Reports say the Qatari sovereign wealth fund is buying about 5% of the parent company of the NBA’s Washington Wizards, the NHL’s Washington Capitals and the WNBA’s Washington Mystics in a $4 billion deal.
Bloomberg News quoted the Associated Press as citing sources who spoke on condition of anonymity because the deal between the Qatar Investment Authority and Monumental Sports & Entertainment has not been officially announced.
It is believed that this is the first time that the government of Qatar has invested in American professional sports. Sportico was the first to announce the deal, saying it was the first time a sovereign wealth fund had bought the property of an American team.
This is not Qatar’s first foray into a major sport. Last year, the Middle Eastern country hosted the FIFA World Cup for the first time, helping FIFA reach a record level of revenue thanks to booming ticket sales and hospitality.
Qatar Sports Investments, a subsidiary of the General Fund, has owned a majority stake in the French football club Paris Saint-Germain since 2011. The same group agreed in October to buy a 22% stake in the Portuguese club Braga.
Entering a major US market, even as a minority partner, is a further expansion of Qatar’s reach into the world of sports.
The league’s board of governors decided in November to allow passive, non-controlling, and minority investments in NBA teams by institutional investors, including university endowments, foreign and domestic pension funds, and sovereign wealth funds, said Mike Bass, a spokesman for the league. to a set of political guidelines adopted at the time. All investments appropriate to this rule require league review and approval by the NBA Board of Directors.
The NBA Board of Directors is currently reviewing a potential investment from the Qatar Investment Authority [Qatar Investment Authority] In Monumental Sports & Entertainment, the parent company of the Washington Wizards, among other sports properties,” Bass said. According to the policy, if approved, the QIA would have a minority passive investment in the team, without interference in its operations or decision-making. »
NHL Deputy Commissioner Bill Daley said the university has already agreed to the investment.
An expert on these transactions said that sport is part of the brand and public diplomacy of the State of Qatar, and that this step is in line with this strategy.
said Yoav Dubinsky, professor of mathematical business at Lundquist. University of Oregon Business School: “Part of this strategy involves purchasing, sponsoring, or buying stock in international sports organizations in western markets, especially in central cities.”
Politically, this means giving Qatar more legitimacy as a trading partner in the West, including at the heart of US politics.
Dubinsky added that the share size is likely to limit Qatar’s influence on the teams, in contrast to the control of Paris Saint-Germain. This would meet the National Basketball Association’s definition of passive minority investment.
Neighboring Saudi Arabia has also branched out into American sports. The sovereign wealth fund, which funded the start-up LIV Golf series, has entered into a business partnership with the PGA Tour.
Ted Leonsis, owner of The Capitals since 1999 and 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 Capital City Go-Go and Capital One Arena in Washington’s G League and recently acquired the media formerly NBC Sports Washington, now Monumental Sports Network.
