Strong men on and off the field

| November 20, 2021

Saudi Arabia seeks to play an increasingly visible role in European football but their purchase of Newcastle United Football Club reflects the wider trend of authoritarian governments investing in international sports.

After multiple failed attempts, a consortium led by Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF), and including PCP Capital Partners and RB Sports & Media succeeded in purchasing NUFC in October 2021.

International sporting events have long been a site of nation-building and international politicking. They are especially important as a tool of soft power for authoritarian governments seeking legitimacy on the international stage. For oil-rich Middle Eastern countries, sports investments are also a key element of their economic diversification strategies.

By purchasing prestigious properties, sporting teams, and foreign luxury brands, or courting foreign audiences through tourism and hosting high-visibility sporting events, these countries not only “brand” their nations, but also use these investments to balance against fluctuations in international commodity markets.

This strategy is typically pursued through sovereign wealth funds, such as the Qatar Investment Authority (QIA), Abu Dhabi Investment Authority (ADIA), the Investment Corporation of Dubai (ICD), and, especially since 2015, Saudi Arabia’s PIF. QIA, for example, has established stakes in major European brands such as Barclays, Credit Suisse, and Sainsbury’s, and in the last decade has increasingly made investments in East and Southeast Asia, particularly China, Malaysia, India, and Indonesia.

Ownership of high-profile football teams allow these countries to appeal to large international audiences. Qatar purchased French football team Paris Saint-Germain (PSG) in 2011, only months after being awarded the hosting rights to the FIFA World Cup in 2022.

This purchase, and the awarding of World Cup hosting rights, gave Qatar a solid foothold in the minds of the football-loving Parisians. This has strengthened relations between Qatari and French leaders, despite repeated clashes over Qatar’s support of Muslim Brotherhood movements.

Saudi Arabia Steps into the Spotlight

The PIF-led purchase of NUFC reflects Saudi Arabia’s increased focus on branding itself as a “football loving nation” and as a nation which is opening up progressively to attract tourism as part of the Kingdom’s ambitious 2030 Vision project. Much to the elation of resident Novocastrians, who waved the Saudi flag and donned makeshift shemaghs, the Saudi national headdress, the purchase displaced unpopular owner Mike Ashley and heralds a major reinvigoration of the club’s finances.

Yet previous attempts by the PIF and other members of the consortium to purchase NUFC had been soundly rebuffed, and their success in 2021 has been enormously controversial. Part of the controversy focused on Saudi-based pirate broadcaster BeoutQ – which pirated Qatar’s beIN Premier League broadcasts during the 2017-2021 diplomatic crisis between Qatar and the United Arab Emirates (UAE), Saudi Arabia, and Bahrain.

The broadcasting issue was resolved – the impetus being the NUFC deal but also improved relations between Qatar and Saudi Arabia. However further criticism has focused on Saudi Arabia’s human rights record and whether the PIF is functionally independent of the Saudi state.

While Yasir al-Rumayyan, a former banker and Chairman of Saudi Aramco, serves as PIF governor, Saudi Crown Prince and de facto ruler Mohammed bin Salman Al Saud (MBS) is Chairman. Internal Saudi government documents filed on an unrelated case in Canada revealed that al-Rumayyan had obeyed an order by a close aide of MBS to transfer ownership of 20 companies to the PIF during the notorious 2017 Ritz-Carlton corruption crackdown. One of those companies was the charter jet company that was later alleged to have been used in the plot to kill Washington Post columnist Jamal Khashoggi.

While there is no suggestion that al-Rumayyan himself was involved in the murder of Khashoggi, the incident demonstrates the Saudi Crown Prince was able to directly intervene into PIF activities. Amanda Staveley, CEO of PCP Capital Partners, has defended the independence of the PIF, claiming that the Crown Prince is busy and has little time to engage with Newcastle United. For its part, the English Premier League (EPL) approved the deal after it said it had been given “legally binding assurances” that the Saudi government would not control the club, although it has not specified that those were.

At least Newcastle won on human rights abuses

Views on the NUFC takeover reflect wider discussions around the role of autocrats, sovereign wealth funds, and “sportswashing,” referring to attempts by repressive actors to improve their reputation through hosting and investment in major sporting clubs and events. “In our assessment, this deal was always more about sportswashing than it was about football, with Saudi Arabia’s aggressive move into sport as a vehicle for image-management and PR plain for all to see,” claimed Sacha Deshmukh, CEO of Amnesty International UK.

NUFC fans have questioned, however, why the Saudi takeover of Newcastle United has sparked more upset than previous purchases of teams by Russian, Iranian, Emirati, Qatari, and Chinese oligarchs. After China’s President Xi Jinping declared his love for soccer and that he wanted China to be a superpower in the sport by 2050, for example, Chinese investors poured more than US$1.8 billion into acquiring stakes in over a dozen European teams between 2015 and 2017.

The furore over the PIF’s autonomy from the Saudi state is clearly hypocritical when UAE Deputy Prime Minister Sheikh Mansour bin Zahed al-Nahyan owns Manchester City, Emirates sponsors Real Madrid, Russia’s Gazprom sponsors FC Schalke, and so on.

We should reflect on “why the game as a whole has become so attractive to authoritarian regimes,” said the Football Supporters Association in the wake of the NUFC takeover. Former English Premier League CEO Ricky Parry was more blunt, claiming: “It’s a bit late to have a philosophical discussion on whether we want sovereign wealth funds to own football clubs…That horse has bolted.”

What does this mean for the 2022 World Cup?

Sportswashing initiatives by foreign autocrats are not undertaken in isolation of each other but often in competition. The crown jewel in the “football portfolio” is undoubtedly the FIFA World Cup 2022, currently the domain of the Qataris.

Saudi Arabia has attempted at times to stymie the event by, for example, quietly backing a FIFA proposal to the expand the World Cup into a 48-team tournament, which could have meant Qatar would have to share the hosting rights due to a lack of suitable infrastructure.

In 2019, the UAE similarly proposed that the 2017-2021 diplomatic crisis could be eased if Qatar shared the World Cup with its neighbours. Although the crisis was resolved without any public concession from the Qataris, Abu Dhabi and Dubai will nevertheless benefit from an influx of tourists to the region during the World Cup.

For the EPL, the Saudi purchase of Newcastle United has more direct consequences. Garry Hoffman, Chairman of the Premier League, suffered a vote of no-confidence and has resigned following a backlash from other clubs over the deal, and the EPL faces pressure to incorporate consideration of ethical issues into future ownership decisions.

For those concerned with the increasing soft power of authoritarian countries globally, however, Saudi Arabia’s successful takeover of NUFC suggests that sportswashing through international football is likely to continue.

This article was written by Dr Jessie Moritz, a Lecturer at the Australian National University and specialist on the political economy and international relations of the Arabian Peninsula; and Matthew Merrington, a PhD Candidate at the Australia National University researching Qatar’s foreign policy strategies and relations with Saudi Arabia.  It was published by the Australian Institute for International Affairs.

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