Sports: From “hobby” to key Gulf diversification strategy
The sports industry has developed from a “hobby” to a mainstay in the economies of the region and an important element in the growth of their gross domestic product (GDP).
Most Gulf countries are showing great interest in the field of sports investment as part of their plans to diversify into non-oil sources of income, which has strengthened their role globally.
PWC expects the sports sector in the Middle East to grow by 8.7 percent over the next 3-5 years.
The Atlantic Council, a thinktank, considered in a report that at a time when Gulf countries are seeking to find new avenues for foreign investment, European football has emerged as a strategy to accomplish this task.
It said investments are aimed at strengthening ties with trading networks in the West, as Gulf states prepare for a post-oil world.
According to the report, “The European football market looks like a good investment: 32 major European clubs have increased in value by 9 percent in 2019, and operating revenues in the European football market have grown by 65 percent in just eight years. It appears that Gulf states are ahead of the curve, having invested heavily in European football for the past 13 years while the market continues to grow very rapidly.”
Huge sports investments
Gulf countries, thanks to their huge investments in the sports sector, have achieved great economic successes and significant financial returns
This is especially true with the increasing number of travelers who fly to participate in matches as players or spectators, and this establishes strong partnerships and relations with the world’s major clubs.
The bulk of investments in the sports industry in Saudi, the UAE, and Qatar comes in the field of international soccer, where millions of dollars have been allocated to owning and sponsoring major European football clubs.
The most prominent deals concluded are with clubs such as Paris Saint-Germain, Arsenal, Manchester City, Portsmouth, Malaga and Barcelona, Munich, Palermo, and AC Milan, among others.
In Vision 2030, Saudi relies on diversifying non-oil sources of income, and during the next eight years, the kingdom aims to host major global events, in particular the Asian Games, the FIFA World Cup, the Olympics, and other global championships in sports including boxing, tennis, and motorsports.
In addition, the Kingdom has allowed local and foreign private sector investors to invest in the sports sector, and receive licenses to establish private sports clubs and institutions in the Kingdom, for the first time.
Recently, two investment companies affiliated with the Saudi Public Investment Fund (PIF) signed strategic agreements with 4 Saudi soccer clubs, worth up to 8 billion riyals.
As for the UAE, after years of investing strategically in the sports sector, Dubai and Abu Dhabi have become a global hub for sports projects and facilities, hosting international sporting events.
In addition to the UAE’s acquisition of European football clubs and sponsorship deals for some of them, the state is interested in developing its investments in various fields of sports. It recently held the 26th Dubai World Cup, which has become a unique event awaited by all equestrian enthusiasts around the world, and witnesses strong competition between elite horse owners, trainers, and jockeys around the world.
In addition, jiu-jitsu is taking an important part of UAE’s interest in the sport. Palms Sports Company announced that it has signed a contract worth 78 million dirhams with the Abu Dhabi government to train jiu-jitsu and martial arts for employees of government agencies.
The UAE is also interested in golf, as Abu Dhabi hosted the “Abu Dhabi HSBC Golf Championship” as part of the four Rolex rounds of the World Program for the DB World Tour 2022.
As for the game of “tennis”, it would take a large part of the UAE’s interest, with the 30th Dubai Duty-Free Tennis Championships being held last February, with the participation of the best WTA and ATP players in the world.
It should be noted that Dubai hosts the 2022 edition of the International Conference on Sports Facilities, one of the major conferences that are held annually on different continents.
Qatar’s economy is expected to grow this year between 1.6 percent and 2.9 percent, as a result of its hosting of the World Cup.
The Ministry of Finance had previously estimated that the Qatari government would spend $200 billion until 2022 on building infrastructure and constructing and developing stadiums.
According to the forecasts of the Qatar Planning and Statistics Authority, there is a possibility of growth in non-oil activities, especially those related to the tourism sector, at rates ranging between 2.8 and 4.7 percent during the current year.
Officials in Qatar aspire to make “Doha the capital of world sports”, according to the “Qatar National Vision 2030”, and in this way, it is possible to understand the size of Qatari investments in the sector.
On the other hand, in parallel with its ownership of the “BeIn Sports” network and its expansion in various continents, Qatar is focusing on direct investment in the sports industry, through the purchase and sponsorship of international clubs in addition to distinguished brands and various TV broadcasting rights.
Qatar is also investing in “tennis and squash” to become one of the new destinations for these tournaments. Last February, the 30th edition of the (Qatar ExxonMobil) Open Tennis Championship for men, with a class of 250 points, was held, with the participation of 32 players of the game’s stars and top-ranked players. globally.
In conclusion, 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. This is what Gulf countries focus on building.