Gulf investors eye Egypt’s sports market

Wednesday 05/08/2020
Egyptian club Pyramids FC. purchased by Turki al-Sheikh, head of Saudi Arabia’s General Entertainment Authority, then sold to Emirati businessman Salem Saeed Al Shamsi. (Pyramids FC facebook page)
Egyptian club Pyramids FC. purchased by Turki al-Sheikh, head of Saudi Arabia’s General Entertainment Authority, then sold to Emirati businessman Salem Saeed Al Shamsi. (Pyramids FC facebook page)

CAIRO – Sports investment has attracted Arab investors to Egypt, providing a needed boost to the North African country’s market.

Investors from Saudi Arabia and the UAE, along with Egyptian institutions, are fighting for the acquisition of a full or major share of Misr for Central Clearing, Depository and Registry (MCDR) and its sports arm El-Makasa Sport, which is involved in Egyptian Premier League competitions. It also holds a share in The Egyptian Company for Sports Equipment & Industry and seeks to establish a specialised factory for bicycles and sports equipment.

The move came after significant Saudi investment in the Egyptian sports sector, including the purchase by Turki al-Sheikh, head of Saudi Arabia’s General Entertainment Authority, of Egyptian club Pyramids FC. The club was later sold to Emirati businessman Salem Saeed Al Shamsi.

Saudi company Fanzir is also planning three investment projects in Egypt’s sports sector, as well as an app for the Egyptian Premier League that provides statistics, information and other services to fans. The company is also getting ready to launch a “Sports Cafe” project in Egypt in cooperation with the Ministry of Youth and Sports.

Egyptian Premier League Derby – Al Ahly vs Pyramids FC at Air Defence Stadium, Cairo, Egypt, last year. (Reuters)
Egyptian Premier League Derby – Al Ahly vs Pyramids FC at Air Defence Stadium, Cairo, Egypt, last year. (Reuters)

The kingdom’s “Green Goal” Company is also planning to launch a branch in Egypt.  The company provides services such as sportswear, sponsorships and advertisements and organises sporting events. It also offers a list of courses throughout the year to support development plans in the sports sector.

Yasser Amara, from New Castle for Investment Sports, said Arab investment in Egypt’s sport sector has been growing since 2018 after the introduction of a new sports law.

The law allowed the establishment of companies specialised in sports investment and marketing and allowed existing clubs to become specialised in sports investment.

He told The Arab Weekly that such investments exceed $30 billion worldwide annually, according to statistics published by FIFA.

He added Egypt has become an especially attractive target for Gulf sports investors after the success of Egyptian club Pyramids FC.

Such investments do not only include ticket sales or exclusive broadcasting rights, but also activities such as advertisement, clothing, sports equipment, conference preparation and club acquisition.

Experts expect major Saudi investment in the Egyptian sports sector after the kingdom’s sovereign wealth fund withdrew its bid to buy Newcastle United.

The sovereign wealth fund had offered $5 billion to acquire the English club, a sum that could now be invested in the Arab region.

Mohamed Sameh, an analyst at Arabia Investments Holding (AIH), said that several investors from Saudi Arabia, Kuwait, the UAE and Jordan, intend to establish sports clubs and football fields in Egypt, which does not have enough stadiums.

He explained to The Arab Weekly that there are two main ways to invest in the sector:, by striking a deal with government for free land in exchange for construction, or by purchasing the land outright so that it is fully owned by the club – which would be fully owned by the investor.

The second option revives the market through offering investors  shares in the clubs as French and English owners do.

He added that some Arab investors intend to establish a mega-sports city including football fields and squash and tennis courts.

Last year, Cairo launched the first sports investment fund in cooperation with the Ministry of Youth and Sports, Banque Misr, and Beltone Financial, to discover up-and-coming athletes and repair sports facilities. The project aims to collect $30 million.