Money, Influence and the True Appeal of Football
May 22, 2023
Pauls Miklasevics
Chief Investment Officer (CIO) at BluOr Bank
Last November I fulfilled a childhood dream by travelling to Qatar to attend the FIFA World Cup.
I spent almost two weeks with dear friends, was caught on camera celebrating Canada’s first ever World Cup goal and watched far too much football (no such thing). We were at the epicentre of sporting success and excess in a host country that had spent unfathomable amounts of money to use football to attract the world’s attention.
We attended four matches and saw some of the brightest stars of their generation play live. The last thing that I expected was to be inspired by two Hollywood comedians who bought a football club in North-East Wales and created a show about their experience called “Welcome to Wrexham”.
Qatar is a fascinating place. Located on a peninsula in the Persian Gulf, it has long been at the crosscurrents of Indian and Arabic culture. Historically it was inhabited by Bedouins that would spent the winter months inland and summers by the sea. The waters around Qatar were rich in pearls and Qataris were excellent pearl divers. At the end of the 19th century Qatar’s population was around 25 000 inhabitants. The population would double in the summer as traders would visit its modest ports to trade and to replenish supplies.
Qatar discovered that the world’s largest natural gas field extended under its northern waters in 1971. The development of the supergiant ‘North Field’ has enabled them to become extraordinarily rich. The vast majority of their wealth has been generated since they began exporting liquid natural gas in 1997.
In 1999 Qatar began broadcasting its news channel Al Jazeera 24 hrs a day. It was an ambitious and savvy maneuver that put them on TV screens around the world and announced their presence on the global stage.
Qatar’s aspirations continue to grow. In 2010 they shocked the world by winning the right to host the FIFA World Cup in 2022. A year later the Emir of Qatar through Qatar Sports Investments became the controlling shareholder of French football club Paris St. Germain (PSG), eventually becoming its full owner. Since then PSG have spent over $1.3 billion on transfer fees and have attracted some of the biggest stars in world football including Lionel Messi, Kylian Mbappe and Neymar.
Qatar is reputed to have spent over $220 billion on infrastructure in preparation to play host to the world. Having been there I can find little justification to dispute these figures. Money is everywhere. So are guest workers.
Currently Qatar has 2.7 million inhabitants. Qatari nationals make up less than 15% of the population.
Qatar’s football stadiums were impressive, but they paled in comparison to their stunning museums.
After time spent in the Museum of Islamic Art one could be forgiven for having gained the impression that Qatar has always been at the epicenter of Islamic culture rather than a small pearl in a much larger mosaic. Their national museum was also spectacular.
Qatar hosted the most watched football World Cup of all time, yet their ambition has evidently not dimmed.
At present Qatari businessman Sheikh Jassim bin Hamad Al Thani is reported to have submitted a $7 billion bid to buy Manchester United. This would be the most money anyone has ever paid for a sports club.
In financial accounting “goodwill” is the value of a business that exceeds its assets minus its liabilities. Qatar has taken the concept of “goodwill” to an entirely different level.
As Qatar was getting ready to host the World Cup, American comedian Rob McElhenney of “It’s Always Sunny in Philadelphia” fame decided that we wanted to buy a football club. He enlisted an English comedy writer that was working for him at the time (and was a football fanatic) to be in charge of finding a club. He also persuaded Ryan Reynolds – of “Deadpool” fame - to join him as co-owner. As McElhenney puts it, he was “TV rich”; Reynolds was “Movie rich”. That was an understatement. Reynolds is the most successful movie star turned entrepreneur in Hollywood history.
They set out several criteria for what club they wanted to purchase. One of the key criteria was ‘narrative’ – or how compelling their story would be if they were to actually achieve success. Wrexham AFC – a club that had fallen on hard times despite being the third oldest professional association football team in the world - scored highest on their list. In February of 2021 they purchased the club for $2.5 million.
The result was an 8 episode show aired on Disney+ called “Welcome to Wrexham” that documented their journey of buying the team, getting to know the community and managing their first season as owners of a football club. We watched this series during the downtime between games in our rented Doha apartment and we have all been following the plight of Wrexham closely ever since.
Wrexham Association Football Club was founded in 1864, ten years before football was introduced to what is now known as Germany, and over a hundred years before Qatar found natural gas.
Wrexham’s economic development had been based on steel, coal, and beer. By the 1980s all of these industries had fallen on hard times and Wrexham’s football fortunes had also dimmed.
Where others saw despair, Rob and Ryan saw the potential for magic.
Top level football is the bastion of oligarchs, private equity and huge TV money, but “Welcome to Wrexham” focused on personal journeys and football’s emotional impact. Ryan and Rob also amplified the club’s appeal and finances by attracting international sponsors and by telling the club’s story over social media. Wrexham AFC currently has 1.2 million TikTok followers, 856 000 Instagram followers and 514 000 twitter followers. These are huge numbers that rank them above some premiership teams, not to mention any other team that had been playing in the lower English professional leagues.