European Football and its soft power appeal to Oil- and gas-dependent states.

The long history of the success of European club football is well-documented, with some of the biggest clubs and competitions. However, one recent phenomenon has occurred since the early 2000s: Oil and gas-dependent states investing money into European Football, with the most notable actors being Qatar, Russia, and the United Arab Emirates (UAE). It has been a growing trend with Manchester City and the City group in the United Kingdom “(UK)”, and the purchase of Paris Saint Germain “(PSG)” by QSI in France. This article will discuss and examine why these states have used European football clubs in this way in recent decades. Oil and gas-dependent states have also been more active worldwide, hosting sporting events, as Russia and Qatar hosted the World Cup in 2018 and 2022 and other sporting events across Europe and worldwide.

Soft Power and Reputations

Political scientist Joseph Nye first coined the term’ soft power’. It is described as “the ability to get what you want through attraction rather than coercion or payments.” The soft power reputational improvement aspect has been suggested by many due to football’s power and cultural significance in Europe. States can use it, as well as state-owned businesses, to cover up issues related to them, such as human rights abuse or poor reputation on the international stage. This term has been coined ‘sports washing’ and has further links to concepts such as ‘soft power.’ 

One example was when the Qatari bought PSG in 2012 through QSI, also known as Qatari Sports Investment, a Qatari governmental-operated sharing organisation. PSG became dominant in France, winning eight out of the ten past national league titles, and has regularly reached the final stages of the Champions League. Despite this, they have faced negative press attention, especially concerning Qatar hosting the World Cup in 2022. There were several articles highlighting Qatar’s poor human rights record, especially involving workers’ rights and the treatment of the LGBTQ+ community in the country. Similarly, the UAE has also faced criticism over their ownership of Manchester City due to the country’s human rights issues, which human rights organisations have highlighted.  Recently, protests have been surrounding specific clubs’ sponsorships linked to Qatar. One example was when Bayern Munich supporters members voiced concerns about Qatar’s human rights issues and the club’s sponsorship by the state-owned airline Qatar Airways. In 2023, this led Bayern Munich to not renew its sponsorship with Qatar Airways; it had been suggested that these protests affected the cancellation of this deal.

Furthermore, Qatar Airways has also sponsored KAS Eupen in Belgium, PSG, and, in the past, FC Barcelona. Individuals have argued that despite some of the adverse reputational risks that come with these sorts of investments, in the case of Qatar, due to the country’s size, it can be seen as a way of projecting power onto the world stage and is part of a broader strategy. The Qatar 2030 vision, an economic and social plan to diversify the Qatari economy away from oil and gas and use of state-funded and state-owned companies, is a critical part of this strategy despite the reputational risks. Similar techniques are in place in the UAE, which has purchased European clubs. For example, the UAE bought 12 clubs worldwide, including ES Troyes AC in France, Girona FC in Spain, Lommel SK in Belgium, and Palermo FC in Italy. This has drawn criticism linked to potentially distorted transfer activity and treatment of smaller clubs in the ownership model as lesser partners, creating tension between owners and fans and causing concern from UEFA. The Multi-Club ownership model is where the same individual or ownership group owns two or more clubs; this can be either a majority or minority stake. However, they cannot be in the same domestic league; it is important to highlight that other businesses or individuals from non-oil and gas-dependent states have partaken in this ownership model. For example, American businessman John Textor, through Eagle Football Holding Limited, owns four clubs worldwide; three are in European football, based in France, Belgium, and the UK; another example would be Red Bull, who own two clubs in Europe and sponsor a club in the UK. 

Economic and Economic Diversification 

The second point that will be covered is linked to economic diversification, a strategy that involves shifting a country’s economy away from a single source to multiple sources of income. It is a particularly important topic for states heavily dependent on oil and gas. This is due to a move from oil and gas to renewable energy sources, which is linked to the environmental damage that oil and gas have caused and the reserves for oil and gas running out. This can be enacted directly by states through sovereign wealth funds, state-owned businesses, or individuals closely linked to the state. One of the suggestions of how this strategy can be used in the case of European football is highlighting the case of Gazprom. This “company” is majority-owned by the Russian state and has used sponsorship deals with the UEFA and football clubs such as Red Star Belgrade in Serbia and Schalke 04 in the Ruhr Region in Germany before the Russian invasion of Ukraine in 2022. These sponsorships allow companies to get more deeply involved in strategic markets. 

This is notable in both cases; before the 2022 invasion of Ukraine, Germany was an important client due to the Nord Stream pipeline, a gas pipeline from Russia to Germany that runs under the Baltic Sea. The Ruhr area of Germany is a key industrial area in the country, and Schalke is located in it. The presence of Gazprom at Schalke, which is based in the city of Gelsenkirchen, allowed them greater access to the local economy and projected a positive image of the company in the area. Because football is widely shown worldwide, this would also advertise a potential global brand to a large-scale audience. This is similar to the case of Red Star Belgrade, one of the biggest clubs in the Balkans. There has been a consolidation of Gazprom and, in parallel, Russia in Serbian society due to the popularity of Red Star within the country and the close history between Russia and Serbia; this further cements Russia’s dominance in this market and despite the ongoing conflict in Ukraine, Red Star remained sponsored by Gazprom. 

The Solution

The EU and UEFA should promote or create a law similar to what is currently being used in the cases of Germany and Sweden. The 50+1 rule means 51% of the voting rights are given to club members to ensure fans’ voices are heard over crucial issues related to the football clubs, such as ticket prices, stadium changes,  changes to competitions domestically, and new sponsors to the club, as this would require approval from the clubs’ members or provide a place for members to voice their opinions. Still, this model also allows some private investment but would require some form of fan or board approval. This solution would enhance the democratisation of European football and protect its unique fan culture, arguably one of its biggest strengths. 

Finally, the multi-club model also would have to be stopped. UEFA and the National Associations would have to enforce a limit on the number of clubs owned by the same ownership group. There have been discussions about this at UEFA, as there have been cases where the same ownership group has ended up playing teams in the same European competition. An example involves RB Leipzig and RB Salzburg, both owned by Red Bull; they have played in the Champions League during the same season in recent years.

The main aspects of nation-states’ or state-owned businesses’ involvement in European football relate to soft power, reputational improvement, and gaining access to new or existing markets. Regarding soft power, European football is seen as an effective tool heavily gas-dependent states use to deepen ties in the market or enter new markets. This is highlighted by Russia’s use of Gazprom in this area by sponsoring clubs (Red Star in Belgrade and Schalke in Germany) and the UEFA Champions League sponsorship until 2022. The reputational aspect has proved more difficult due to increased media coverage relating to the participating state’s human rights issues and partaking in the multi-club ownership model. Despite this negative press attention, some clubs have seen success on the pitch, especially Manchester City and PSG, and being linked to such success can be seen as a reputational boost for these states. Furthermore, despite the adverse press coverage, the states involved see European football and sport more generally as a critical part of economic diversification and as part of a broader government strategy. Finally, using Bayern Munich as an example, the solution outlined would still give the clubs and fans more control over these issues and allow European football to keep its unique fan culture while remaining competitive across domestic and international competitions.

Matt has a keen interest in European affairs, particularly the EU’s approach to foreign policy and Security issues and the role the EU can play in these areas. He holds a Master’s in Political Science from the Vrije Universiteit Amsterdam and a bachelor’s degree in politics and International Relations.

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