The NBA, NHL and WNBA are poised to become the first North American professional sports leagues to receive investment from a sovereign wealth fund. The Qatari Investment Authority, the country’s sovereign wealth fund, is about to buy a stake in Monumental Sports and Entertainment, the parent company of the Washington Wizards, Washington Capitals and Washington Mystics, sources told The Athletic about the deal.
It’s a small operation, according to a person familiar with the matter. The deal valued Monumental at around $4 billion. Monumental’s portfolio also includes Capital One Arena and their new RSN, Monumental Sports Network.
“In November 2022, the NBA Board of Governors resolved to allow passive, non-controlling, minority investments in NBA teams by institutional investors, including university endowments, foreign and domestic pension funds, and sovereign wealth funds, subject to a number of policies adopted at the time,” NBA spokesman said Mike Bass in a statement to The Athletic. “All such investments require league review, NBA Board approval and policy compliance.
“The NBA Board of Directors is currently reviewing a potential investment by QIA in Monumental Sports & Entertainment, the parent company of the Washington Wizards, and other sports properties. In accordance with the policy, if approved, QIA would have a passive minority interest in the team without involvement in its operations or decision-making.”
Monumental Sports and Entertainment declined to comment to The Athletic.
This would be the first time a wealth fund representing another country’s government would invest directly in a team in the league.
The NBA changed its rules late last year to allow sovereign wealth funds to buy into its teams, expanding the circle of investors who can do so after opening the doors to private equity firms in 2020. Those funds can’t own more than 20 percent of a team, and for sovereign wealth funds, only one fund per country can buy into an NBA team and only own shares in a team, according to a source with knowledge of the league’s charter on the matter.
The WNBA follows the same rules for investing in sovereign wealth funds as the NBA.
The NHL has never ruled out investing in a sovereign wealth fund, a senior NHL source told The Athletic; They are permissible as long as the transaction is approved by the Board of Governors. A fund is limited to 20 percent of a team.
The changes were seen as a way for leagues to further increase the value of their teams. Ratings have skyrocketed over the past decade, especially for NBA teams. The Phoenix Suns sold for $4 billion in February. A 25 percent stake in the Milwaukee Bucks was sold in April at a price of $3.5 billion.
Commissioner Adam Silver shared his thoughts on government investment in the sport during an appearance on The Dan Patrick Show last Thursday when asked about the financial arrangement between the PGA Tour and the Saudi Arabian-owned Public Investment Fund the u. A merger of the tour and PIF’s own LIV Golf.
“When the Saudis invest in the sport, it gets a lot of attention,” Silver replied to a question about the merger. “I don’t want to complain about that because we want to attract a lot of attention. On the other hand, someone there could go through the list. They are investors in some of our largest American companies. Some of the most famous brands have investments from them. And I also think it’s a double-edged sword.
“I hear the comments about sports washing. On the other hand, you talk about it, others talk about it. … Likewise, the World Cup – the Soccer World Cup, Soccer World Cup – brought enormous attention to Qatar. I think people learn about these countries and what’s happening in the world in a way they wouldn’t otherwise learn. So I think the media is doing its job.
“But…speaking specifically about the NBA now that we’re such a global sport, I think people are a little too dismissive these days about the benefits that come from being together in sports. That in a sport like basketball – our finals are almost anywhere in the world, the sport is played all over the world – it’s an opportunity to bring people together.”
Qatar has been heavily involved in sport over the past decade. In 2012, another Qatari fund, Qatar Sports Investments, bought Paris Saint-Germain, a French football club which it has turned into a powerhouse. Last year, QSI bought a stake in SC Braga, a Portuguese soccer team. In January, the Financial Times reported that there was interest in buying an English Premier League team.
The 2022 World Cup took place in Qatar last winter. The competition took place amid controversy as FIFA hosted the event in a country where there are major human rights issues, homosexuality is illegal and where migrant labor was used to build the stadium. At least 500 workers have died in accidents at World Cup construction sites since 2014.
Monumental Sports is managed by Ted Leonsis, who has owned the Capitals since 1999 and the Wizards and their shared arena since 2010. Leonsis was reportedly pushing for NBA sovereign wealth funds to be allowed to buy shares in their teams, according to Sportico.
The Wizards had been plagued by mediocrity for decades and recently saw a change in leadership: Michael Winger was hired as the new president of Monumental Basketball and Will Dawkins was hired as the Wizards’ new general manager.
The Capitals won a Stanley Cup championship in 2018 under the guidance of star Alexander Ovechkin. They missed the playoffs this season and are in the midst of rebuilding.
The Mystics, led by two-time MVP Elena Delle Donne, have made the playoffs in five of the last six seasons and won the league title in 2019.
(Photo: Geoff Burke / USA Today)