Football in the Desert

Even the most casual sporting observer will have noticed the exodus of elite English and European footballers headed to Saudi Arabia’s Pro League (Roshn Saudi League) in recent months. Messi might have chosen Miami but Ronaldo, Benzema, Kante, Firmino, Henderson and many more are now exciting packed-out stadiums in a league which only became fully professional in 2007. Some commentators suggest that this is a passing fad, a rich country jumping on the bandwagon of a long line of billionaires before to pursue a passion project. In this blog, we explore why we believe this is far from the reality of what’s happening and why the world order in pro sport is changing forever.  

Notwithstanding the title of this paper, actually, Gulf based sovereign investors have now achieved a serious foothold in a wide range of pro sports – from Sailing to Cycling to Powerboat Racing to F1 to Athletics to Tennis to MMA and across into fast growing sports like Padel Tennis. Facilities throughout the region are now globally renowned – just witness the amount of warm weather training by world class athletes happening at the Hamdan Sports Facility, the NAS complex & the Zayed Sports City all in UAE. And for you weekend warriors, when you’re next at a DXBP cap intro summit wanting to blow the long haul flight cobwebs away, you can now take a road bike and ride connected loops of nearly 100km on a purpose built, lit cycling track right in the Dubai desert (!         

Across the GCC region we have seen generational new social and economic visions announced in recent years all ultimately designed to achieve one thing: sustainable economies to replace the reliance on oil and gas revenues. A large part of that transformation is the introduction of sport & better health into daily lives whilst providing access to the population to see the jeopardy & entertainment that is unique to sports at the highest levels. Alongside this, having seen pro sports franchise values outpace almost all traditional investments in the last 30 years, the Middle East has figured that it can achieve a return on capital not just fund a sunk cost of building facilities for its burgeoning population.           

So, why is this any different to the deals done in sport in the last 3 or 4 decades? Put simply, the vision, money, ambition & energy comes from Sovereign governments not from UHNW individuals. This enables long term, debt free deals with little or no pressure to achieve exits for family wealth or succession reasons. These investments are a marathon not a sprint! Additionally, the GCC region’s ticket size makes 9 or 10 figure acquisitions normal and consistent with its other investment decisions. In fact, we don’t doubt that many proposals seen by Saudi Arabia, Qatar, UAE and others actually appear cheap. To put perspective around this, an entire MLB franchise in the USA could be purchased at the moment for only 6 times the amount Saudi Arabia’s Al Hilal football club just bid for just 1 football player (Mbappe)!

Given these characteristics, the track record of the region in sports is already very strong (witness the 2008 purchase of Manchester City FC by Abu Dhabi) & the next 10 years will undoubtedly see the region take a dominant position in the ownership of many international trophy sporting assets which will underpin the adoption of sport and entertainment as a key pillar of the societal development happening at astonishing pace in the GCC.