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Qatar turns to football for fame and fans

Category: Business

Published: 11th Jan 2013 00:03:32

The emerald green lawns of Qatar's Education City campus would serve nicely as football pitches.

And that is pretty apt given it is home to an organisation that the sport has catapulted into public consciousness.

Set up by the second wife of Qatar's ruler to invest some of the nation's vast oil and gas wealth on developing culture, education, science and research, the Qatar Foundation was almost unheard of outside the region until a couple of years ago.

But then a deal was struck to put its name on the famous red and blue stripes of the football club widely agreed to be the world's best, Spanish league leaders Barcelona.

The foundation says awareness of its work has grown "beyond expectations".

And the reported $40m (£25m) a year being paid to the Catalan giants is just another way that the state is pumping money into European football.

Five of the 20 richest clubs in Europe are sponsored by a Gulf company, according to the latest Deloitte Football Money League.

Besides Barcelona, they include Arsenal and AC Milan, backed by Dubai's Emirates, and Manchester City whose shirt and stadium carry the name of Abu Dhabi carrier Etihad.

Partly this is because growing Middle Eastern companies see football as a way to expand their brand, says Dan Jones, partner in Deloitte's sports business group, but he adds there are also more practical factors at play.

"As European economies struggle with recessionary pressures, which may make securing sponsorship and investment challenging domestically, there is an appetite from both European clubs and Middle Eastern companies alike to forge new partnerships."

And as the richest of them all - indeed in the world - with a GDP per capita estimated at $99,000, clubs are eyeing Qatar with particular interest.

Next season Barcelona's shirt sponsor will change again - for the first time to a commercial, profit-driven organisation - to the dismay of some of its fans.

And that company will be Qatar Airways - after the Qatari investment arm that signed the agreement invoked a clause allowing it to switch the sponsor to another national entity, only two seasons into a five-year contract.

"The real difference is that Qatar Airways has something to sell," says Nick Griffin, executive business director at The Brand Union Middle East.

"This is big for them. Their name is on the shirts of the world's best football team. Customers will make decisions based on that.

"Qatar Airways is flying all over the world and Barcelona have fans all over the world."

While buying space on a shirt is one thing, buying a football club is something else.

Qatar Investment Authority did just that though in 2011 when it took over French side Paris Saint-Germain - in a deal partly brokered by former President and PSG fan, Nicolas Sarkozy. Their newfound wealth has this week seen them linked with signing Real Madrid's Cristiano Ronaldo.

But despite football being a notoriously difficult way to get a return on your investment, there are plenty who think these sorts of deals - and Qatar's winning 2022 World Cup bid - make sense, even if there is no tangible financial gain

"Partly, it's about differentiating themselves," says David Roberts, director of the Qatar-based Royal United Services Institute (Rusi) think tank.

"You've got places like Dubai, Abu Dhabi, Bahrain all nearby and they are similar - same landscapes, same tribes, same language. Each of them wants to stand out.

"Dubai's gone for being a business hub and a tourism destination and one way Qatar is doing it is to create a niche, becoming a regional leader, and perhaps later a world leader in sports and sports branding."

They are countries with a strong sense of nationhood and when their team wins everyone feels it”

This is helping raise awareness of the tiny country, says Mr Roberts, whose friends in north-east England had never heard of Qatar when he moved here a few years ago.

"Now they know where it is because England played Brazil at football here, and it's going to hold a World Cup. It has been put on the map," he says.

And while this awareness will bring some financial returns, by attracting visitors and businesses, Mr Roberts says that for the rulers of Qatar - being known globally for something like sport - also brings some sense of security.

"It strikes me that anonymity is not an advantageous quality. This is a region that has seen three wars in three decades. A county analogous with Qatar - Kuwait - was invaded within people's fairly recent memories.

"I think there's a feeling among the elite here that anything you can do to get yourself known, to boost your reputation, might help should something terrible befall the country."

And if it is looking to other Gulf nations for inspiration, Qatar's footballing ambitions may have other motivations closer to home.

Abu Dhabi's Sheikh Mansour bin Zayed Al Nahyan took over Manchester City in 2008 and by 2012 the club won its first Premier League title in 44 years.

To do so the club spent what Deloitte puts at £700m - mainly on buying and paying superstars like Carlos Tevez and Sergio Aguero,

That has won hearts not just in the blue half of Manchester but back in the United Arab Emirates too, where football's popularity is growing and ownerships and sponsorships are creating rivalries. A recent televised clash between Manchester City and Arsenal was billed as "Abu Dhabi v Dubai".

It has shown that owning a football club can play well with locals - especially young people - says Nick Griffin of The Brand Union Middle East.

History tells us that if the buyer is a sovereign wealth fund or a key member of a royal family then that works out very well for the club”

And though perhaps the most domestically stable Gulf state, that is something that would interest Qatar at a time when the region has seen recent unrest and Gulf nations are spending lavishly to ensure their people are happy.

"These countries are young countries, they are countries with a strong sense of nationhood and when their team wins everyone feels it," says Mr Griffin.

"If you were on the streets of Abu Dhabi when Manchester City won the Premier League everyone was celebrating. People were out in their cars waving flags. It brought a tremendous sense of positive feeling to the country.

"The same will happen in Qatar. When Paris Saint-Germain win the French league it will bring people together in a very positive way."

Qatar is yet to buy any more clubs, though other Gulf investors have been, recently picking English targets with heritage and a strong fanbase, starved of success.

Last year former European champions Nottingham Forest were bought by Kuwait's Al-Hasawi family, while in December Dubai-based GFH Holdings paid about £50m for Leeds United.

But fans should be wary and "not see dollar signs" at the first sniff of interest from Middle East buyers, says James M Dorsey, author of a blog, The Turbulent World of Middle East Soccer.

Pointing to examples at Portsmouth in the UK, Malaga in Spain and Servette in Switzerland, he said Gulf takeovers did not have a perfect track record.

"History tells us that if the buyer is a sovereign wealth fund or a key member of a royal family then that works out very well for the club.

"If the buyer is a marginal member of a royal family or a businessman it can go either way but tends to turn out less well," says Mr Dorsey, a senior fellow at Singapore's Nanyang Technological University.

"In any acquisition you look at who the acquiring party is. And the fact he happens to come from the Gulf doesn't necessarily mean it is going to be in your best interest."

With enough money to bankroll anything from the Shard skyscraper in London to rebel fighters in Libya, fans of any club approached by Qatari state-backed buyers can be quietly confident.

And while it will always be a niche investment compared with other sectors such as energy, it seems Qatar's place in world football is only just kicking off.

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