Middle East investment lifts top European clubs to new heights

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Sheikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister and Minister for Presidential Affairs and owner of Manchester City Football Club with head coach Roberto Mancini, celebrating the club’s first English Premier League title in 44 years. Photo – UAEinteract.com

Investment from the Middle East is matching record levels of revenue in European football, a report compiled by an international professional services group said on Wednesday.

The 2012 Deloitte Football Money League reported that during the 2010/11 season, the combined revenues of the world’s 20 highest revenue generating football clubs grew by 3% year-on-year to exceed $6 billion, in part due to investment from the Middle East region.

The 2011/12 season highlighted the influence of Middle East investment in European football clubs, with the league titles in both England and France closely contested, and in the case of the Premier League won, by Middle East-owned clubs. In the Premier League, a dramatic final day saw Manchester City, owned by Abu Dhabi’s Sheikh Mansour, beat their city rivals Manchester United, on goal difference, to claim the club’s first league title since 1968. Meanwhile in Ligue 1, Paris Saint-Germain, owned by the Qatar Investment Authority, narrowly missed out on Le Championnat to Montpellier.

Whilst the most high profile area of investment by Middle East owners in recent years has been in the transfer market, with Manchester City spending over $700m on transfer fees since Sheikh Mansour’s takeover and Paris Saint-Germain being the largest spenders in world football so far this summer, there is also significant ongoing investment in physical infrastructure and facilities in Manchester, and stadium development plans being discussed in Paris.

Five clubs out of the 20 clubs featured in the Money League benefitted from shirt sponsorship agreements with Middle East based organisations. Barcelona, which signed an agreement with the Qatar Foundation, reported earnings worth $40m per season. The deal contributed to the club’s 13% revenue growth in 2010/11 and saw their revenue exceed $650m for the first time, narrowing the gap to Real Madrid, who maintained their position at the top of the Money League for a seventh consecutive season.

Commenting at the start of the 2012/13 football season in Europe, Dan Jones, Partner in the Sports Business Group at Deloitte, said: “Continued growth in revenues of the top 20 football clubs emphasises the strength of these clubs, especially in these tough economic times. Their large and loyal supporter bases, ability to drive strong broadcast audiences and continuing attraction to corporate partners has made them businesses with a global appeal and made them relatively resilient to the European economic downturn.”

Manchester City’s recent 10 year naming rights deal with Etihad Airways, estimated to be worth up to $600m, will further assist them in moving up the Money League in the years to come.

“It is no surprise that as Middle East based organisations look to further promote themselves on a global stage, we are increasingly seeing them choose football as a medium through which to achieve this. The global popularity of, and passion for, football offers a tremendous opportunity, especially in Europe’s top leagues in terms of brand and product exposure for sponsors. As European economies struggle with recessionary pressures, which may make securing sponsorship and investment challenging domestically, so there is an appetite from both European clubs and Middle Eastern companies alike to forge new partnerships,” Jones added.

Interest in European football has not been limited to club owners and sponsors. Broadcaster Al Jazeera has recently increased its broadcast rights portfolio with the acquisition of further European football rights.

Mark Roberts, a senior manager in Deloitte’s Sports Business Group, noted: “The appetite for football in the Middle East seems to be ever growing, with the acquisition of Nottingham Forest by the Al Hasawi family, being the most recent example. With the Middle East hosting its first FIFA World Cup in 2022, we expect to see further investment in football from Middle East sources in their domestic clubs, leagues and facilities as well as continued investment in European football.”

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