A few months after putting the Boston Celticscurrent champion of the NBA, the American basketball league, the main owner, Wyc Grousbeck, went to the Middle East to present the team to one of the biggest investors in the region.
The Celtics played preseason games in Abu Dhabi in October as part of the NBA’s third annual trip to the UAE capital. During the visit, Grousbeck met with Mubadala Investment, one of the country’s sovereign wealth funds, to discuss a possible investment, according to sources with knowledge of the matter.
While Mubadala has not yet decided whether to invest, Bloomberg reported last year that its executives are interested in stakes in the NBA. However, large Middle Eastern investors are reluctant to acquire passive stakes in teams at high valuations that do not offer management influence, according to people close to the matter. Sovereign wealth funds can own up to 20% of an NBA franchise.
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Persian Gulf investors as a viable option
With franchise values on the rise, professional team owners are increasingly turning to Persian Gulf sovereign wealth funds, which have the resources needed to buy significant stakes.
The Celtics, valued at $5.1 billion by Sportico, may need these investors more than others. Despite the success on the court, the team is expected to operate at a loss due to high payroll costs. Furthermore, the franchise does not have its own arena, an increasingly important revenue stream for investors.
Representatives for Mubadala and Celtics declined to comment.
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Last Thursday, the Celtics visited the White House and President Joe Biden to celebrate the title. After the event, Grousbeck told reporters that there was “a lot” of interest in the team.
NBA expansion in the Middle East
Grousbeck’s initiatives in the Middle East are part of a larger NBA effort in the region. The league has held discussions this year with Qatari sovereign investors, presenting a range of potential deals, including exhibition games in the country in stadiums built for the 2022 World Cup and media rights deals, according to sources.
The NBA is also considering opening a regional office in the Middle East, one of the few areas where it does not yet have a direct presence, the sources said.
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“We are exploring several options to expand our fan engagement efforts in the Gulf region, where there is growing interest in the NBA,” said league spokesman Mike Bass.
In mid-2023, the Qatar Investment Authority acquired a 5% stake in Monumental Sports & Entertainment, the holding company that controls the Washington Wizards.
In the United Arab Emirates, several recent sponsorship agreements reinforce the link with the NBA. Dubai-based Emirates Airline is the title sponsor of the NBA Cup, the regular season tournament that debuted last year. The New York Knicks uniforms feature patches promoting Abu Dhabi as a tourist destination.
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The NBA is seeking to renew its sponsorship deal with ADQ, an Abu Dhabi-based investment holding company, which expires this year. The chairman of the board of the Abu Dhabi Department of Culture and Tourism, Mohamed Khalifa Al Mubarak, is a long-time Lakers fan and the brother of Mubadala’s CEO.
Other franchises on the Middle East radar
There is speculation that the New York Knicks could be the next NBA team to attract investment from the Middle East. The team is controlled by Madison Square Garden Sports Corp., run by the Dolan family. One of MSGS’s largest shareholders is Silver Lake Management, an investment firm with strong ties to Abu Dhabi’s Sheikh Mansour Bin Zayed Al Nahyan and a co-investor with him in Premier League giants Manchester City.
In an earnings call last year, David Hopkinson, then president of MSGS, said the company would be open to selling a minority stake in the Knicks.
In October, James Dolan’s Sphere Entertainment — the company behind the $2.3 billion Sphere in Las Vegas — announced a deal to build its second arena, this time in Abu Dhabi.
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