World Cup 2018 Lessons for the Arab Region

World Cup 2018 Lessons for the Arab Region
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Published July 30th, 2018 - 18:26 GMT via

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Egypt's Mohamed Salah
Egypt's Mohamed Salah

The excitement, enjoyment and spirit of competition that football evokes on a global scale is not only limited to fans and football enthusiasts. The sport registers considerable interest in the trading halls at stock exchanges and money markets, as well as in the corridors of fund management firms. Today, football contributes to a significant share of the GDP in several countries around the world, and is instrumental in paving the way for new investment avenues.

The highly anticipated FIFA World Cup 2018 brought with it some interesting surprises. These included the early dismissals of veteran teams, the emergence of new fan favorites, and the sharp peaking of market values of some players during the tournament, cementing their positions as assets to their clubs and national teams.

In recent days, arguably the most talked about player in the sports arena and markets around the globe is Cristiano Ronaldo, whose transfer deal from Real Madrid to Juventus FC amounted to over $100 million. Notably, Juventus managed to recover half of the sum paid to the player solely through the sale of 60 million branded jerseys that took place ahead of his first game with the club, according to estimates. Ticket sales during the new season also saw a sharp hike in prices due to the surge in demand.

These elevated figures will be amply compensated by direct taxes and fees entering the Italian treasury, as well as revenues from tourism, television rights and advertising, to name just a few sources. Other countries with prominent football leagues also enjoy similar benefits, including England, Spain, Germany and France.

Furthermore, the FIFA World Cup that was hosted by Russia this year, generated revenues of about US$13.5 billion, equivalent to 1 percent of the country's gross domestic product, according to a statement issued by the Russian Tourism Federation. Russian cities where the World Cup matches were held attracted about 5.7 million fans, half whom flew in from around the world. Sberbank of Russia has estimated that the total revenue generated by tourists during the FIFA World Cup 2018 is in the realm of US$5.1 billion.

Football has consolidated its place in the global arena as a highly lucrative sport that presents myriad options to investors. Given the considerable passion and influence for the sport in the Arab region, I believe we should capitalise on such opportunities to the extent possible.

There have been multiple successful investments made by Arab nations in some of the largest clubs in the world such as Manchester City, Paris Saint-Germain and others, as well as some creditable local examples of Arab countries that have seen the establishment of private sector clubs or the purchase of football teams playing in the English Premier League. However, dedicated initiatives to reap the potential that football can offer have not received the necessary legislative and investment attention in our region just yet.

On the upside, we have a lot of untapped potential to explore. However, this should be done parallelly, or better yet preceded by the issuance of relevant legislations and regulations that are necessary in order to adopt a professional approach when it comes to the transfer of players, the establishment or purchase of clubs, and the launch of football academies to harness young sporting talent in our countries.

We need to activate the decision to turn clubs into joint stock companies (private or public), to include successful companies in the financial markets, and to enable funds and portfolios to invest in such companies.

I am confident in the sporting talent and ability of our region. After all, international superstars such as Mohammed Salah, Riad Mahrez, Achraf Hakimi and Mehdi Benatia all hail from Arab countries. We have many more capable athletes waiting to be discovered.

However, we can only move forward in the arena of sport through leveraging a new and organised approach towards investments and talent that will strengthen our representation in football in the coming years.

By Mohammed Mahfoodh Al Ardhi

© Muscat Media Group

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