NBA teams become investment target for Gulf sovereign wealth funds

Two of the world’s richest sovereign wealth funds are interested in buying minority stakes in National Basketball Association teams, according to people familiar with the matter, in the latest example of how oil money from the Gulf is pumping up values in global sports.

Executives at Abu Dhabi’s Mubadala Investment Co. and Qatar Investment Authority have expressed their interest in NBA ownership and are actively hunting for a possible match, said the people, who requested anonymity as the discussions are private.

Representatives for Mubadala and QIA declined to comment. A spokesperson for NBA did not respond in time for publication.

Mubadala and QIA’s interest is preliminary and there is no certainty that either will buy a stake in an NBA team, the people said.

The NBA is among the world’s most profitable leagues, and the value of its franchises has soared in recent years. In the most recent sale, billionaire Mat Ishbia agreed last year to buy more than 50 percent in the Phoenix Suns in a record deal that valued the club at $4 billion.

The prospect of NBA ownership became possible late last year after the league’s Board of Governors approved a rule change to allow sovereign wealth funds to buy as much as a 20 percent stake in teams. Previously, such funds could only do so through indirect exposure.

One target could be the New York Knicks. The team is owned by Madison Square Garden Sports Corp., which is controlled by the Dolan family.

MSGS’s biggest equity shareholder is investment firm Silver Lake Management, which has strong ties with Abu Dhabi, and is a co-investor in Premier League giant Manchester City.

Speaking on an earnings call this month, MSGS president David Hopkinson said the company was open to selling a minority stake in the Knicks.

Any international deal for an NBA team would face significant scrutiny and likely require a lengthy due diligence process before securing league approval.

The talks underscore the ambitions of Gulf states to use windfalls from recent high energy prices to buy into the world’s most prestigious sports leagues.

Gulf countries have been on a spending spree for marquee sports teams and events as their coffers have swelled. Saudi Arabia and Abu Dhabi each own an English Premier League football team, while Qatar holds stakes in Paris Saint-Germain and Portuguese team SC Braga.

Qatar spent an estimated $300 billion to host the 2022 FIFA World Cup, and this year the region will host four F1 races. Qatari investors are set to make an offer for Manchester United, Bloomberg News reported this week, citing unidentified people familiar with the plan.

Sheikh Tamim bin Hamad Al Thani, the ruling emir of Qatar, and Khaldoon Al Mubarak, the chief executive officer of Mubadala and an adviser to the Abu Dhabi royal family, are basketball fans, according to the people.

In October, Abu Dhabi hosted the first-ever NBA preseason games in the Middle East, as part of a push led by Al Mubarak’s brother Mohamed, who is chairman of the emirate’s Department of Culture and Tourism.

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