Qatar, a niche strategy designed and based on the sports industry

Qatar seeks to build a true sports industry integrated into the economic globalization of sport. To exist through sport. The 2022 World Cup marks a turning point in its sporting strategy.

Jean-Baptiste Guégan is a member of the Sport Business Observatory, consultant in Sport Geopolitics, teacher, author and lecturer. Article written in collaboration with Mourad El Bouanani and Alexandre Buzenet

Whether in family or in geopolitics, when you are the last born, you have to redouble your ingenuity to “make room” for yourself. Qatar therefore made the choice of sport, a sector which presented several advantages: it was little invested by its regional neighbors and it is very media-friendly. Organizing international sporting events was therefore the guarantee of existing through sport, but where winning is not easy. The defeat of the “Maroons” against Ecuador was the perfect illustration of this. To succeed in fully imposing itself, Qatar has resorted to a particularly financially ambitious investment strategy. Moreover, a strategy far from being limited to sport!

Qatar Investment Authority, Qatar’s sovereign wealth fund, mobilized numerous subsidiaries that enabled it to weave a global spider’s web, both sectoral and geographical (Dumortier, 2012). For example, in 2006, the Qatar Holding was created. It is responsible for taking assets in international industrial groups such as in Germany where it becomes a major shareholder of the Volkswagen group and of the German automotive industry as a whole. The same process is repeated for the real estate sector, where QIA delegates the management of its investments to the Qatari Diar Real Estate Company, which develops many real estate projects all over the world. We recently saw it in Malaysia, Turkey, Morocco and Egypt, through its subsidiary “Barwa”. If of course the francophilia of the royal family does not explain everything, France also appears to be an attractive territory with the acquisition of multiple stakes in our companies, whether Total, Accor or Vinci.

This strategy has thus enabled Qatar to take control of several sectors of activity and to optimize its profits. Unlike Saudi Arabia, which “(…) favors bonds in the best-rated states around the world and is fond of North American pension funds”, QIA brings together several high value-added sectors such as aeronautics, automotive, technology, energy, water, media, finance, land, real estate and…sport.

Funding sport to weigh in: the payer is the decision maker

In sport, participating, organizing and winning are not enough. International sport needs to be funded to take full advantage of it. Since the payer is the decision maker, the sports arm of QIA has been entrusted to Qatar Sports Investment (QSI), its specialized subsidiary headed by the Emir’s right-hand man, Nasser Al Khelaifi (NAK). In 2011, “Sport Illustrated” named him the most influential personality in the sports industry. The same year, he became Chairman and CEO of PSG and Chairman of the Paris Handball club, which affiliated with the PSG brand to become PSG Handball. President of the ECA, the European club lobby and member of the UEFA board of directors, Nasser Al Khelaïfi is a man of networks. Essential, he is one of the faces of Qatar abroad and of its institutional entryism.

Zlatan Ibrahimovic. Panoramic

In buying Paris Saint-Germain, QSI was not limited to creating an asset. He aimed to make the French capital a sports and multi-sports beacon in the service of the emirate, its visibility and its diplomacy of influence. The creation of BeIn Sport, a sporting offshoot of Al Jazeera, is also part of this logic of financing world sport to better penetrate it and promote Qatari interests. Since 2014, BeIN Media Group has continued to grow and weigh. Holder of the rights to more than sixty sports competitions from the NBA to the Champions League, it is present today in 43 countries around the world and has more than 55 million subscribers worldwide in 2020.

But Qatar does not stop there. It seeks to build a real sports industry integrated into the economic globalization of sport, and that, it builds around high visibility assets. A behavior that seems “rational” because it induces a logic of income diversification at different scales and integration into the entertainment sport value chains (social media, sponsorship contract, sports information, image).

On this last point, QIA’s investments in the transfer market bear witness to a new commitment to the economic and sporting progress of the global franchise that is PSG. The payment in 2017 from the Brazilian footballer Neymar clause (222 million euros) and the option to buy Frenchman Kylian Mbappe (180 million), the renewal of their contracts or the signing of Lionel Messi prove it. PSG has thus become the 7th club in the world for a valuation exceeding 3 billion euros (Forbes) in a decade. The second strongest progression of a sports franchise in the world behind the Golden State Warriors, the basketball team of San Francisco, NBA champion in title.

An effective sports diplomacy but which is not without limits

Qatari sports diplomacy is therefore in no way embryonic. According to geographer Mehdi Lazar, it is the geo-historical, geo-economic and geopolitical characteristics that have led Qatar to shape such a unique diplomacy. Because Qatari sporting affirmation is not limited to the sole desire to prepare for the post-oil era.

Its ambition is to make the emirate exist in collective representations and to shape them for its benefit. A tool of differentiation across the Gulf States, Qatar’s sports activism is also an element of nation building, national unity and cohesion. It opens the way to a wider reconstruction of identity from which the reigning dynasty, the Al Thânî, obviously seeks to draw. A necessity for a Young independent state since September 1971 and confronted with the historical threats of a complex regional space.

But while this type of development can certainly dazzle, many vulnerabilities and contradictions remain. Sport does not make reality disappear. The action of NGOs such as Amnesty International and the work of journalists Quentin Muller and Sébastien Castelier, The slaves of the oil manin particular shed critical light on the precariousness and living conditions of the thousands of workers who have built Doha for a decade and made possible the 2022 World Cup.

Admittedly irresistible, the real gains of Qatari sports diplomacy can very quickly become uncertain. The representations of Qatar find themselves trapped in a disarticulated and conflicting approach. The French example is eloquent between calls for boycotts, participation and repeated criticism. The business of seduction does not produce the expected effect. Far from there. Far from the expected narrative with the controversies surrounding in particular labor law and discriminationthe storytelling at work on the occasion of the 2022 World Cup dessert the interests of the state it is supposed to promote.

The armbands”One Love“against LGBTQ+ discrimination Statistics

One can also wonder about the uncertain future of geopolitical developments in the Gulf which could weigh on and destabilize the Qatari kingdom. Geographer Brigitte Dumortier explains how a climate of regional tension added to the strategic weaknesses of this micro-state could shatter Qatari ambitions. the 2017 blockade and the threat of an overthrow of the ruling dynasty demonstrated this. The question of the diversification of the Qatari economy and the sustainability of such a model at a time of climate change must also be raised.

The 2022 World Cup certainly marks a turning point in Qatari sports strategy. Scrutinized by the whole world, Qatar plays a lot with this event. The culmination of a policy that dates back more than a decade, football’s biggest selection competition is not without its risks. Exposure and the search for visibility have a price. That of confronting reality. If sportingly, it seems difficult to imagine a Qatari success, on the diplomatic level, this World Cup has already changed the nature of the relationship with its big neighbor, Saudi Arabia. See you in December 2022 the day after the final for a first assessment. It’s a safe bet that there will be no shortage of lessons!

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