Wednesday, September 03, 2008

Abu Dhabi's purchase of Manchester City

As seen by the New York Times
There is a game within a game going on. Before oil was discovered in the United Arab Emirates in 1958, the families ruling the kingdoms of Abu Dhabi and Dubai — the Nahyans and the Maktoums — amused themselves with competitive falconry. They still do falconry, and the families today are somewhat intermarried, but in recent years Abu Dhabi has felt overshadowed by the more entrepreneurial and flamboyant rulers of Dubai, who have turned it into a Middle Eastern mecca for global business.

Despite commanding more than 9 percent of the world’s oil supply, Abu Dhabi has sometimes seemed jealous of Dubai’s ability to draw attention to itself, in part by creating a hub in the Middle East for prestigious sporting events.

As the Emirates get richer, Western entrepreneurs who bought into the British soccer league on the expectation of making money are finding that they cannot keep up. That is why most experts in the field say that it is only a matter of time before the American sports entrepreneurs who control Liverpool, Tom Hicks, who owns the Texas Rangers, and George N. Gillett Jr., owner of the Montreal Canadiens of the National Hockey League, cut their losses and sell the club to the persistent bidders from Dubai.

As for Abu Dhabi, it accrues a yearly cash surplus exceeding $50 billion. Its sovereign economic fund, the Abu Dhabi United Group, is, by most outside estimates, worth a trillion dollars, and rising. It has a 7 percent stake in Citigroup. It invests in Ferrari and General Motors. And among its other projects is a new campus opening in 2010 that will become a branch of New York University and a $1 billion museum modeled on the Louvre in Paris.

It is debatable that none of those achieved the same global headlines as the takeover of Manchester City, and hours later the team’s signing of Robinho, a Brazilian world star from Real Madrid, for 32.5 million pounds ($58.6 million).


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