Sheikhs Use Soccer Diplomacy as Arabs Return to Invest in Spanish Market
Arab investors are buying into Spanish soccer to bridge a cultural divide and find deals in the European country’s ailing economy, such as building a Marbella super-yacht harbor.
A company led by Qatar’s Sheikh Abdullah Bin Nasser Al Thani won a contract in May to develop the $550 million port project a year after acquiring first-division team Malaga. Royal Emirates Group, controlled by Dubai’s Sheikh Butti Bin Suhail Al Maktoum, may invest in tourism and solar-energy projects after buying Madrid-based Getafe in April.
The Arabs see value in a country that “badly needs fresh dollars” as Europe’s sovereign debt crisis pushes up borrowing costs and hampers economic growth, said Jaume Gine, a professor at Barcelona’s ESADE business school who lectures on trade. Sheikh Butti plans to lead a 50-person delegation to meet with Spanish entrepreneurs at a Getafe game later this month, Royal Emirates Managing Director Kaiser Rafiq said.
“This is a sort of football diplomacy,” Rafiq said by telephone from Dubai. “There are some opportunities taking place in Spain due to the economic situation.”
Spain has closer ties to Muslim countries in northern Africa than the Gulf region, although Arab oil-rich countries have invested about 4.3 billion euros ($5.7 billion) in oil producer Cia Espanola de Petroleos SA and other Spanish companies since 2005, foreign ministry data shows.
It’s the latest foray by Gulf investors into European sports. Abu Dhabi’s Sheikh Mansour bin Zayed Al Nahyan bought English soccer’s Manchester City in 2008 and the McLaren Formula One team is part-owned by Bahrain’s sovereign wealth fund Mumtalakat Holding Co.
Royal Emirates has had a “cautious” welcome among Getafe fans after its $120 million buyout of the team because its plans aren’t clear, says lorry driver Rafael Ballano, who has followed the team since he was seven.
“They could decide to change the name of the team or move it somewhere else,” Ballano, 57, said. “They are welcome as long as they don’t undo what the club has spent 40 years building.”
Royal Emirates, which doesn’t plan to change Getafe’s management structure, is more active outside soccer, Rafiq said. It’s in talks with developers about financing a spa resort based on a former Arab settlement, Wadi Ash, near Granada, he said. Islamic leaders controlled the Granada region among other swathes of Iberia between 711 and 1492.
“The Arabs have very close ties to Spain and we feel that is a connection that should be evolved back again,” Rafiq said. The group is also interested in deals with solar-energy and pharmaceutical companies, Rafiq added.
On Spain’s Costa del Sol, Sheikh Abdullah’s $14 million acquisition of the Malaga team is “creating a social profile in our country that opens doors,” Jose Luis Hernandez, head of tourism in Marbella, said by telephone. Marbella town hall awarded the Qatari royal a contract to develop the Bajadilla harbor in May.
In an interview last July, Sheikh Abdullah’s associate Abdullah Ghubn, the Malaga vice president, said buying into sports can put you “in touch with the whole world.” Sheikh Abdullah wasn’t available for interview for this story, Malaga team spokesman Victor Varela said.
“You can meet the King or prime minister” as a soccer club owner, said Marc Tosca, a manager at Barcelona-based Batalla Juanola Group, which brokered Getafe’s sale.
The Spanish national team is the current world and European champion, while Barcelona won its third European Cup club title in six seasons in May.
Sheikh Abdullah bankrolled $79 million of offseason signings including striker Ruud van Nistelrooy, outspending Real Madrid. It’s the best team Malaga has ever had, according Manuel Peinado, a restaurant owner from Fuengirola who is president of a Malaga fan group.
“The Sheikh’s money is moving mountains,” Peinado, 62, said. Malaga is fourth in the 20-team top division after six games. It’s never finished higher than seventh.
On arriving, Sheikh Abdullah replaced bookmaker William Hill Plc (WMH) as jersey sponsor because gambling is banned under Islamic law. He replaced it with United Nations agency UNESCO. Royal Emirates plans to set up a pavilion about Arabic culture at Getafe’s stadium, Rafiq said.
“We do not have the attitude that we want to rule things,” Rafiq said. “We just want to learn things.”
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