Foreign Fund to Invest in DC Sports Teams

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The Qatar Investment Authority, the sovereign fund of the small Arab Gulf state, is finalizing an offer to purchase a minority stake in DC Sports teams, CNBC reports.

The deal would concern Monumental Sports & Entertainment, the holding company that owns half of DC’s top sports teams. Those include the NBA’s Wizards, NHL Capitals and WNBA’s Mystics.

The NBA in November began to allow sovereign wealth funds and other institutional investors to buy noncontrolling stakes in the league’s teams. Under a new policy, a foreign fund can buy up to 20% of an NBA team.

Sovereign funds are official government funds that invest budget surpluses in equities. In the United States, Alaska has the largest of such funds which it collects from oil and mineral rights. In turn, it distributes the proceeds to its citizens. Federal Social Security, however, is banned from investing in the market and can only purchase low yield treasury assets.

Nations with a large state involvement in the economy, such as China or France, have large sovereign funds that can be leveraged for diplomatic purposes. Oil-rich nations, such as Qatar or Saudi Arabia, invest their proceeds in foreign companies to supplement their budgets.

Qatar Investment Authority has been investing in or purchasing many top brands across all industries. It purchased the Paris Saint-Germain soccer club in 2012, which had the two top soccer players in the 2022 World Cup – Messi and M’Bappé. It has also invested heavily in China, Russia, Britain, and Europe more broadly.

Adding to its recent hosting of the Soccer World Cup, this move solidifies Qatar as a major player in commercial sports, which it uses as a soft power vehicle to project its influence around the world.


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