March 13, 2011
Qatar's successful Fifa World Cup 2022 bid and the Middle East's dismal performance in this year's Asian Cup has sparked a growing awareness that the creation of a proper football industry could be the key to unlocking an economic opportunity.
In a first step, Middle Eastern nations have rushed to partner prominent European clubs such as Real Madrid, Inter Milan and Arsenal to open schools that will nurture football talent at a young age. The schools allow the region's governments to counter criticism that their failure to encourage professionalisation and creation of value is a major reason why Middle Eastern teams, who accounted for half the Asian Cup competitors, failed to make it past the quarter-finals.
Sayyid Khalid al Busaidy, the Oman Football Association chairman, last month went a step further by announcing that football clubs would be licensed by 2013 in an effort to professionalise the sport.
"Something is moving," says Santino Saguto, an Italian soccer management consultant based in Dubai. "Qatar 2022 has prompted the region to discuss ways to create value. The leagues, the football associations and the media are starting to buy into the concept. That's how it started in Europe."
The UAE took a first step a few years ago when for the first time it marketed the rights to broadcast its league matches - a key step in generating revenue and creating value. The UAE example is reportedly about to be followed by Saudi Arabia, the region's most important league beyond Egypt.
However, the UAE's blazing of the trail is not without its birth pangs. Commercial broadcasters charge that state-owned networks distort competition by paying exorbitant amounts for the exclusive right to broadcast major football events. They point to Al Jazeera's clinching last month of the right to broadcast the 2018 and 2022 Fifa World Cups for an undisclosed amount believed to be in excess of US$3 billion (Dh11.01bn). Abu Dhabi Media Company, the owner and publisher ofThe National, was last year awarded the exclusive rights to air the English Premier League in the UAE.
Some analysts argue it may take a strong-willed broadcaster to shape a market that is still dominated by free-to-air channels, slow in the uptake of pay-TV and suffering from large-scale intellectual copy piracy. "It was the same in Europe until BSkyB forced issues with the introduction of its decoders," Mr Saguto says, cautioning it took BSkyB several years to break even on its investment.
Rupert Murdoch, the media baron on the verge of acquiring BSkyB and backed by his alliance with Saudi Arabia's Rotana, owned by the Saudi billionaire Prince Alwaleed bin Talal bin Abdulaziz Al Saud, could drive the change needed in the Middle East to create value in football. Manchester United's pioneering success in creating value on and off the pitch is one asset Qatar had hoped to gain control of with its failed bid to acquire the English Premier League club.
The wave of anti-government protests in the Mena region is likely to propel professionalisation forward. The first football club boards in Egypt and Tunisia have been forced to resign by protesters demanding greater transparency. Senior football and club officials in Egypt are under investigation for corruption. Fans are demanding the resignation of politically incorrect managers who supported the ousted president Hosni Mubarak during the anti-government protests.
Economic pressure has forced the Egyptian Football Association (EFA) to impose its first austerity measures, with the announcement of salary cuts for its employees. The EFA's call for a cap on transfer pricing and salaries for players and coaches is meeting fierce resistance. The financial squeeze, however, is likely to increase pressure not only for the privatisation of clubs owned by the government and the military, but also for modern branding, marketing and merchandising strategies.
A politically more liberal and economically more transparent Middle East would enable clubs in the region to capitalise on satellite television, the internet and migration to access fans far beyond their traditional home markets. Tehran's Persepolis is already Asia's most popular club; Cairo's Al Ahly SC boasts a fan base of 50 million in Egypt alone. Both clubs are well positioned if correctly structured and branded to compete with European clubs in tapping markets in China, Japan and India as well as the Middle East and to a lesser degree North America.
To do so, they will have to adapt to a world in which loyalty no longer is a zero sum game and fans can support various clubs for different reasons at the same time. Like their European counterparts, Middle Eastern clubs will increasingly realise their brand is their most enduring asset, far more enduring than players, coaches or a winning streak. Building and managing that brand rather than politicking will become their paramount interest.
James M. Dorsey, a senior research fellow at the National University of Singapore's Middle East Institute, is the author of The Turbulent World of Middle East Soccer blog