Credit Suisse investor makes Monumental investment in NBA, NHL teams

When U.S. investors like Chicago-based Harris Associates started bailing from troubled Credit Suisse earlier this year, one giant global investor doubled its holdings to become the bank’s second-biggest shareholder after the Saudi National Bank.

That particular investment saw a UBS-backed rescue that came with a price tag of over quarter of a trillion francs of publicly backed loans and guarantees from the bank’s Alpine homeland. The deal saw UBS pay $3.2 billion for its smaller Swiss rival and become the undisputed global leader in managing money for the wealthy.

Following on from its Credit Suisse adventure, the Qatar Investment Authority, the prominent sovereign wealth fund, has acquired a stake in Monumental Sports and Entertainment, the owner of professional basketball and hockey teams in Washington, D.C. This marks the first time a sovereign wealth fund has invested in the U.S. sports industry.

The QIA is paying $200 million to secure a 5% stake in Monumental Sports and Entertainment. This deal values the company, which owns the NBA's Washington Wizards, the WNBA's Washington Mystics, and the NHL's Washington Capitals, at $4.05 billion. The transaction was confirmed by individuals familiar with the matter.

In recent years, Gulf states, including Qatar, have made substantial investments in various sports, ranging from golf and tennis to football. These investments not only aim to boost domestic tourism and entertainment sectors but also seek lucrative returns as the industry experiences rapid growth in media and broadcasting rights' value.

The QIA's investment comes less than a year after the NBA modified its bylaws to allow sovereign wealth funds to invest in clubs. By entering the U.S. sports market, the QIA is capitalizing on the enormous potential of the sector.

Monumental Sports and Entertainment, founded by former AOL vice chair Ted Leonsis, is more than just a sports team owner. It also encompasses esports teams, local television, and radio networks. In statements, the QIA highlighted the unique opportunities and growth potential offered by Monumental Sports and Entertainment's integrated sports and entertainment platform.

Qatar, known for being one of the largest exporters of liquefied natural gas and one of the world's wealthiest nations per capita, has been heavily involved in sports investments over the past two decades. The nation's hosting of the football World Cup last year served as a culmination of its extensive sports-related ventures. In addition, Qatar Sports Investments, a Qatari fund, has owned French football club Paris Saint-Germain since 2011.

Insiders familiar with the Monumental deal emphasized that the QIA's investment is primarily a financial transaction aimed at gaining exposure to a company with a diverse range of assets. It is worth noting that the QIA will not secure board representation through this transaction.

Saudi Arabia's Public Investment Fund, a sovereign wealth fund valued at $650 billion, has also made headlines in the sports world. The fund led a consortium that acquired English football club Newcastle United in 2021 and recently announced a framework deal to combine commercial interests with the PGA Tour in golf. Additionally, the Public Investment Fund is engaged in discussions regarding potential investments in men's professional tennis.

Overall, the QIA's foray into the U.S. sports market with its investment in Monumental Sports and Entertainment highlights the growing interest of sovereign wealth funds in the lucrative sports industry. It also demonstrates the continued globalization of sports investments, with Gulf states playing a prominent role in reshaping the landscape of professional sports as they diversify away from a reliance on traditional fossil fuel revenues.

Big investments by Middle Eastern backers in sport;