Football Partnerships

Al Ain Mineral Water Company, the fully owned entity of Abu Dhabi-based Agthia Group, has signed an agreement to become the official water partner of the UAE Football Association until 2012.

The deal was signed between Yusuf Abdullah, general secretary of the UAE Football Association (UAE FA) and Fasahat Beg, general manager, Al Ain Mineral Water Company.

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Portsmouth yesterday became the second Premier League club to be owned by investors from the United Arab Emirates after a takeover led by Sulaiman Al-Fahim was confirmed.

A statement on the club’s website said that Portsmouth’s current owner Alexandre Gaydamak was pleased “to announce an agreement in principle has been reached” with Al Fahim Asia Associates.

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Football-fever is set to hit the Emirate of Abu Dhabi in February when World Cup 1998 and Euro 2000 winner Marcel Desailly makes his debut at the Chelsea Soccer Schools which will take place at Zayed Sports City in the capital city and also, for the first time, Al Ain.

The French legend will be joined by former Chelsea team mate and ex-England international Graeme Le Saux and women’s World Cup winning star, Lorrie Fair, as well as members of Chelsea’s youth academy coaching staff.

Hosted by Etihad Airways, the official airline and platinum sponsor of English premier league side Chelsea Football Club, the soccer schools will run at Al Ain Football Club on 10 February and in Abu Dhabi from 11-14 February.

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By Jérôme Osselaer

Since its independence from the United Kingdom in 1971 and the discovery of oil more than 30 years ago, the United Arab Emirates has undergone a profound transformation from an impoverished region of small desert principalities to a modern state with a high standard of living.

President Sheikh Khalifa bin Zayed Al Nahyan has been the chief of state since 2004, and is also the ruler of Abu Dhabi and the son of the founding father and first President, Sheikh Zayed bin Sultan Al Nahyan. Since 2006, the Vice President and Prime Minister has been Muhammad bin Rashid Al Maktoum, the ruler of Dubai.

There is still a strong rivalry between Dubai and Abu Dhabi, and more specifically between the Nahyans and the Maktoums. When Dubai built its own seven-star hotel, the Burj Al Arab, Abu Dhabi responded with its own, the Emirates Palace. But Dubai recently received a $15bn bailout from Abu Dhabi and should slow down its investments.

A new business model for Abu Dhabi to reduce its oil-dependence

As nearly 40% of GDP is still directly based on oil and gas output, dependence on oil and a large expatriate workforce are significant long-term challenges. Abu Dhabi’s strategic plan focuses on diversification and creating more opportunities for nationals through improved education and increased private sector employment.

Abu Dhabi, the capital city and the largest and richest of the seven emirates in the UAE, benefits from 9pc of the world’s proven oil reserves and 5pc of the world’s natural gas. Its population is currently 930,000, but is set to rise to two million in 2020.

Since 2004, Sheikh Khalifa bin Zayed Al Nahyan has massively invested through diverse financial vehicles backed up by the biggest sovereign fund in the world, with an estimated $875bn.Two-hundred billion dollars should be invested in the next 10 years to “westernize” the local business model, where sport, art and culture are used to educate the youth to tolerance.

An international marketing strategy to raise Abu Dhabi brand awareness

Abu Dhabi has established The Office of the Brand of Abu Dhabi to rebrand the emirate as an oasis of western culture in the Gulf. “People die, buildings fall down, oil runs out, but brands endure. If Abu Dhabi can become the business hub of modern Arabia, it will be able to generate sustainable wealth” (Rita Clifton, chairman of Interbrand).

Dubai has developed a strategy to become a world-leading hub for commerce, leisure and finance. By contrast, and according to Sheikh Khalifa bin Zayed Al Nahyan, Abu Dhabi’s vision is “to become a world-class destination bridging global cultures [which will] create an enriching environment to be treasured by and to educate generations to come”.

Consequently, Abu Dhabi has invested in culture with local versions of the Guggenheim and Louvre museums, education through partnerships with the Sorbonne, New York University and Massachusetts Institute of Technology, and entertainment. State-owned Abu Dhabi Media Company (ADMC) has started a $1bn production unit to invest in Hollywood and other film industries, and theme parks should be built with Warner Bros and Ferrari.

But the major focus of investment is on sport. Following Dubai, which has less oil than its neighbor and was quicker to diversify its economy, especially through Dubai Sports City for an astonishing cost of $19bn, Abu Dhabi will hold its first F1 race next year, acquired a 5pc stake in Ferrari, and will host a PGA tour stop. Finally, after Dubai investors failed to take over Liverpool, Abu Dhabi succeeded with Manchester City.

Football and airlines are key levers in this strategy

A group of Abu Dhabi investors agreed to buy Manchester City and then signed Robinho for a reported record £32.5m. According to Sulaiman Al-Fahim, who signed the deal, “the UK is the best league in the world and the idea is that Abu Dhabi would like to position itself as a sports and cultural hub”. As Manchester City has now the financial means to end up living outside the shadow of Manchester United, so too does Abu Dhabi with Dubai.

“The purchase of City is a calculated part of the Arab emirate’s wider campaign to promote itself in the west” (D. Conn). Indeed, Abu Dhabi submitted a bid to host the headquarters of the Asian Football Confederation (AFC). It will also host FIFA’s Club World Cup in 2009 and 2010 after beating off rival bids from Japan and Australia. “We wanted to bring the Club World Cup to other countries. To play it in the UAE will be beneficial from a marketing standpoint […] and the fact that they pledged $5 million for grassroots development helped their case” (S. Blatter).

Furthermore, interactions between the airlines, airports, governments and tourism authorities show how an integrated management strategy should enable Abu Dhabi to shift from an aviation traffic hub to a tourism destination. As “elite football is a way to evangelize products to the world and a platform for all sorts of business” (Phil Carling, head of global football at Octagon), Etihad Airways, the national airline of the UAE launched in 2003 and based in Abu Dhabi, has a sponsorship package with Chelsea, a few years after Emirates , the Dubai airline, was the shirt sponsor of the same club.

Even if it seems difficult to “copy-paste” Emirates, which has a naming rights deal with Arsenal, is the shirt sponsor of Paris and Hamburg, and signed an eight-year deal (2007-2014) for 160 M€ to become the sixth major official FIFA partner together with Adidas, Hyundai, Sony, Coca-Cola and Visa. Etihad has a very similar extensive range of sports sponsorships: London’s Harlequins rugby club, an Irish hurling championship, Ferrari, a naming rights deal with the Telstra Dome in Australia to be re-named from early next year as the Etihad Stadium.

“Sport sponsorships form a major part of Etihad’s international marketing strategy. Building on the success of our existing sporting associations with the Ferrari F1 team, Chelsea Football Club, Harlequins Rugby Football Club, the All Ireland Senior Hurling Championships and the Abu Dhabi Golf Championship, this latest deal will further strengthen our growing ties with Australia, particularly Melbourne where we will begin flying in March 2009” (James Hogan, chief executive of Etihad). Etihad is also the title sponsor of the Formula One Etihad Airways Abu Dhabi Grand Prix from 2009.

Last but not least, Manchester City is holding talks with Etihad to replace Thomas Cook as shirt sponsors next summer. The deal could be the biggest of its kind in English football, beating Manchester United’s £65.5m four-year deal with AIG.

What is the future of local football?

Early September, when Robinho moved to Man City, Rafael Sobis joined Al-Jazira for 10 M€. The two clubs are now owned by the Al Nahyan family and the transfer of the 23-year old Brazilian International from Sevilla to Al-Jazira shows the ambition of the UFL (UAE Football League), created in 1973, “to become one of the top three professional football leagues in Asia” (Hamid bin Brook, Chairman, UFL).

The situation changed in 2007, when the UAE won its first trophy, the Gulf Cup hosted in Abu Dhabi. Since then, the most popular sport has attracted more crowds in stadiums, new transfer regulations have been set up, and football has turned professional a few weeks ago. The UFL benchmarked the Saudi league which has, since going professional in 1990, been seen as the strongest in the region, with four consecutive World Cup qualifications. In the wake of professionalism, the UFL signed two deals with MP & Silva to exclusively distribute its marketing and media rights. “MP & Silva is determined to help Asian football grow and the only way to do so is to help federations and rights holders build a strong, viable business model and raising their international profile” (Andrea Radrizzani, CEO, MP & Silva).

These changes should improve the quality of local football, both at clubs and national teams level. Up to now, despite huge amounts of money spent on top class friendlies, training camps in Europe and famous foreign coaches, the Falcons made only one World Cup appearance in 1990, were Asian Cup runner-up in 1996, and reached their lowest FIFA ranking (113th) last month.

However, “the Emirati youth has little interest in sport compared to young people in other countries, with the exception of football.… Emiratis have a soft and easy lifestyle. But sport is not easy” (Ibrahim Abdul Malik, the secretary general of the UAE’s Olympic Committee). The Emirati owners had long been used to a system of rentier income, first from pearl fishing concessions, then from aircraft landing rights and then from oil. The result was a culture of indolence and inertia. For an Emirati, this arrangement funded a cocooned lifestyle where all needs were met from cradle to grave. That is why the government is also using football as a way to combat the soaring prevalence of obesity among nationals.

In order to improve the level of the local football players, in a country where nearly 75% of the population is non-national, Abu Dhabi plans to use Manchester City’s coaching set-up and to build a football academy in partnership with Inter Milan, whereas Dubai should build a football academy with Man United and launched a £100m fund to invest in football players through Emirates NBD, the largest lender in the region by assets. The fund would invest in players’ registration and image rights. NBD will co-invest with clubs in players emerging from the Glenn Hoddle Academy, in which the fund has an equity stake. The fund has also formed a partnership with Dubai’s Al Ahli club.

Football is a royal affair in the UAE and show also the rivalry between Abu Dhabi and Dubai. From 1998 to 2005, Al-Ain and Al-Wahda, both based in Abu Dhabi with a chairman from the Al Nahyan family, shared the titles of champion. Since 2006, Al-Ahli, Al-Wasl and Al-Shabbab, all based in Dubai and run by the Al Maktoum family, have been champions. Al Ain FC is by far the most successful club in the UAE, with 9 league titles and the first and only UAE side to win the AFC Champions League title in 2003. It has been confirmed that a new 45,000 capacity all seater stadium should be built for the club.

But filling stadiums and ensuring the various emirates do not saturate the market are key issues. “From afar it looks like a kind of ‘Build it and they will come’ model, but they won’t come unless you invest and make them come.… And if you effectively build over-capacity it’s going to be very difficult” (Nick Massey, Octagon).

Jérôme Osselaer is a football consultant based in Paris. His column appears regularly in Offsides. Email him at josselaer@gmail.com.

MP & Silva signed a four-year deal to exclusively distribute the marketing rights to United Arab Emirates (UAE) Football League (UFL).

Earlier this year, MP & Silva was appointed as the exclusive Media Advisor of for the domestic market, and the exclusive international rights holder of UFL until 2013. And, despite the current global economic slump, MP & Silva immediately concluded a major sponsorship deal with Japanese electronics giant, Toshiba Corporation, and is close to deals with other commercial partners in other categories.

The Singapore-based media company has also secured wide regional broadcast deals covering all primary markets with pan-Middle East network, Al Jazeera, Al Dawri & Al Kass Sports Channel, and Saudi-based Arab Radio and Television Network (ART). Last week it concluded a deal with Asian cable network, Zee TV for the Indian sub-continent and is expected to tie down several other deals globally with other regional and national broadcasters in the coming months.

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