Industry News

The GCC's spending on sporting events and infrastructure

April 4, 2018 | Source: HM Sports Marketing and Research

 

GCC's expenditure on sporting events and infrastructure is currently at US$ 25bn and will increase to US$ 35bn in 2020. Previously unthinkable infrastructure projects were launched including Nakheel’s “The Palms”, the most prestigious of the Dubai property-development company’s list of altogether $30 billion megaprojects under way in 2007. Other projects are Saadiyat Island, just off the coast of Abu Dhabi, or the $500 million Hydropolis, the region’s first underwater hotel. Bahrain, Oman, and Qatar had similar islands under construction or in the planning stages. Particular focus was also put on sports infrastructure including Dubai Sports City, the Aspire Academy of Excellence, two Formula One Grand Prix tracks and many more. Money doesn’t just talk in the Gulf, it opens doors. And the doors being pushed open by the most ambitious Gulf states, such as Abu Dhabi, Qatar, Bahrain and Dubai, lead to the offices of the world’s biggest sports.

 

Despite a banking crisis, the leading Gulf nations are still investing big in sports events that will raise their profile and help wean their economies off the petrodollar. From digging for oil, they are digging for sporting gold. For tiny countries the size of large cities, with no sporting heritage, the Gulf states punch way above their weight in the global sports market. They paved the way in Britain with massive sponsorship deals, led by the Dubai-based Emirates Airline, which has its name over Arsenal’s stadium and shirts in a deal worth £100 million. The naming rights have been so successful that the airline has increased its sports’ sponsorship budget tenfold in a decade, putting its brand on motor racing and even the England rugby union team. Golf has followed with Rory McIlroy, Europe’s most promising young golfer, sponsored by Dubai’s Jumeirah hotels and resorts group, while a succession of Gulf-based consortiums have queued up to acquire Premier League clubs.

 

There is so much more: tennis, volleyball, the Fifa Beach Soccer World Cup in Dubai, a $250,000 (about £150,000) triathlon and more international cricket are on their way to the Gulf. And the finest golfers on the European Tour play for their biggest prize: the winner of the tour is actually the winner of the Race to Dubai, the end of a yellow brick road of gold and a bonus pot of $7.5 million. For long, the Gulf’s relationship with Formula One was tenuous.

 

Today, it boasts two Grands Prix, in Abu Dhabi and Bahrain, at a time when traditional tracks have deleted from the calendar. Both are showpiece tracks, with Abu Dhabi’s Yas Marina reputed to have cost as much as € 1 billion. But more than that, companies from the Emirates are now shareholders in Formula One’s best teams: the Mubadala Development Company holds a 5 per cent stake in Ferrari, and Bahrain’s Mumtalakat Holdings has 30 per cent of Lewis Hamilton’s McLaren team.

 

Football is the sheik’s obsession, but also shows their weakest spots: the leaders of Abu Dhabi, Dubai and Qatar often lack the patience with as well as the knowledge about Western cycles and processes. If they invest in a lot of money in a sports club, they expect it to win – immediately, not following a restructuring phase of two or three years. They believe they can spend money and win an Olympic or a World Cup bid, and they cannot understand why the world has doubts about their ability to stage these set-piece occasions.

 

The leaders of the Gulf states are becoming more ambitious: Qatar will be in the running to host the 2022 World Cup, while Dubai is running the rule over bidding for the 2020 Olympic Games. They are bids that would once have been laughed out of boardrooms of Fifa and the IOC. Not now. These key Gulf states not only want sport to transform their oil-based economies, they want it to affirm their status in the world. Sport is as a way of putting themselves on the map. And the leaders of these fabulously wealthy states know it is only a matter of time. Collectively, the Middle East states of Qatar, Dubai and Abu Dhabi have the biggest buying power in sport. And it shows.

 

  • £800 million Estimated cost of Abu Dhabi’s Yas Marina Formula One circuit

  • £170m Transfer spending in 2009 by Abu Dhabi-owned Manchester City

  • $60m Race fee paid by Abu Dhabi Yas Marina circuit to Bernie Ecclestone

  • $20m Tiger Woods paid to design his first golf course, The Tiger Woods Dubai

  • $1.25m Winner’s prize at golf’s Dubai World Championship next weekend

  • $6m Prize for the Dubai World Cup, world’s richest horse race

  • 30 per cent Holding in McLaren team held by Bahrain’s Mumtalakat

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