Rumoured Saudi Arabian purchase of Manchester denies global political realities

Professor Simon Chadwick

Posted: October 17, 2018

Over the last week, the rumour ‘Saudi Arabia to buy Manchester United’ has been circulating, fuelled by a British national newspaper (and subsequent reporting via other media outlets) as well as social media.

Three weeks ago, the same story was also being told, then with a different United (Newcastle) serving as the focus of rumours about the Kingdom of Saudi Arabia’s (KSA) club of choice.

Newcastle United also appeared in similar stories this time last year, causing a frenzy amongst stakeholders that government in Riyadh was about to buy the Magpies from the existing (and much maligned) owner, Mike Ashley.

The deal never materialised, and we should all learn something from this: firstly, that rumours are infectious, sometimes in an unhealthy way. Fans and observers of Manchester United (and, for that matter, Newcastle United) should therefore calm themselves, keep an eye on the global politics pages of international news outlets, and reserve judgement on what happens next.

The second thing we should all do is ask ourselves: from where did the rumour originate and why did this outlet (or person) start it?  Britain’s Daily Star is hardly the most reputable outlet for accurate news reporting, hence accepting such stories at face value is not recommended.

Indeed, several Twitter threads posted over recent days provide some indication of the possible motives for the Daily Star breaking the Manchester United story. Nowadays, acquisitions of overseas football clubs are neither vanity purchases nor the whim of ardent fans. Instead, they are either considered business investments and/or are linked to political strategy.

We should know this by now; after all, it is little more than a year ago that the same kind of hype now surrounding the KSA was previously a characteristic of Chinese investment in European football clubs. China’s dalliances with the likes of AC Milan and Atletico Madrid came and went, as will Riyadh’s presumed interests in the sport.

Significantly however, China’s interests in football were (and still are) similar to Saudi Arabia’s: part of a national strategy aimed at building the country’s domestic sport economy, building the nation’s brand, boosting profile, generating soft power and diplomatic influence, whilst addressing all manner of domestic socio-cultural matters (such as the need to increase sports participation and improve public health).

As with China (and its ‘China first’ policy), the KSA’s sports strategy is founded upon the principle of strengthening domestic sport, rather than investing heavily in overseas sports assets. For instance, some of the Saudi Arabia’s most popular football clubs already have large fan bases and draw significant crowds to games (in the case of Al-Ittihad, this means an average home attendance of around 45,000).

With these foundations in place, the KSA has embarked upon a process of privatising its own leading football clubs. This has already seen significant investment being drawn in from domestic sources, for example last year the Kingdom Holding Company signed a major shirt sponsorship deal with Al-Hilal. The lesson to be learnt from this is that Saudi Arabia believes its clubs can compete with the most popular in the world.

The basis of KSA’s ‘Saudi first’ policy in sport can be seen in many of the major developments now taking place in the country. The government is spending heavily on the construction of a new sports and entertainment city – Qiddiya– which will be one of the largest such developments in the world.

At the same time, the KSA has been aggressively pursuing the rights to stage sports contests, which is part of a strategy to position the country as a sport event destination. Formula E will stage a race at a circuit in Ad Diriyah during December. And there is also a growing number of combat sports now staging bouts in Saudi Arabia. For instance, in 2017 WWE signed a ten-year deal with Saudi Arabia (although this could be in danger following recent developments).

Whilst investments in overseas sports assets should not necessarily be dismissed in the future, for the time-being the KSA appears keener on investing in its own domestic sports assets, rather than someone else’s.

This internal focus is highly reminiscent of what has happened in China over the last four years. Following a period of intense western hype and, indeed, corporate avarice, government in Beijing retrenched from aggressive overseas spending switching instead to the cultivation of its own domestic assets.

As is the case in China but is also been evident in countries such as Qatar and Abu Dhabi, sports strategies in Asian nations are driven by the state and characterised by a strong central planning model. Such countries are not liberal western democracies where sports decision-making is essentially within the domain of private sector organisations (accompanied by limited state intervention).

This means that a country’s rulers (in the case of KSA, Prince Mohammed) are the supreme decision-making authority, which can sometimes have serious consequences both for individuals and organisations that engage in activities deemed by government not to be in the national interest.

Several leading figures from China’s sport industry have disappeared following their failure to comply with the country’s view of how its sport should develop. And with the recent disappearance of Saudi Arabian journalist Jamal Khashoggi, one gets the clear sense that dissenting voices and rogue investors from within the KSA would be best advised not to go shopping for an overseas football club.

If a bid for United (Manchester, Newcastle, Colchester, or otherwise) is ever to become a reality, one therefore predicts that it will come from a Saudi Arabian state investment vehicle. This is exactly the same approach that has been used by Abu Dhabi (in acquiring Manchester City) and by Qatar (in purchasing Paris Saint Germain).

At the moment, for the reasons stated above, there is little evidence that Saudi Arabia’s investment authorities are in the market to buy an overseas club. It seems very early in the country’s strategic planning cycle for it to become engaged in an overseas spending spree, especially when it needs to get its domestic house in order first.

Add to which global public opinion has recently yet swiftly turned against the KSA, which means that government in Riyadh has other, more serious matters to address than becoming embroiled in a high-profile pursuit of a European football club. One suspects too that stakeholders at whichever United is in vogue will not want the fallout of dealing with KSA investors, at least for the time-being.

‘Saudi Arabia to buy Manchester United’ is a great rumour: one of the world’s richest countries seeking to buy one of the world’s richest football clubs, it is as though there is a natural alignment between the two. But in this instance, the club acquisition is not the story, it is the rumour itself that is the big news. Someone or something is playing games, which begs the questions: by whom, for what purpose and with what intended outcomes?

 

About Professor Simon Chadwick

Simon is Professor of Sports Enterprise at Salford University in Manchester (UK), where he is also a Co-Director of the Centre for Sports Business. He is also a Founding Co-Director of the China Soccer Observatory and a Senior Fellow of the China Policy Institute at the University of Nottingham (UK). He has worked in football across the world, for various organisations including companies, federations, and governments. He tweets via @Prof_Chadwick