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Qatar sovereign wealth fund to acquire minority stake in Wizards, Capitals and Mystics

anthony gharib, usa today
·4 min read

The Qatari Investment Authority is nearing a minority investment in Monumental Sports and Entertainment, which owns Washington's Capitals, Wizards and Mystics, the NBA told USA TODAY on Thursday.

It is believed to be the first time the government of Qatar has invested in any major U.S. sports team. Sportico first reported the transaction, saying it is the first time any sovereign wealth fund has bought into ownership of an American team.

According to reports, the Qatari Investment Authority will acquire a 5% minority stake as part of a $4.05 billion deal,

The purchase is still pending board approvals in each league, according to The Athletic. In November 2022, the NBA Board of Governors permitted "passive, non-controlling, minority investments" by a variety of investors, one of which included sovereign wealth funds.

“The NBA Board is currently reviewing a potential investment by QIA in Monumental Sports & Entertainment, the parent company of the Washington Wizards, among other sports properties," NBA chief communications officer Mike Bass said. "In accordance with the policy, if approved, QIA would have a passive, minority investment in the team, with no involvement in its operations or decision-making.”

FILE - An exterior view of Capital One Arena is seen Saturday, March 16, 2019, in Washington. Capital One Arena is home to the Washington Capitals NHL hockey team and Washington Wizards NBA basketball team. A person with knowledge of the sale tells The Associated Press the Qatar Investment Authority is buying a 5% stake of the parent company of the NBA's Washington Wizards and NHL's Washington Capitals for $4.05 billion. It is believed to be the first time the government of Qatar is investing in North American professional sports. (AP Photo/Nick Wass) ORG XMIT: NY158

The NBA began allowing private equity investments in 2020. Those firms can only acquire up to 20% of a single franchise and are limited to investing in no more than five franchises. According to The Athletic, only one sovereign wealth fund per country is allowed to invest in an NBA team and it cannot own a share in more than one team.

The PGA Tour announced a merger with LIV Golf, which is backed by The Public Investment Fund, the sovereign investment fund of the Saudi government, on June 6.

A Saudi owned NFL team? LIV Golf, PGA Tour merger could signal large Saudi presence in American sports

While on the Dan Patrick Show after the PGA-LIV Golf merger, NBA Commissioner Adam Silver was asked about his thoughts on a potential investment from the Saudis.

"I hear the comments about sports washing. On the other hand, you're talking about it, others are talking about it. … In the same way the World Cup - the football World Cup, soccer World Cup - brought enormous attention to Qatar. I think people learn about these countries, learn about what's happening in the world in ways they otherwise wouldn't. So I think the media does its job," Silver said. "But … now talking specifically about the NBA, where we're such a global sport, I think people are a little too dismissive these days about the benefits that come from the commonality around sports."

The Qataris and various sovereign firms are already heavily involved in sports across the world.

The Middle Eastern country last year hosted soccer’s World Cup for the first time, helping FIFA reach a record revenue level because of booming ticket and hospitality sales. Qatar Sports Investments became the primary owner of French soccer club Paris Saint-Germain in 2011. The same group agreed in October to buy a 22% stake in Portuguese club Braga. Saudi Arabia's Public Investment Firm bought English soccer club Newcastle United in 2021.

An expert in such transactions said sports are part of Qatar’s nation-branding and public diplomacy strategy and that this move aligns with that approach.

“Part of that strategy includes purchasing, sponsoring or buying equity in international sports organizations in Western markets, especially in central cities,” said Dr. Yoav Dubinsky, Instructor of Sports Business in the Lundquist College of Business at the University of Oregon. “From a political standpoint, it means further legitimizing Qatar as a business partner in the West, including in the heart of American politics.”

Dubinsky added in an email to the AP that the size of the stake would likely limit the impact Qatar can have on the teams, unlike the control of Paris Saint-Germain. That would fit with the NBA’s definition of a passive, minority investment.

Ted Leonsis, who has owned the Capitals since 1999 and been majority owner of the Wizards since 2010, is the founder, managing partner and CEO of Monumental. The company lists 20 other partners on its website, including Laurene Powell Jobs and Washington Nationals owner Mark Lerner.

Monumental also owns the Capital City Go-Go of the NBA G League and Capital One Arena in Washington and recently took over the media outlet formerly known as NBC Sports Washington, now Monumental Sports Network.

Contributing: The Associated Press

This article originally appeared on USA TODAY: Qatar sovereign wealth fund to invest in Wizards, Capitals, Mystics