The person spoke to The Associated Press on condition of
anonymity because the agreement between the Qatar Investment Authority and
Monumental Sports & Entertainment had not been announced.
It is believed to be the first time the government of Qatar
is investing in U.S. professional sports. Sportico first reported the
transaction, saying it is the first time any sovereign wealth fund has bought
into ownership of an American team.
It is not Qatar’s first big foray into major sports. The
Middle Eastern country last year hosted soccer’s World Cup for the first time,
helping FIFA reach a record revenue level because of booming ticket and
hospitality sales.
Qatar Sports Investments has owned majority control of
French soccer club Paris Saint-Germain since 2011. The same group agreed in
October to buy a 22% stake in Portuguese club Braga.
Getting into a top U.S. market, even as a minority partner,
is further expansion of Qatari reach into the sports world.
NBA spokesperson 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, subject to a set of
policy guidelines adopted at that time.” All investments fitting that bill
require league review and NBA Board approval.
“The NBA Board is currently reviewing a potential investment
by QIA in Monumental Sports & Entertainment, the parent company of the
Washington Wizards, among other sports properties,” Bass said. “In accordance
with the policy, if approved, QIA would have a passive, minority investment in
the team, with no involvement in its operations or decision-making.”
NHL Deputy Commissioner Bill Daly told the AP the league had
already approved the investment.
An expert in such transactions said sports are part of
Qatar’s nation-branding and public diplomacy strategy and that this move aligns
with that strategy.
“Part of that strategy includes purchasing, sponsoring or
buying equity in international sports organizations in Western markets,
especially in central cities,” said Dr. Yoav Dubinsky, instructor of sports
business in the Lundquist College of Business at the University of Oregon.
“From a political standpoint, it means further legitimizing Qatar as a business
partner in the West, including in the heart of American politics.”
Dubinsky added in an email to the AP that the size of the
stake would likely limit the impact Qatar can have on the teams, unlike the control
of Paris Saint-Germain. That would fit with the NBA’s definition of a passive,
minority investment.
Government and QIA officials in Qatar, which hosts the
forward headquarters of the U.S. military’s Central Command, declined to
comment when reached by the AP. It has used its natural gas wealth to raise its
profile internationally while also facing a yearslong boycott by regional
countries over a political dispute.
Qatar’s potential purchase also renews questions that
followed it during the FIFA World Cup, which include concerns over its human
rights record when it comes to LGBTQ+ rights and its treatment of laborers in
the country.
Neighboring Saudi Arabia has also moved into U.S. sports.
Its sovereign wealth fund, which funded the upstart LIV Golf series, has agreed
to a business partnership with the PGA Tour, sparking similar concerns.
Ted Leonsis, who has owned the Capitals since 1999 and been
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 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.