The fund bought a roughly 5 percent stake in Washington sports teams as part of a $4bn deal, the Associated Press and Bloomberg report.
Qatar’s sovereign wealth fund is buying a roughly 5 percent stake in the parent company of the NBA’s Washington Wizards, NHL’s Washington Capitals and WNBA’s Washington Mystics as part of a $4bn deal, reports said.
Bloomberg News and The Associated Press cited sources who spoke on condition of anonymity because the agreement between the Qatar Investment Authority and Monumental Sports & Entertainment has not yet been officially announced.
It is believed to be the first time the Qatari government has invested in professional sports in the US. Sportico first reported the transaction, saying it was the first time any sovereign wealth fund had bought ownership of an American team.
This is not Qatar’s first big foray into the big game. The Middle Eastern country last year hosted the football World Cup for the first time, helping FIFA to achieve a record level of revenue due to the increase in ticket sales and hospitality. .
Qatar Sports Investments, a subsidiary of the state-run fund, has had majority control of French football club Paris Saint-Germain since 2011. The same group agreed in October to buy a 22 percent stake in Portuguese club Braga .
Entering a leading US market, even as a minority partner, further expands the Qatari reach in the world of sports.
NBA spokesman Mike Bass said the league’s Board of Governors decided in November to allow “passive, non-controlling, minority investments in NBA teams by institutional investors, including university endowments, foreign and domestic.” pension funds and sovereign wealth funds, under a set of policy guidelines adopted at the time”. All investments that fit that bill require league review and NBA Board approval.
“The NBA Board is currently reviewing QIA’s potential investment [Qatar Investment Authority] of Monumental Sports & Entertainment, the parent company of the Washington Wizards, among other sports properties,” Bass said. “According to the policy, if approved, QIA will have a passive, minority investment in the team, without participating in its operations or decision-making.”
NHL Deputy Commissioner Bill Daly said the league has approved the investment.
An expert on those transactions said that sports are part of Qatar’s nation-branding and public diplomacy strategy and the move is in line with that strategy.
“Part of that strategy includes buying, sponsoring or buying equity in international sports organizations in Western markets, especially in central cities,” said Yoav Dubinsky, sports business instructor at Lundquist College of Business at the University of Oregon.
“From a political standpoint, this means more legitimacy for Qatar as a business partner of the West, including in the heart of American politics.”
Dubinsky added that the size of the stake is likely to limit the impact Qatar can have on the teams, unlike Paris Saint-Germain’s control. That fits the NBA’s definition of a passive, minority investment.
Neighboring Saudi Arabia has also moved into US sports. Its sovereign wealth fund, which funds the new LIV Golf series, has agreed to a business partnership with the PGA Tour.
Ted Leonsis, who has owned the Capitals since 1999 and has been the 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 the Capital City Go-Go’s of the G League and Capital One Arena in Washington and recently took over the media outlet formerly known as NBC Sports Washington, now Monumental Sports Network.
