international analysis and commentary

Global sport and the Gulf’s sovereign wealth funds


Newcastle United’s takeover in October 2021 by a consortium that would give Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), an 80% stake in the club brought renewed attention to the role of Gulf money in European sports. The £305 million deal was a surprise for some, but the fact that a Saudi sovereign wealth fund was behind it is a not at all surprising: Gulf funds have been key players in Europe’s elite football scene for over a decade. And the final takeover announcement was actually the culmination of 18 months of legal wrangling between the bidding consortium, the Premier League, Newcastle fans, the UK government – and a Qatari sovereign wealth fund sports media company, beIN Media.

From the beginning, Western media and activist networks dismissed the PIF’s Newcastle bid as an example of “Saudi Arabia’s soft power play,” the country’s supposed “sportswashing” agenda, or in some cases, professional football’s unashamed “worship of money.” Advanced by observers anxious to critique Saudi Arabia’s problematic rights record, the “soft power” and “sportswashing” are evocative, but they fail to offer any insights into what is really going on with Gulf money in global sports today. Who exactly is profiting from these deals? How? And through what legal and financial frameworks?

These questions do in fact have answers, but they are far more than simplistic clichés. And given how diverse and diffuse the actors involved in deals like the Newcastle acquisition are, I will take the case of sovereign wealth funds, which have largely escaped the critical attention that is cast on individuals like Saudi Arabia’s Crown Prince Mohammed bin Salman.

Saudi Crown Prince Mohammed bin Salman with President of FIFA Gianni Infantino, (then) President of Panama Juan Carlos Varela and former President of France Nicolas Sarkozy at the opening of the 2018 FIFA World Cup in Russia.


Sovereign wealth funded

Sovereign wealth funds play a major role in political and economic life in most Arabian Peninsula countries, including Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain and, increasingly, Oman. Sovereign wealth funds are investment vehicles that typically pool the revenue from a country’s resource extraction – in the case of the Gulf countries, oil and gas revenues. They are tasked with growing their country’s economy and investing for future generations, assuming that the resources are eventually going to be depleted. If you read their vision statements, sovereign wealth funds will generally present their investment choices in technical, financial terms. But it is impossible to really know the logic of these choices because the funds are not subject to the transparency rules that are expected of other global investment operations. Politics is not far away, though, since most of the Gulf funds are headed by the country’s ruler or a notable royal family member. The PIF, for example, is headed by Mohammed bin Salman.

The coffers of Gulf sovereign wealth fund have swelled in the past several decades. Six are currently among the top 15 largest funds in the world, including the PIF in 8th place with $480 billion in assets. The world’s largest fund, the Government Pension Fund of Norway – often held up as the shining example of sovereign wealth fund success – does not invest domestically. The Gulf funds, by contrast, invest both domestically and internationally. In both sectors, their investments are tied to state-defined priorities. Ruling families define these priorities, so elites in the inner-most circles have immense discretion in how these funds are allocated. Domestically, they have focused on a range of projects to diversify their economies, such as the Gulf’s sovereign wealth fund cities that I described in a previous Aspenia online article. Internationally, their investments have stretched across many sectors, including real estate, technology, ports and transportation, agribusiness, manufacturing, entertainment and, indeed, sports.


Read also: The Emirati-Qatari vision of Europe: A land of strategic opportunities


Since Mohammed bin Salman took control of the PIF in 2015, he has been both open and loud about his intent to overhaul the fund and radically expand it to grow the country’s domestic economy and to build “partnerships that contribute to deepening the Kingdom’s impact and role in the regional and global scenes.” The PIF’s Newcastle acquisition, like other Gulf sovereign wealth fund sports investments, has been part of this broader effort to acquire lucrative stakes in global companies and brands, which truly picked up after the 2008 global financial crisis. The PIF was not very active at that time, but other Gulf funds were extremely quick to invest in Western companies suddenly teetering on the edge of bankruptcy. Mohammed bin Salman would not miss a beat when the next crisis arrived in with the COVID-19 financial turmoil – setting the PIF on a veritable spending spree totaling about $1.8 billion in the first three weeks of April 2020. The Newcastle offer, announced in April 2020, was part of this push.


Gulf sport sponsorship

In many ways, the PIF’s Newcastle bid was not at all surprising if put in the bigger context of Gulf sovereign wealth fund activity over the past decade. However, the deal was rather unusual in the funds’ sports investments because the PIF was so open about its role in the deal, and the fact that Mohammed bin Salman was the obvious person behind it. Previous Gulf sovereign wealth fund investments in European sports have been quieter, brokered by individuals close to but not at the top of their country’s leadership, and drawing on various subsidiaries like the sovereign wealth fund-backed Gulf airlines. Consider three earlier examples from the UAE, Qatar and Bahrain: Manchester City FC, Paris Saint-Germain FC, and the Bahrain-Merida professional cycling team.

Manchester City has been controlled by the Emirati royal family member Shekih Mansour bin Zayed Al Nahyan since 2008. Shekih Mansour is the UAE’s Deputy Prime Minister and Minister of Presidential Affairs, and the half-brother of the UAE’s current president Sheikh Khalifa bin Zayed Al Nahyan. He sits on the boards of various government entities as well as several key Emirati sovereign wealth funds – including the International Petroleum Investment Company, the Abu Dhabi Investment Council, and the Abu Dhabi Investment Authority (ADIA). Shekih Mansour often likes to boast that he has put his own money into Manchester City, he engineered the acquisition in 2008 with huge sums from ADIA and secured the team’s sponsorship deal from Abu Dhabi’s sovereign wealth fund-backed airline, Etihad.

Manchester City players wearing Etihad sponsorship


Paris Saint-Germain has been in the hands of Qatari businessman Nasser bin Ghanim Al-Khelaïfi since 2011. Al-Khelaïfi is not a Qatari royal family member, but he has a close personal relationship with Qatar’s current Emir Sheikh Tamim bin Hamad Al Thani, and he has been a government “Minister without Portfolio” since 2013. The Paris Saint-Germain deal was brokered by Qatar Sports Investments, which is a subsidiary of Qatar’s primary sovereign wealth fund, the Qatar Investment Authority (QIA). In addition, just a few months before the deal was official, the Qatari government-funded Al Jazeera Sports had purchased the broadcasting rights for the French Ligue 1, which was facing a looming financial crisis in 2010. Soon, Al Jazeera Sports was rebranded as beIN Media, with Al-Khelaïfi named founder and chair.

The Bahrain-Merida professional cycling team, now Team Bahrain Victorious, had its first world tour season in 2017. It was the project of Sheikh Nasser bin Hamad Al Khalifa, who is the fourth son of the King of Bahrain, as well as Commander of Bahrain’s Royal Guard, President of the Bahrain Olympic Committee, and Head of the Supreme Council for Youth and Sports. Sheikh Nasser became enamored with the idea after a “casual bike ride” with Vincenzo Nibali, who would become one of the first riders signed and an enthusiastic spokesman for the team. From the beginning, Sheikh Nasser got sponsorship for the team from Mumtalakat, the government’s sovereign wealth fund. He was also able to secure support from companies that the sovereign wealth fund had controlled stakes in, such as McLaren, which is 63%-owned by Mumtalakat. McLaren ended their sponsorship after the 2020 season, and the reconfigured Team Bahrain Victorious now names the government of Bahrain as a leading sponsor, as well as Mumtalakat.


The PIF-Newcastle deal in context

In each of these examples of Manchester City, Paris Saint-Germain and Bahrain-Merida, support from the Gulf sovereign wealth funds is engineered by elites with a particular personal interest in sports and who clearly relish the high-profile media spectacle that their team ownership allows. But these arrangements are about far more than just egos. As official representatives of their governments and part of ruling families or with royal family ties, the decisions of people like Sheikh Mansour, Sheikh Nasser and Nasser Al-Khelaïfi cannot be divorced from the government. These men are obviously self-interested, but they are also political and financial brokers for their home countries. Given how Gulf money flows through the funds to support a wide range of financial and political objectives, their support for the official policies of the UAE, Bahrain or Qatar is obvious if unstated.


Read also: The Gulf’s sovereign wealth fund cities


In a sense, Mohammed bin Salman is no different from his Gulf peers. He has taken an activist approach to using the PIF sovereign wealth fund to advance his own ambitions and his personal pet projects. But as Saudi Arabia’s de facto head of state, he is a higher-profile figure than the other Gulf elites who have used their funds in the realm of international sports. And the PIF-Newcastle deal is more open than these earlier cases in that it is not shrouded (even thinly) behind a sovereign wealth fund subsidiary or ancillary networks as in Qatar or the UAE, for example.

These two factors combine to make the Premier League’s ultimate decision that the PIF control of Newcastle did not amount to the Saudi state’s control of the club. What ultimately allowed the deal to go forward after the lengthy wrangling over this question was, according to Premier League Chief Executive Richard Masters, “legally binding assurances” that the Saudi state would not control the club – supposedly resulting in the owner’s removal if the Saudi government was found as controlling the team. The PIF-Newcastle deal was also surprising in the broader scheme of elite sport sponsorship from the Gulf because it put geopolitical rivalries between the Gulf countries on display more visibly than before. Gulf rivalries have simmered just below the surface in European sports for quite a while – mostly around smaller sponsorships and media issues. But the Newcastle deal actually precipitated a direct conflict between two different arms of the Gulf sovereign wealth funds’ sport machinery.

A major hold-up in the takeover process was a challenge filed with the Premier League by beIN Media – the Qatari sovereign wealth fund sports media company headed by Nasser Al-Khelaïfi described above. beIN owns the Premier League’s broadcast rights in the Middle East, but its broadcasts were then blocked and pirated in Saudi Arabia during the 43-month Qatar-Gulf diplomatic dispute (or Qatar “blockade”) beginning in 2017. In 2018, beIN filed a complaint with the WTO over Saudi intellectual property rights violations – a dispute that it won in 2020. beIN Media had protested the Newcastle deal and embarked on a systematic effort to stop it, but with the restoration of diplomatic ties between Qatar and Saudi Arabia in January 2021, their opposition subsided and the deal could move forward with the Premier League’s eventual backtracking on the question of Saudi “state” or “non-state” ownership of the club.

The immediate crisis in Qatar-Gulf relations has been resolved, but regional antagonisms have not subsided. And this is precisely what makes sovereign wealth fund involvement in European sports important to understand as something far more than “soft power” or “sportswashing.” These clichés gloss over the way that Gulf money may touch down in places like Manchester, Paris or Newcastle, but that it is part of a broader circuit of power that courses through the global sports industry that is not apart from politics, but a part. What appear to be Gulf-specific rivalries are not isolated to the Arabian Peninsula: where the money goes so does the politics. The European football scene was immediately reminded of this when the German club Schalke 04, long sponsored by the Russian state-owned gas giant Gazprom, abruptly ended the sponsorship deal when Russia’s military invaded Ukraine in February 2022.

Some observers have decried the Premier League’s decision to accept Saudi guarantees that the state itself will not control Newcastle, but it is no less outrageous than the International Olympic Council’s endless false claims to “political neutrality.” It is possible that the sports-related sanctioning of Russia following its attack on Ukraine marks a clear break with these organizations’ commitment to the neutrality myth. This is still an open question, but the barring of Russian athletes from the 2022 Paralympic Games and the FIFA World Cup clearly illustrates that Western-based sports governing bodies have always been important arenas for geopolitics.

More often than not, though, sports organizations are most concerned with questions of money. In this sense, the Gulf sovereign wealth funds are just a new channel for this money to flow to the West via these sports institutions, clubs and companies. Given that European countries have been so reliant on Russian gas till now, it is hard to imagine that anyone in the sporting world or otherwise will want to antagonize Qatar, which sits atop the third largest gas supply in the world. It is precisely this gas that endows Qatar’s massive sovereign wealth fund, the QIA, which has been harnessed in basically all aspects of the country’s preparation for the FIFA World Cup. So as the tournament begins, we will soon have another opportunity to see how the global sporting world navigates the turbulent terrain of contemporary geopolitics. If one prediction is merited, it is that this spectacle will be anything but “neutral.”