European football and its appeal soft power on oil and gas dependent countries.
The long history of European club football’s success is well documented, with some of the biggest clubs and leagues in the world. However, since the early 2000s, a new phenomenon has emerged: States dependent on oil and gas are investing money in European football, with the most notable players being Qatar, Russia and the United Arab Emirates (UAE). It’s a growing trend with Manchester City and the City group in the United Kingdom (UK), and QSI’s purchase of Paris Saint Germain (PSG) in France. This article discusses and examines why these states have used European football clubs in this way in recent decades. Oil and gas-dependent states are also more active in hosting sporting events globally, such as Russia and Qatar hosting the 2018 and 2022 FIFA World Cup and other sporting events in Europe and around the world.
Soft power and reputation
Political scientist Joseph Nye coined the term soft power. It is defined as “the ability to get what you want through attraction rather than coercion or payments.” Due to the power and cultural significance of football in Europe, involvement in football is an attractive way for many states to improve their reputation. States, like state-owned enterprises, can use it to cover up issues affecting them, such as human rights violations or a bad reputation on the international stage. This term is called ‘sports laundry’ and is closely related to soft power.
An example of this was when the Qataris bought PSG in 2012 through QSI, also known as Qatari Sports Investment, a Qatari government-run share sharing organization. PSG became dominant in France, winning eight of the last ten domestic league titles and regularly reaching the final stages of the Champions League. Despite this, they have faced negative media attention, especially regarding Qatar hosting the 2022 FIFA World Cup. There were several articles highlighting Qatar’s poor human rights record, especially regarding the workers’ rights and the treatment of the LGBTQ+ community in the country.
The UAE has also faced criticism over its ownership of Manchester City due to human rights issues in the country, which human rights groups have drawn attention to. Recently there have been protests surrounding the sponsorship of certain clubs linked to Qatar. An example of this was when Bayern Munich supporters raised concerns about human rights issues in Qatar and the club’s sponsorship by state airline Qatar Airways. In 2023, this led to Bayern Munich not renewing its sponsorship with Qatar Airways; it was suggested that these protests influenced the cancellation of this deal.
In addition, Qatar Airways has also sponsored KAS Eupen in Belgium, PSG and, in the past, FC Barcelona. Despite some of the adverse reputational risks associated with this type of investment, in the case of Qatar, due to the country’s size, it can be seen as a way to project power on the world stage and become part of a broader strategy. The Qatar 2030 vision, an economic and social plan to diversify the Qatari economy away from oil and gas and the use of state-funded companies and state-owned enterprises, is a crucial part of this strategy despite the reputational risks.
Similar techniques are used in the UAE. For example, the UAE has purchased 12 clubs worldwide, including ES Troyes AC in France, Girona FC in Spain, Lommel SK in Belgium and Palermo FC in Italy. This has led to criticism over potentially disrupted transfer activity and the ownership model’s treatment of smaller clubs as lesser partners, causing concern for UEFA and raising tensions between owners and fans. Under the Multi-Club ownership model, the same individual or ownership group owns two or more clubs; this can be either a majority or a minority interest. It is important to highlight that other companies or individuals from countries not dependent on oil and gas have used this ownership model. For example, American businessman John Textor owns four clubs worldwide through Eagle Football Holding Limited, three of which are in European football, in France, Belgium and the United Kingdom. Another example is Red Bull, which owns two clubs in Europe and sponsors a club in the United Kingdom.
Economic and economic diversification
The second point discussed has to do with economic diversification, a strategy in which a country’s economy shifts from one source of income to multiple sources of income. This is a particularly important topic for countries that rely heavily on oil and gas. This is due to a shift from oil and gas to renewable energy sources, related to the environmental damage oil and gas have caused and the depletion of oil and gas reserves. Diversification can be carried out directly by states through sovereign wealth funds, state-owned enterprises or individuals closely linked to the state. One of the suggestions of how this strategy can be used in the case of European football is to emphasize Gazprom. This “company” is majority owned by the Russian state and has used sponsorship deals with UEFA and football clubs such as Red Star Belgrade in Serbia and Schalke 04 in the Ruhr region of Germany before the Russian invasion of Ukraine in 2022. This sponsorship enables companies to delve into strategic markets.
This is remarkable in both cases; Before the invasion of Ukraine in 2022, Germany was an important customer because of the Nord Stream pipeline, a gas pipeline from Russia to Germany that runs under the Baltic Sea. The Ruhr area in Germany is an important industrial area in the country. Gazprom’s presence at Schalke, which is based in the city of Gelsenkirchen, gave them greater access to the local economy and projected a positive image of the company in the area. Since football is widely shown worldwide, this would also advertise a potential global brand to a large audience. This is similar to the case of Red Star Belgrade, one of the biggest clubs in the Balkans. Due to the popularity of Red Star and the close history between Russia and Serbia, Gazprom, and in parallel Russia, has consolidated itself in Serbian society; this strengthened Russian dominance in the market and despite the ongoing conflict in Ukraine, Red Star remained sponsored by Gazprom.
The solution
The EU and UEFA should promote or create a law similar to what is currently used in Germany and Sweden. The 50+1 rule means that 51% of the voting rights are given to club members to ensure that the fans’ voices are heard on crucial matters affecting the football clubs, such as ticket prices, stadium changes, home competition changes country and new sponsors for the club. The rule requires club member approval and provides a place for members to voice their opinions. This model also allows for private investment, but requires some form of approval by fans or the board. This solution would benefit the democratization of European football and protect its unique fan culture, arguably one of football’s greatest strengths.
Finally, the multi-club model should also come to an end. UEFA and national associations should impose a limit on the number of clubs that can be owned by the same owner. There have already been discussions about this within UEFA, as there have been cases of teams from the same ownership group playing in the same European competition. An example of this is RB Leipzig and RB Salzburg, both owned by Red Bull, who have played in the Champions League in the same season in recent years.
The most important aspects of the involvement of nation states or state-owned enterprises in European football have to do with soft powerimproving reputation and gaining access to new or existing markets. What soft power European football is seen as an effective tool that heavily gas-dependent countries use to strengthen their market ties or enter new markets. This is highlighted by Russia’s use of Gazprom in this area by sponsoring clubs (Red Star in Belgrade and Schalke in Germany) and sponsoring the UEFA Champions League until 2022.
The reputational aspect has proven more difficult due to increased media attention on the human rights issues of the sponsoring states and the participation in the multi-club ownership model. Despite this negative media attention, some clubs have achieved success on the pitch, most notably Manchester City and PSG, and being associated with this success can be seen as a reputation boost for the sponsoring states. Moreover, despite negative press coverage, the countries involved generally view European football and sport as a crucial part of economic diversification and as part of a broader government strategy. Finally, using Bayern Munich as an example, the solution outlined would give clubs and fans more control over these issues and allow European football to maintain its unique fan culture while remaining competitive in domestic and international competitions.
Matt has a keen interest in European affairs, particularly the EU’s approach to foreign policy and security issues and the role the EU can play in these areas. He has a master’s degree in political science from the Vrije Universiteit Amsterdam and a bachelor’s degree in politics and international relations.
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