ sports investments are not just about immediate returns but also about shaping their future – new futures with diversified economies no longer reliant on oil and gas. As the countries in this region look at all kinds of sports – from football to basketball to tennis and even to chess – they are considering not just profit but reputation and the chance to build something that has a lasting impact in their country.
