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Qatari Government makes $4.05 billion investment in US sports through Monumental stake purchase
Basketball arena
The Qatari government purchased a roughly 5 percent stake in Monumental Sports & Entertainment, the parent company of the Washington Wizards. The deal was valued at around $4.05 billion, as reported by Sportico. The Qatari government’s investment portfolio also includes Barclays Center, the home of the Brooklyn Nets, and it sponsors the lounge in the Barclays Centre.
The Qatar Investment Authority has become the first Qatari government entity to invest in U.S. sports. This follows a change in the National Basketball Association’s (NBA) bylaws last December, which permitted sovereign wealth funds to purchase minority stakes in teams.
Despite the Qatari royal family owning three townhouses on New York’s Upper East Side, one of which was purchased for their servants at a cost of $41 million in 2017, their NBA investment was made in Washington, not New York.
NBA commissioner Adam Silver explained the new bylaw on “The Dan Patrick Show” recently, stating, “We allow funds to invest in teams, but not to control teams, not to influence teams.” Silver clarified that an individual must own a significant percentage of the team to control it. The NBA’s updated rule allows sovereign wealth funds to own up to 20 percent of a team.
Monumental Sports & Entertainment, founded and managed by CEO Ted Leonsis, also owns the National Hockey League’s (NHL) Washington Capitals, the Women’s National Basketball Association’s (WNBA) Washington Mystics, the NBA G League’s Capital City Go-Go, and the Capital One Arena.
The impact of this bylaw change extends beyond just one investment. It widens the pool of potential investors, especially at a time when NBA team valuations are rapidly increasing. This could potentially invite investments from other countries, such as Saudi Arabia.
Though Silver disclosed last month that no Saudi-backed fund has yet attempted to invest in a league team, the possibility of such an investment may be on the horizon. Silver pointed out that global sports investments bring attention to the investing countries, contributing to a broader understanding of global developments. As such, the media plays a crucial role in bringing this information to light.
With this new bylaw, the NBA is moving towards a globalized future, as sovereign wealth funds begin to influence the landscape of U.S. sports. The Qatari investment in Monumental Sports & Entertainment is just the beginning of what could be a significant shift in the world of sports investments.
