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Football Club Ownership: a Geopolitical Tool?

April 23, 2020
Writer(s): Akira Ridwan

Football and Politics have always been inseparable. 

From its foundations as a working man’s game in the height of industrial Britain to a now global pastime played on the dirt roads of Lagos to the favelas of Rio, as its scale has globalised, so too has its relation with politics.

 Gone are the days when a football team merely fights for its corner of the local community, the advent of television has rocketed the game to one where upwards of 3 billion (i) viewers from far-flung corners of the world tune in to the Premier League alone. 

As football has become a globalised game, so too has its politics, which is perhaps most poignant in the ownership of once local clubs as a vehicle for soft power and influence by wealthy individuals and even whole states.

The clearest example of the sport’s use as a proxy is seen in Saudi Arabia and Qatar’s fight for power and influence in the Middle East. 

What started as accusations levelled at Qatar for funding terrorism and the severing of diplomatic relations between the two powers has led to Saudi efforts to derail an entire World Cup, and curiously enough led to a conflict on ‘illegal football streaming’ which has now boiled over to an unlikely part of the world, in an unlikely part of Britain:

Newcastle. 

A consortium involving Saudi Arabia’s Public Investment Fund is set to be finalising a 300 million pound takeover of Newcastle United (ii), a club which has been bled dry for the past fifteen years by much-derided owner and Sports Direct tycoon Mike Ashley. If the deal goes through it could provide the long-suffering Newcastle fanbase with much-needed investment and would mean that the club are set to have the wealthiest owners in England; with the 320 bn pound Saudi Public Investment Fund far eclipsing the Abu Dhabi group-owned Manchester City (23.3 bn pound). (iii) 

However, this deal has been opposed by the Qatari beIN broadcast company which holds a lucrative $500 million USD contract to distribute Premier League games that could scupper the takeover and the ambitions of the perennial underachievers who have not won a major trophy since 1955. 

The letter sent to all 20 Premier League teams and the league’s chief executive cites concerns regarding Saudi Arabia’s illegal streaming operation and that the potential acquirer ‘Not only caused huge damage to your club’s and the Premier League’s commercial revenues, but the legacy of the illegal service will continue to impact you going forward’. (iv) 

The allegations of Saudi Arabia backing an illegal streaming operation known as beoutQ transmitted via Arabsat, a Saudi-funded regional satellite operator, have led to a FIFA sanctioned investigation which concluded that the state has played a vital role in the operation, undermining beIN’s contract in the Middle East.

Given that beIN Media Group represents the Premier League’s largest overseas broadcasting contract (v), the league has found itself in the crosshairs of a proxy battle between the two Gulf states. 

The Premier League are in a tricky situation wherein if they approve the takeover, they could lose their lucrative contract which has the potential to affect not only their own finances but also trickle down into the 20 clubs in the league whose international broadcast revenue contributes as much as 45% of total payments made by the league. Given the indefinite postponement of matches as a result of Covid-19, a loss in future broadcasting revenue could mean clubs who are already struggling might not be able to recoup their losses from this season.

Source: Premier League website

Saudi Arabia’s efforts to make their mark on the world game is part of the state’s Vision 2030 (vi), a project to reduce its dependence on oil with goals including reinforcing economic activities and promoting a ‘softer and more secular’ image of the Kingdom. 

The proposed takeover of Newcastle United and the siphoning of beIN streams come at a time when the 2022 World Cup is set to be hosted in Qatar. Saudi Arabia and the UAE have realised in its diplomatic conflict that a key way it can hurt Qatar is to take away its World Cup where they have made considerable investment in facilities and infrastructure, to the tune of almost $500 million USD a week which could see more than $200 bn USD spent in total. (vii)

Leaked documents involving UAE Ambassador to the United States Yousef al-Otaiba in 2017 show that one of their aims is to force Qatar to share the World Cup with a ‘Gulf Cooperation Council’ of Arab monarchies through using a public relations campaign to ‘point out Qatar’s dwindling cash reserves’ to FIFA, pointing out that the small gulf nation can not afford to continue to build the necessary infrastructure. (viii) 

Furthermore, much has been made about Qatar’s human rights abuses towards migrant workers on their World Cup projects as well as corruption by the state. 

What muddies the waters is that some of these allegations have been made by groups with unknown sources of funding that have ultimately been picked up by mainstream media such as the BBC. A 2018 event in London that launched the Foundation For Sports Integrity, whose aim is to ‘fund research into sports corruption and related matters…’(ix), was met with controversy as to who is funding the Foundation due to the size and glossy nature of the launch, with some alleging that it had received funding from either Saudi Arabia or the UAE. 

The phenomenon of football as a vehicle for influence and soft power is not limited to the existence of state-backed owners as in the example of UAE Sheikh Mansour’s Manchester City, or the Qatar Investment Authority’s Paris Saint-Germain. Several companies including Red Bull as well as Russian natural gas company Gazprom have used sponsorship and ownership of football clubs as a way of advertising and utilising soft power in key networks such as German club Schalke, where Gazprom supply approximately 35% of Germany’s gas imports (x). 

Another growing hotbed of foreign investment is the area in the UK known as the West Midlands, centred around Birmingham, England’s second-largest city. Wolverhampton Wanderers, Aston Villa as well as West Bromwich Albion have all welcomed Chinese investors in recent years. 

But perhaps the underlying reason for this investment does not solely lie on the sport.

The proposed construction of the High Speed 2 (HS2) rail link from London to Birmingham and further north has received interest from Chinese companies who are keen to secure the lucrative contract and senior leaders from major cities in the West Midlands have shopped the region’s investment opportunities in a sales trip to China in November 2019 (xi). One of the companies that the delegation met with was Fosun, an investment consortium who own Wolverhampton Wanderers and have put millions into attaining promotion and qualification for the Europa League in recent years. 

The existing ties with the West Midlands region as well as Fosun’s securing of a $4.2 bn USD contract in China’s first privately-controlled high speed rail project (xii) perhaps coincidentally or not, point to an interest in securing the HS2 project.

The Chinese interest in the HS2 fits into their wider Belt and Road Initiative (BRI), with an estimated $900 bn USD worth of infrastructure projects already planned or underway across Asia, Europe and Africa. 

Fosun’s investment in Wolverhampton has been by all accounts a success with fans enjoying the team’s performances as a byproduct of the clubs forays in the transfer market and is an example where football ownership has created the necessary goodwill within local communities which would serve as an enabler (xiii) for projects such as the HS2. 

However, not all clubs are reaping mutual benefits when it comes to ownership.

Whilst it can be argued that increasing investment into the sport has allowed historically ‘small’ clubs to challenge the traditionally dominant clubs such as Liverpool and Manchester United in their quest for trophies, the danger that comes with this increased interest is that football clubs are being used as mere pawns in a grander battle of power and control by corporations and individuals who tear down the heart and soul of these clubs and discard them once they have served their purpose.

References:

(i) https://www.premierleague.com/news/1280062

(ii) https://www.theguardian.com/football/2020/apr/15/newcastle-takeover-will-saudi-deal-be-the-one-that-finally-goes-through

(iii) https://www.chroniclelive.co.uk/sport/football/football-news/newcastle-united-takeover-rich-list-18122976

(iv) https://www.nytimes.com/2020/04/21/sports/soccer/saudi-arabia-qatar-beIN-premier-league.html

(v) https://www.ft.com/content/bfcd005c-4506-432c-8535-57402407b486

(vi) https://www.theguardian.com/football/2020/apr/15/newcastle-takeover-will-saudi-deal-be-the-one-that-finally-goes-through

(vii) https://www.theguardian.com/football/2017/feb/08/qatar-spending-500m-a-week-on-world-cup-projects-2022

(viii) https://theintercept.com/2017/11/09/uae-qatar-oitaba-rowland-banque-havilland-world-cup/

(ix) https://www.theguardian.com/football/2018/jul/16/football-and-fat-fees-questions-raised-over-funding-of-sporting-conference

(x) https://www.youtube.com/watch?v=NxcrSL3-BKc

(xi) https://wmgrowth.com/article/west-midlands-leaders-build-relationships-ahead-of-uk-china-summit

(xii) https://www.reuters.com/article/us-china-railway/chinas-first-private-high-speed-rail-project-gets-4-billion-financing-xinhua-idUSKCN1S304G

(xiii) https://offthepitch.com/a/football-being-used-further-chinese-interest-uk-infrastructure

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