The Business of Sports… Developing a Winning Mentality

Millions of dollars are pouring into sports infrastructure in the Middle East. Can staging high-level sporting events – and attracting international superstars to compete – provide the impetus needed to launch the region as a global superpower?

Something is happening out in the desert. Countries once focused on the economic opportunities presented by the region’s oil and gas reserves have now hit upon a way to strike gold in fields of a different sort – those of international sports. And make no mistake: the sports business is big business. Not only do such events bring in increased foreign money in terms of sponsorship and the tourist trade, they also serve to bring the region to the attention to a whole new audience and are helping to establish the Middle East as a go-to destination for sports of every kind. As a branding exercise, staging such events is a major coup.

No wonder local leaders are pouring millions of dollars into developing the infrastructure to support such high-profile tournaments. Dubai already plays host to a number of prestigious sporting events, such as golf’s Dubai Desert Classic, horseracing’s Dubai World Cup – the richest purse in international racing – and the Barclays Dubai Duty Free Tennis Championships, to name just a few. Qatar recently played host to the Asian Games in 2006 and narrowly missed out on making the final cut for the 2016 Olympics; not to be outdone, the country is now considering an audacious bid for the 2018 football world cup instead. And Bahrain is widely credited with bringing the lucrative Formula One roadshow to the region – something for which Abu Dhabi, currently constructing the world’s largest permanent Formula One circuit (rumoured to cost in the region of US1 billion) in readiness for hosting its own Grand Prix, can certainly be thankful for.

“ We want to establish Doha as a sports hub for the Middle East,” claims the Chair of Doha’s recent Olympic bid Hassan Ali Bin Ali, echoing a cry heard across the region as countries compete to attract the investment dollars and the TV audiences that will help play a major part in raising the profile of the Gulf region. “The vision is to bring sports to Dubai,” agrees Abdullah bin Suwaidan, Deputy Director of Dubai’s Tourism Department. “After all, what better way to get your name out as a brand than by showcasing your tiny country to hundreds of millions of viewers around the globe?”

Indeed, the business of hosting sports is proving so popular that entire cities are springing up out of the sand to cater for the increased demand. Take the US$8 billion Dubai Sports City development, for example, which claims to be the world’s first purpose-built sports city. Set on 50 million square feet of land within the Dubailand development, it will feature four world-class stadiums, be the venue for Ernie Els’ first golf course design in the Middle East, and host the first purpose-built Manchester United Soccer Schools facility in the world as well as the International Cricket Council’s own Global Cricket Academy, a David Lloyd Tennis Academy and the Butch Harmon School of Golf. In addition to the sporting facilities, Dubai Sports City will also boast all of the residential and commercial developments expected in a purpose-built city, including international schools, world-class medical facilities, hotels and leisure opportunities.

“Sport today is a multi-trillion dollar business, not only in terms of sponsorship, but also in terms of viewers,” explains U Balasubramaniam, Chief Executive of the development. “One of the great attractions of hosting such events is the increased tourism they bring into the region. I remember the first year Dubai hosted the international Rugby Sevens tournament, it only attracted around 7000 spectators; today, it brings in something like 50,000. People come from all over the world and make space in their calendars to come and watch this great spectacle. The same thing happens with tennis, and golf is another good example – over the five-day period of the Dubai Dessert Classic, we had something like 70,000 attend the event. The hotels benefit from it, the restaurants and other facilities benefit from it, tour operators benefit from it – there’s an elemental increase to the economic growth of Dubai through holding such events.”

And this is no short-term gold rush, either. Many believe the revenues generated in terms of increased tourism can provide a significant engine of economic growth for a region increasingly looking to diversify away from dependence on oil and gas. As such, considerable thought is going in to how to make such ventures sustainable in the long-term. “We want to create something that is active and robust the whole year round, not just for specific tournaments or events,” confirms Balasubramaniam. “As a result we’ve integrated our facilities within a living, thriving city to make sure they are utilised not only when the international events are being hosted, but also at other times of the year too.”

Hassan believes Qatar is taking a similar path. “What we want to do is really encourage our youth to take up sports, to concentrate on and develop their talent, and that will give us athletes from within Qatar and from within the region as a whole – which in turn will stimulate further interest in and growth of the sector,” he says, claiming that Doha’s recently rebranded Aspire Zone – formerly the Khalifa Sports City – plays an important socio-economic role . “ It is not just a world-class sport facility for big tournaments. It is a place for people to have fun whether they want to go for a jog, have a picnic, enjoy a fashion show, get entertained by a musical band or see top class athletes in action. It also has a sporting academy to bring through the next generation of local talent.”

It’s all part of the bigger picture – one that uses the raised global profile generated by sport as a springboard for socio-economic transformation. “Our visionary Emir, His Highness Sheikh Hamad Bin Khalifa, has sent the country on a monumental modernisation programme to become a role model for economic, social and political transformation in the region,” explains Hassan. “We have a plan for our infrastructure, our health, our education, and we are going to go ahead with it even though we have been unsuccessful in our bid to host the Olympics. Sporting events are a great way of raising the profile of the region and accelerating that development.”

There’s certainly no shortage of money available to help things move in the right direction. Emirates Airlines has seen its global sports marketing budget mushroom from US$6 million in 1999 to US$100 million in 2008, and Dubai Duty Free has been upping its sports sponsorship for years and in 2007 spent about US$17 million on tennis, golf and horseracing. Elsewhere, British bank Barclays has splurged US$9 million to become title sponsor of the renamed Barclays Dubai Duty Free Tennis Championships through 2010 – its biggest such deal in the region – while watchmaker Omega and CNN have both been co-sponsors of the Dubai Desert Classic golf tournament since 2004.

Such companies know that the eyes of the world are watching, a nd for the local economies this increased visibility also brings with it the promise of an increased influx of foreign investment as businesses witness firsthand the many benefits the region has to offer. “These events will show our culture to the wider world, and show that we are part of that wider world,” concludes Hassan. “They will show modern states bringing together people of all different religions, beliefs and backgrounds, creating dialogue, understanding and hope for the region. The opportunities are huge.”

US$100 million

Emirates’ 2008 sports marketing budget

Dubai Sports City

Total area: 50 million square feet

Stadiums: 60,000-seat multi-purpose outdoor stadium, a 25,000 capacity cricket stadium, a 10,000-seat multi-purpose indoor arena, and a field hockey venue for 5000 spectators

Retail space: 3.8 million square feet

Estimated cost: US$8 billion

Completion date: 2010