The Fuse

Petrostates, International Soccer, and Soft Power

by Matt Piotrowski | January 17, 2018

Manchester City FC is at the top of the English Premier League standings. Paris Saint-Germain’s roster includes the most expensive player ever in Neymar. Russia’s Gazprom is a sponsor of major European soccer teams and the UEFA Champions League, Europe’s premier club competition. The corporate logo of Emirates airlines is stamped on the front of Real Madrid’s and other prominent teams’ jerseys. Russia will be hosting the World Cup this summer, while Qatar is preparing for its turn in 2022.

What all these have in common is the link to petrodollars. Major oil producing countries, and wealthy individuals in certain petrostates, have injected billions of dollars into soccer clubs, mostly in European leagues, and their reach is spreading in an attempt to promote their “soft power.” This will only increase with petrostates hosting the two upcoming World Cups and attempts to infuse money into clubs beyond Europe.

“The oil aspect is coincidental. It’s about soft power and projecting themselves through cultural diplomacy.”

“The oil aspect is coincidental. It’s about soft power and projecting themselves through cultural diplomacy, not just military strength,” James M. Dorsey, a syndicated columnist and the author of the blog The Turbulent World of Middle East Soccer, told The Fuse.

Although many petrostates are injecting money into professional international soccer, the most prominent are Qatar, the UAE, and Russia.

Qatar’s questionable bid

Qatar is the most curious, given the controversy surrounding its bid for the 2022 Cup. Critics ask why Qatar, a country with no sports legacy, won a chance to host the Cup. FIFA has been notorious for long-standing corruption, and its move to award the tournament to Qatar was seen as odious, particularly because it came at the same time Russia won the 2018 bid. Ever since Qatar won the bid in 2010, there have been numerous allegations of bribery and serious wrongdoing, and French and Swiss prosecutors investigated the bidding process for both 2018 and 2022. FIFA independent ethics investigator Michael Garcia quit in 2014 to protest the handling of his report on alleged bribery during the bidding process.

Besides questions over the integrity of the bid, there is renewed scrutiny over Qatar amid its tension with its neighbors and its support of extremism, while human rights groups have blasted the OPEC producer over its treatment of its labor force. Human Rights Watch reported that hundreds of expatriate workers, many of whom are building soccer stadiums, are dying every year, in part because they are working under extreme conditions such as intense heat and humidity. But the Qatari government has not been transparent about the deaths and has not launched adequate investigations.

Using sports to gain favor abroad is part of Qatar’s multi-pronged approach to build its reputation.

Using sports to gain favor abroad is part of Qatar’s multi-pronged approach to build its reputation, along with being involved with foreign policy mediations, real estate purchases in Western countries, and blue chip investments. “The image Qatar has tried to project is forward-looking and progressive, that it is a good citizen of the world,” said Dorsey. “But Qatar’s attempt to promote its image has backfired through the controversies and its inability to manage expectations.”

Besides the World Cup, Qatar has taken other avenues to deepen its ties to international soccer throughout this decade. Since 2012, Qatar Sports Investment has been the only stakeholder of Paris Saint-Germain (PSG), which was heavily in debt before the takeover. Not only has the club dug itself out of debt, but it has become one of the richest and most successful European soccer teams, allowing it to purchase Brazilian Neymar from Barcelona for a world-record $263 million.

The UAE & Manchester City

The infusion of money into PSG reflects how petromoney can turn around a team’s fortune. The same situation has occurred for Manchester City. The team used to be one of the weaker contenders in the English Premier League and even dealt with relegation in the 1990s. But since it was purchased by Abu Dhabi United Group for Development and Investment (owned by Mansour bin Zayed Al Nahyan, a member of the Abu Dhabi ruling family) in 2008 for about $278 million, Manchester City has bought some of the top international talent, has been a perennial contender for the English title, and has also competed for the UEFA Champions League title. Manchester City, reportedly worth more than $2 billion, is at the top of the Premier League and has only lost one match this season.

The infusion of money into PSG reflects how petromoney can turn around a team’s fortune. The same situation has occurred for Manchester City.

Abu Dhabi has not stopped in Europe, buying stakes in teams in Australia, Japan, and the U.S. (New York City FC). But the UAE, an OPEC producer, has not been able to escape controversy. It has been at the center of human rights allegations and has come under heavy criticism for its involvement in the Yemen war and use of prisoner camps and torture. And although Manchester City fans are pleased with the club’s impressive performance, many have had to come to terms with how Middle East petromoney has transformed their team—and the entire league. After Sheikh Mansour bought the team, fans waved fake British notes with his picture in a sign of contempt.

Man-City-fan-fake--500-bi-008

The influence of Russian tycoons

Wealthy individuals and groups have also invested large sums of money into professional soccer teams, with mixed results. Bahrain’s Gulf Finance House took over Leeds United in 2012, but sold its last stake four years later with the team remaining in major debt and dealing with a bitter fan base. Fawaz Mubarak Al-Hasawi, a Kuwaiti businessman, bought Nottingham Forest FC, former European champions but currently a lower-tier team in England. His move is considered different than other purchases by foreigners. Hasawi did not buy the team out of “vanity,” said Dorsey. He had local ties, a connection to the team, and a strategy to improve the club.

Russian tycoons, meanwhile, have made a significant impact on European soccer and were influential in supporting the country’s bid for the 2018 World Cup. Gazprom, the world’s largest gas company and majority owned by the state, has been a major sponsor for a number of sports, particularly soccer, with direct ties to four European teams, most notably Zenit St. Petersburg and FC Schalke 04 in the German league.

Gazprom is also linked to Chelsea FC, which is owned by Roman Abramovich, who has close ties to Putin and has been alleged to have committed fraud, bribery, and theft. He made his fortune in the commodity business, and in particular profited handsomely from his sale of his oil company Sibneft to Gazprom in the middle of last decade. Like Manchester City, Chelsea has benefited greatly from the infusion of petromoney. Abramovich, who now lives in London, bought Chelsea in 2003, but did not turn a profit for years. Now, however, the team has a large global following and is reportedly worth more than $1.5 billion while competing annually at the top of the English Premier League.

Infusion of money from billionaires, petrostates to continue

Although wealthy oil-funded oligarchs and royals are not the only source of big money in soccer, the influx of petrodollars is part of a trend have changed the nature of the sport.

With soccer continuing to boom and the game reaching every part of the world now, the sport will remain a lucrative investment, a channel for the wealthy to make money and boost their prominence in the international realm. Stadiums are packed in Europe, popularity is growing in the Middle East, and viewership is on the rise in the U.S., where baseball, basketball, and football have traditionally dominated. The World Cup is the most watched event in the world, with one billion viewers for the final in 2014. Although wealthy oil-funded oligarchs and royals are not the only source of big money in soccer, the influx of petrodollars is part of a trend that has changed the nature of the sport: The world’s biggest clubs have become an important part of public relations campaigns for corrupt countries to obfuscate their other dubious actions.

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