By Marie Demarque
The news sweeping the soccer world, especially in France: Superstar David Beckham has just signed a five-month contract with the Parisian club Paris St. Germain (PSG), which is owned by Qatar.
The story of Qatar and PSG starts two years ago when the Qatar Investment Authority (QIA) bought a 70 percent share of the club from the California-based Colony Capital Investment for an estimated $40-55 million. Since Qatar took over, the club has spent at least $340 million in new talent, recruiting such names as Lucas Moura, Zlatan Ibrahimovic, Thiago Silva, and of course, David Beckham.
PSG has had far from a blowout season, but it may be that Qatar has bought the club for more than just the beauty of sport. Hiring David Beckham is a good strategy for promoting Qatar. The "Spice Boy,” married to one of London’s renowned teeny-bop stars, Victoria, is famous around the world, especially in Asia—another important target in Qatar’s business plans.
This acquisition is also central to the national policy of Qatar, the QIA, a toy of the nation’s Crown Prince, is a sovereign wealth fund, and intent on building Qatar as a major sporting hub—winning the host spot for the 2022 football World Cup and hosting other international sporting events.
Qatar’s wealth is attributed largely to its oil and gas reserves. The country is smaller than Connecticut but its per capita GDP of $99,000 is the highest in the world according to the International Monetary Fund. Its foreign investments reached $20 billion in 2011 and $30 billion in 2012, according to QIA board member Hussein Al Abdullah. The strategy is designed to seek other sources of income than oil around the world.
Qatar has chosen three principal areas of investment—real estate, tourism, and sports, economic expert Nasser al Shafi told Al-Arabiya last July. And now, one more could be added—media.
Last month, Al-Jazeera bought Current TV, the American cable network launched by former Vice President Al Gore. Al-Jazeera was launched on November 1996 by Cheikh Hamad ben Khalifa Al Thani, the emir of Qatar, less as a profitable investment than as a means of shaping political discourse in the Middle East and beyond. A decade and a half later, the reach is impressive. Al Jazeera has become the most influential broadcast network in the Arab world. Its all-news and public affairs format reaches 40 million viewers from its base in Qatar. But, as noticed by Louay Bahry, "Al-Jazeera is mostly dependent on Qatari state financing (roughly $100 million annually)."
Current TV was founded in 2005 by Al Gore and Joel Hyatt. At the very beginning, the channel sought to be a balance against conservative TV media like Fox News. Current TV’s public is estimated to reach 60 to 100 million homes whereas Al-Jazeera in the United States until now just has an audience of 5 million. The estimated price of that transaction is between $400 and $500 million, nearly ten times the $60 million it paid Vivendi for a small cable operator News World International to launch Current eight years ago. Now, Al Jazeera’s Qatari owners want to enlarge its distribution network to compete more directly with CNN and other international broadcasters.
To reach this goal, Al Jazeera has already begun hiring some 300 Americans, gearing up for a launch later this year with five American editorial offices—Washington, New York, Chicago, Los Angeles, and Miami. Al Jazeera’s representatives have already announced that the U.S. version will “provide national and international news to the U.S. audience.” To justify its expanding scale, Al Jazeera points out that 40 percent of its online audience already comes from the United States.
But there are many hurdles ahead. Already one of Current TV’s principal cable partners—Time Warner—has announced it will cancel its agreement to carry Current or Al Jazeera in any of its cable systems, removing Al Jazeera in an instant from 12 million homes. Time Warner happens to be the owner of CNN.
Marie Demarque is an editorial assistant at World Policy Journal. Follow her on Twitter at @MarieDemarque
[Photo Courtesy to Omar Chatriwala]