Arab Investors To Cut Spending on European Soccer

Arab investors in European soccer are likely to focus on club acquisition and sponsoring in the future, rather than on big ticket transfers in the wake of this week’s record European transfer spending spree.

As Abu Dhabi bids for three-time Italian champion AS Roma and Qatar reportedly seeks to acquire Manchester United, Arab investors are likely to start looking at cutting their losses in what amounts to expensive vanity purchases and focus on leveraging their acquisitions to enhance reputation, create business opportunities and improve soccer performance at home.

The retooling of Arab interest in European soccer follows record transfer spending on Monday in English soccer. Clubs spent a total of $315 million on players, breaking the 2008 spending record of $260 million.

Analysts say Abu Dhabi, which has so far spent $300 million on ensuring that Manchester City makes it into the Champion League, will cut back on spending once that goal has been achieved.

The focus on acquisition and sponsoring constitute a revival of Arab commercial interest in European soccer following a dip in Arab investment in the last two years as a result of the global economic downturn as well as Gulf disappointment that earlier acquisitions had done little to boost the region’s soccer performance.

Qatar clinched a $200 million sponsorship deal with FC Barcelona in December. The winner of the bid to host the 2022 World Cup is also mulling the possibility of bidding for Newcastle United.

Qatari businessman Shaikh Abdullah Bin Nasser Al Thani, a member of the royal family, last summer acquired Spain’s FC Malaga for €10.5 million and the takeover of €36 million in Malaga debt.

James M. Dorsey authors The Turbulent World of Middle East Soccer blog.