The Washington Wizards took on lots of salary this week. They also took on a deep-pocketed partner.
The Qatar Investment Authority is buying a minority stake in Washington Wizards and Capitals parent Monumental Sports & Entertainment— Sportico (@Sportico) June 22, 2023
It marks the first time a sovereign fund has invested in major U.S. team sports. pic.twitter.com/mkVyyHfJSh
Qatar continues its commitment to high-level sports by purchasing a stake in Monumental Sports & Entertainment. That's the parent company of the Washington Wizards, the Mystics of the WNBA and the Capitals of the NHL. According to reports, it's a five percent interest in the company at a $4 billion valuation.
It's the first time a state-owned investment fund has bought into an NBA franchise, after the the league decided last November to allow "passive, non-controlling, minority investments in NBA teams by institutional investors." That means pension funds and sovereign wealth funds, like the Qatar Investment authority, can buy into NBA teams as long as they don't have decision-making authority.
Qatar has been slowly becoming a player in international sports, hosting the FIFA World Cup last fall. Qatar Sports Investments has owned French football club Paris Saint-Germain for the last decade and recently purchased Portuguese club Braga.
Now they've bought into the NBA just ahead of the Basketball World Cup, which Qatar will host in 2027. The deal gives the Middle East nation another entry in American business in the nation's capital, as well as boosting the country's basketball credentials leading up to the tournament. Meanwhile, the Wizards get a huge infusion of cash ahead of NBA free agency.
The NBA is holding preseason games in the United Arab Emirates for the second straight year, sending Luka Doncic and the Dallas Mavericks to play the Minnesota Timberwolves. It's part of their attempt to move into Middle Eastern markets - and attract deep-pocketed Middle Eastern investors.
When reporters asked Adam Silver about the UAE's criminalization of homosexuality and its spotty human rights record, the NBA commissioner called it a "fair question" before invoking Nelson Mandela.
"We continue to believe that using sports, using basketball, we can improve people’s lives through sport," Silver said. "And that, as Nelson Mandela famously said, sport can change the world."
Can sport truly change the world? Perhaps, but we think the NBA is really betting that hundreds of millions of dollars can change their owners' bank accounts.