According to reports, Qatar’s sovereign wealth fund has decided to invest around $4 billion to buy a 5% stake in the parent company of the NBA’s Washington Wizards, who also owns NHL’s Washington Capitals and WNBA’s Washington Mystics.
As the agreement hasn’t been officially announced, important media giants like The Associated Press decided to only quote sources speaking on condition of anonymity.
At the end of last year, NBA spokesperson Mike Bass announced that the league decided to permit “passive, non-controlling, minority investments in NBA teams by institutional investors, including university endowments, foreign and domestic pension funds and sovereign wealth funds, subject to a set of policy guidelines adopted at that time”.
This deal would be the first time that the government of Qatar is investing in American professional sports, and also the first time any sovereign wealth fund has bought into owning a US team.
However, Qatar has been making strong investment in major sports around the world for some time. Not only did they host last year’s soccer World Cup, they also own the most of French club Paris Saint-Germain since 2011, and 22% of Portuguese team Sporting Braga.
“The NBA Board is currently reviewing a potential investment by QIA [Qatar Investment Authority] in Monumental Sports & Entertainment, the parent company of the Washington Wizards, among other sports properties,” Bass said back in November. “In accordance with the policy, if approved, QIA would have a passive, minority investment in the team, with no involvement in its operations or decision-making.”
Expert in international business Yoav Dubinksy explains that sports are part of Qatar’s international branding that looks to create strategic diplomacy through these initiatives.
“Part of that strategy includes purchasing, sponsoring or buying equity in international sports organizations in Western markets, especially in central cities,” he said. “From a political standpoint, it means further legitimising Qatar as a business partner in the West, including in the heart of American politics.”
NBA Commissioner Adam Silver recently said he’s cautious about Saudi investment in the NBA
Saudi Arabia has been investing in sports all around the world and it seems like it’s only a matter of time that they knock on the NBA’s door. However, league commissioner Adam Silver believes they should remain cautious over the opportunity, as he considers it to be a double-edged sword.
During a recent interview on “The Dan Patrick Show”, Silver gave his honest take on upcoming investments from Middle Eastern countries, talking about both advantages and disadvantages using their recent merge with PGA as an example.
“When the Saudis invest in sports, it gets outsized attention,” the commissioner said. “Now, I don’t want to complain about that because we want to get outsized attention. On the other hand, somebody could go down the list there. They are investors in some of our largest American corporations. Some of the most well-known brands have investments from them.
“And I also think it’s a two-edged sword. I hear the comments about sportswashing. … I think people learn about these countries, learn about what’s happening in the world in ways they otherwise wouldn’t. So I think the media does its job.”
Source: Basketball Insider