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Last Updated : Jun 06, 2011 04:42 PM IST | Source: Reuters

PSG purchase to boost Qatar brand ahead of World Cup

Qatar's takeover of French soccer club Paris St Germain is aimed at cementing the gas exporter's links with the sport and help prepare it for hosting the 2022 World Cup, whose award remains mired in controversy.

Qatar's takeover of French soccer club Paris St Germain is aimed at cementing the gas exporter's links with the sport and help prepare it for hosting the 2022 World Cup, whose award remains mired in controversy.

State-run Qatar Sports Investments - established in 2005 by son of the Emir and heir to the Qatari throne Sheikh Tamim Bin Hamad Al Thani - has bought a 70% stake in PSG.

This follows a Qatari purchase of Spanish side Malaga and Qatar's record-breaking shirt sponsorship deal with European champions Barcelona. These amount to small change for Qatar, whose copious natural gas reserves have made it the world's richest country per-capita.

"In terms of boosting the country's 'brand recognition,' football is second to none. Its immense popularity and saturated coverage on TV is worth a fortune," said David Roberts, deputy director of the Royal United Services Institute based in Doha.

The acquisition was partly to provide knowledge transfer ahead of the 2022 tournament, a source close to the deal said, speaking on condition of anonymity.

"They're buying expertise as much as anything," said the source. "And very often these are property plays. You'll find the premises around it are worth more than the actual club."

Parc des Princes, PSG's home ground, lies in Paris' upmarket sixteenth arrondissement near the Bois de Boulogne. France built a new national stadium, Stade de France, for the 1998 World Cup.

Qatar won the rights to host the 2022 event, but last week the head of Germany's soccer federation called for soccer governing body FIFA to re-examine the award amid allegations Qatar had bought the event. The Gulf state has strenuously denied any wrong-doing.


PSG is viewed as a slumbering giant. Unlike top English teams that can count on their stadiums being near-full every game, PSG's supporters are more fickle, with attendances averaging 62% of the 47,400 capacity at Parc des Princes last season.

But as the only major football club in a capital city - in comparison to London's five Premier League sides - its potential local audience is enormous, although PSG has long been dogged by hooliganism.

Fans are notorious for fighting, not only opposition supporters, but among themselves, with some supporter groups disbanded in 2010 after a fan died during clashes.

"Though PSG has not seen much success of late, were Qatar able to offer them the funds to keep their best players and buy new ones - especially in the French league which is typically more of a 'selling' league - there is significant potential," Roberts said.

PSG finished fourth in Ligue 1 this season, with coach Antoine Kombouare leading the team to their highest finish since 2004, but four points short of qualifying for the lucrative Champions League, Europe's elite club competition.

Their squad for the recently concluded season featured a mix of young players and ageing greats such as former Real Madrid and Chelsea midfielder Claude Makelele and ex-Barcelona winger Ludovic Giuly.

The PSG move is not the tiny Gulf state's first foray into sports-related acquisitions. Last year, Qatari royal family member Sheik Abdullah Al Thani bought Spanish football club Malaga for 36 million euros (USD 51,43 million).

Still, despite the controlling stakes in PSG and Malaga, Qatar has yet to enter Europe's football elite. Few would bet on Malaga ending Barcelona and Real Madrid's stranglehold on La Liga, while the French championship has little of the lustre of England's Premier League.

The sport sector has long been a target for Gulf sovereign funds. In 2008, an arm of Abu Dhabi's sovereign fund bought English Premier League side Manchester City.

"It's important for Qatar to show spectacular capability in hosting the World Cup," said Sara Bazoobandi, analyst at Nomura International based in London.

"And with the region suffering from obesity and diabetes even amongst the younger generation, it has been the states' policy to encourage sport in their home countries. Abu Dhabi clearly mentioned this as one of the Manchester City deal's incentives.

"Everybody back then thought it was an unnecessary move for Abu Dhabi. Now, as host of the World Cup, Qatar has many motivations to buy football clubs. I wouldn't be surprised if they become active in other companies in the sector, even if they buy into Nike or Adidas."

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First Published on Jun 6, 2011 04:30 pm
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