From being a mere source of recreation, sports first graduated to a business status when corporate houses began tapping its mass appeal through sponsorships and advertisements. It has now gone a step ahead to acquire a new dimension by becoming a major component of the Gulf economic diversification plan. With the Gulf Cooperation Council (GCC) countries already hosting a number of world-class sporting events and with more in the pipeline, their effort to harness their new interest in non-oil economies should certainly get a boost.
In a milieu where sport is becoming a tool for leaders in the region to reposition their countries on the world map, Qatar is dressed to host the 15th Asian Games from Dec. 1-15. The GCC country is the first Arab Middle Eastern country to host the event represented by 45 countries comprising about two-thirds of the world’s population and 40 sports.
With a budget outlay of $2.8 billion, the Qatari leadership has invested heavily in this vision. Just the preparations, by way of construction and renovation, have cost the country almost $1 billion. The games will benefit the future economic development of Qatar, especially the construction, hospitality, travel and tourism sectors. By the start of the Asian Games, about 1,000 additional hotel rooms are likely to be added to the 2,600 currently available. This is in addition to the 20 percent expansion in Qatar’s residential stock.
With an estimated three billion people expected to tune in to watch the coverage, sponsorships are bound to rake in megabucks, as was the case with the Emirates Airlines approach during the FIFA World Cup in Germany earlier this year. In a humungous public relations exercise, Dubai’s flag carrier signed a record $195 million deal to be recognized as one of the 15 “official partners”. Among other things, the Emirates logo was prominently seen by viewers, clocking in an estimated 49 billion hours of TV time throughout the month.
In other airline deals with football clubs, while Abu Dhabi’s Etihad Airways and Qatar Airways failed to sign a shirt sponsorship deal with Manchester United recently, Emirates four-year sponsorship of the English Premier League outfit Chelsea culminated with the team winning the league championship for the first time in five decades in May 2005. The deal gave Emirates vast television exposure, through its shirt branding and stadium advertising. Next, Emirates entered into a $180-million tie-up with Arsenal, which includes renaming the Ashburton Grove stadium as Emirates Stadium.
The Gulf Air Bahrain Grand Prix in April 2004 was a landmark sporting event in the region — the first time that a Formula One event was staged in the Middle East. The Bahrain International Circuit in Manama cost nearly $200 million. Such were the stakes involved with the event that the government raised $500 million in 2003 for several projects, including the racetrack. The success of the event encouraged the organizers to announce a $1-billion expansion plan that included hotels and tourism complexes.
Close on Bahrain’s heels is the plan for the Dubai Autodrome and Business Park — which is expected to bring the top names in the global racing circuits to the emirate. Dubai has also tapped a new scheme under the A1 Grand Prix model, in which teams representing each participating country will buy franchises for between $5 million-$150 million to race one of the 30 3.5-liter cars designed by Lola Cars International of the UK.
Among the other high-profile events that the region has been hosting are the Dubai Desert Classic — a part of the premier Professional Golf Association tour — with a prize money of $2 million and attracting the world’s best players and the media fraternity; the $1.6-million Dubai Tennis Championship and the $1.5-million Qatar ExxonMobil Open for men and the Qatar TotalFinaElf Open for women, all approved by the Association of Tennis Players and the Women’s Tennis Association; International Rugby Board Sevens; and the Dubai World Cup, offering a total prize money of $15.25 million and featuring the world’s richest horse race — Dubai’s Godolphin stable now dominates international horse racing around the world.
The 1999 Bowling World Cup Championship and the 2003 FIFA Youth World Cup were held in the UAE. Other events that have become a regular feature on the UAE sporting calendar are the World Endurance Race and the Formula One Power Boat Championship.
While cricket in the Middle East became synonymous with the Sharjah’s Cricketers Benefit Fund Scheme series, Abu Dhabi also has a multi-million dollar cricket stadium that hosted international fixtures this year. Given the Gulf’s reputation as a tax haven, the International Cricket Council has shifted its headquarters from London to Dubai. Apart from the millions involved in the various tournaments organized for cricket fans, who are mostly expatriates, the business has expanded to give birth to Ten Sports — a product of Taj Television Ltd., the Dubai Media City-based company targeting millions of homes, mostly in the region and Indian subcontinent.
Such has been the enthusiasm for sports and the economic spin-offs it promises that Dubai is building a $3-billion Dubai Sports City, covering approximately 50 million square feet and featuring state-of-the-art stadiums and world-class sporting academies, schools, shops, restaurants, hotels, a hospital and other essential services and facilities. The city consists of a 60,000-seat outdoor stadium, a 25,000-seat cricket stadium, a 10,000-seat indoor arena, a 5,000-10,000-seat field hockey and athletics venue, an Els-designed golf course, a Butch Harmon golf academy, the first Manchester United soccer school outside Europe, and a David Lloyd tennis school, among others.
Apart from the local governments being ready to attract investments and hosting the events for international mileage, part of the shift in sporting destinations is being attributed to strict rules against tobacco advertising in Europe and North America.
Not one to miss out any investments, regional governments are quickly grabbing the opportunities. Doha announced an interest in September to bid for the right to host the 2016 Olympic Games, bringing it into direct competition with Dubai and 11 other cities around the world, which have also expressed interest in hosting the world’s biggest sporting spectacle.
The chief beneficiaries of all these sporting activities are the tourism, construction and services sectors. Airlines, hotels, all types of leasing apartments, advertising firms and car rental agencies experience the spillover effect. The infrastructural projects that result from these developments keep the economy ticking and vibrant. They also have a robust impact on the GDP growth rates in the region, apart from generating job opportunities, especially as unemployment has become a serious concern to the regional governments.
The presence of topnotch sportspersons not only puts the regional countries on the world tourism map, but also serves as good advertisement vouching for a stable environment — a crucial criterion for tourists and investors alike.
Some conservatives, however, have voiced their concerns over the adverse effects of hosting these events, but they ought to realize that in an age of globalization, artificial barriers would not be able to hinder alien culture from filtering into the regional societies. Given the economic windfall, they should take the developments sportingly.
(Dr. N. Janardhan is the program manager of Gulf-Asia Relations and the editor of “Gulf in the Media” at the Gulf Research Center in Dubai.)