Forbes Middle East


The Golden Goal

Hannah Stewart
The Golden Goal
From the English Premiership to La Liga in Spain, football is more than a beautiful game; it’s big business.

For most, childhood dreams of footballing stardom fade into oblivion as the years pass by; societal norms forcing us to hang up the boots and study towards ‘proper jobs’ instead. But for those still dreaming at corporate desks, a world away from the colorful strips of a five-a-side youth, there is hope. Cheering from the sidelines is no longer the only way to take part in the beautiful game—assuming you have dollars by the multi-million (and preferably a leading airline) at your disposal, that is.

A whopping $8.4 billion: that’s the combined 2013-2014 revenue of 20 of the world’s leading football clubs by revenue, according to the Football Money League published by Deloitte in January 2015—and Middle Eastern investors have had a sizeable foot in it.

Pinpointing who has invested in what isn’t rocket science. Athletic torsos at five of the top 10 clubs take to the pitch every week sporting shirts embellished with the logos of now-iconic Middle Eastern airlines. Here, match day rivalry isn’t limited to football: while Real Madrid, Arsenal and Paris Saint-Germaine—with combined revenues of almost $1.88 billion—encourage us to ‘Fly Emirates’, FC Barcelona champions Qatar Airways, and Manchester City takes to the skies with Etihad.

Why airlines, you might ask? Alex Thorpe of Deloitte’s Sports Business Group explains that the aviation powerhouses in question all, by their nature, operate across the globe. “This means that a medium such as European football, which is viewed all over the world, provides almost unrivaled exposure…offering comparatively young brands real penetration across a huge number of markets in a very short period of time,” he says.

The unrivaled exposure that Thorpe speaks of, counts as one of the main motivations spurring wealthy investors—airlines or otherwise—to buy into football. And with exposure comes kudos. “The status of owning a football club can provide an enhanced media and business profile, access to important corporate, personal and political relationships, as well as the excitement on and off the pitch should the club be successful,” explains Deloitte’s sports expert.

Potential capital gain on selling a club also features amongst the investing attractions. What does not is the prospect of returns. Football clubs are renowned for splashing their cash to maximize on-pitch success while turning little in the way of profit—or sometimes none at all.

But even without attractive annual dividends, the Gulf’s apparent affinity for European football sponsorship sits within a broader context of the sport’s international appeal. The highest profile investments into European football may hail from the GCC, but Thorpe points to the fact that there are more American owners across the “big five leagues” (Spain, UK, Germany, France, Italy) than there are from the Middle East. The trend over the last two decades as European club football has gained international exposure has been that “investors from non-European markets are increasingly interested in being part of this story,” says Thorpe.

The role of wealthy investors in the footballing fairytale extends further than the polyester shirts donned by soc­cer stars and their tribes of followers across the globe. In addition to a deal with Dubai’s carrier, Emirates, a part­nership with the Qatar Tourism Authority helped Paris Saint-Germaine to record-breaking commercial revenues of $444.6 million for the 2013-2014 season, according to Deloitte, and there’s no sign of a letup in 2015.

“With several recent commercial partnership renew­als, as well as the imminent development of the Santiago Bernabéu stadium, the importance of Middle East partners for Money League clubs looks set to continue,” says Dan Jones, Partner in the Sports Business Group at Deloitte.

The Ø400 million-renovation plans ($455 mil­lion) for the Estadio Santiago Bernabéu—home of Real Madrid—hint at the club’s growing wealth. Abu Dhabi’s International Petroleum Investment Co. (IPIC), is set to back the project through providing, as IPIC’s Managing Director Khadem al Qubaisi, put it recently, “commercial means to build the world’s greatest sports facility.”

The world’s best facility is nothing short of fitting for the La Liga club which amassed more than $745 million in revenue last year by Deloitte’s calculations. The income, with commercial and broadcast earnings at its core, has helped place Real Madrid at the top of the Football Money League table for the 10th consecutive year. Revenues of almost $703 million make Manchester United runner-up in this year’s list and the second club ever to surpass the $700 million mark.

The English club’s commercial success comes despite a subdued football season following the retirement of legendary manager, Sir Alex Ferguson. Austin Houlihan, Senior Manager at Deloitte attributes the triumph to the Premier League club’s “commercial strategy of securing global and regional partners”. Highlighting the club’s 83% growth in commercial revenues (local currency) over the past three years, he explains that broadcast revenue increased to $220.2 million thanks to the latest Premier League media deals.

On that front, Manchester United is not alone: the eight English clubs amongst the top 20 in Deloitte’s Football Money League achieved total broadcast revenues of $1.5 billion, and by all accounts, there’s more to come. “The Premier League is currently negotiating for the next cycle of media rights and further uplifts are anticipated,” says Houlihan.

While big brand sponsors revel in the media spotlight, investing in the beautiful game appears to be the reserve of investors with dollars by the billion, a penchant for football and—in the case of the GCC—a lucrative airline to their name. For the rest of us, relegated to the sidelines, all we can do is stand by and watch as the game plays out.
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