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And the winner is… Abu Dhabi!

, May 12, 2014, 1 Comments

Abu Dubai Manchester City-Football Club-MarketExpressEnglish Premier League title went last night, for second time in three years, to Manchester City, also known as Abu Dhabi Football Club.In 2008, the club was acquired by ADUG, a holding company owned by Sheikh Mansour.

And it has since then signed different agreements with other companies from the Emirate such as Etihad (sponsor of stadium and t-shirts), TCA Abu Dhabi, Etisalat and Aabar, enjoying a privileged financial situation to buy and keep happy some of the world’s best players.

That football is today more a business than a sport is not a secret. Since the IPO of the Spurs in 1983, fifty clubs have gone public into European stock markets, with discouraging results. The arrival of financial tycoons has also had mixed results on the targeted clubs. Few will remember Dmitry Pietrman, an Ukranian wealthy man that acquired different Spanish clubs between 1991 and 2006 with diverse outcomes. The arrival of Russian businessman Abramovich to Chelsea FC in 2003 was better-known, and allowed the team not only to win a couple of trophies throughout the years, but also to record bigger-than-ever financial losses. In 2011, the acquisition of Spanish club Racing by Indian businessman Ali Syed and the subsequent default of payments filled up a couple of front-pages too.

The story has been very different with Arab wealthy individuals, who love and understand football (and business) more than anything. Besides Abu Dhabi’s Al Nahyan success story in Manchester, Dubai’s Al Makhtoum disembarked in London and have been sponsoring Arsenal’s stadium and t-shirts with Emirates since 2004. Other teams sponsored by the flagship airline include AC Milan, Paris Saint-Germain and Real Madrid. Another holding group from Dubai was also expected to buy Spanish Getafe and change its name to “Team Dubai”, but the deal was never completed.

In 2010, Libyan investment company Lafico bought 7.5% of Italian club Juventus right before the war started and its assets were unfrozen. Qataris are also playing an increasingly important role in the European football, with the acquisition of Spanish club Malaga, the sponsorship of Barcelona’s t-shirt and the purchase of Paris Saint-Germain in 2011, the only major football club in a European city like Paris (and whose t-shirts are sponsored by a different emirate), with the clear objective of promoting 2022 World Cup.

There has been a lot of controversy surrounding the millionaire contracts signed between private companies and sports clubs in times of uncertainty. But remember, economy is just a matter of supply and demand. Take the case of Real Madrid, who has paid back the record-high hire of Cristiano Ronaldo only with the sale of t-shirts (now sponsored by Emirates). Spaniards may be jobless, but they still have money to buy football t-shirts.

Football is not the only sport moving money. The US has the world’s most known leagues in basketball (NBA), baseball (MLB), hockey (NHL) and American football (NFL). With the current salary levels, regulatory freedom for ownership, and loses of any local or national tie, it is only a matter of time until the European Football Leagues become a business as big as America’s professional sports. The question is, would we like that?

  • Peter Method

    Good article. I would only add that the Real Madrid t-shirts are also sold all over the world, not only in Spain 🙂