Qatari sovereign fund seeks to buy stake in Wizards, Capitals and Mystics

The Qatar Investment Authority is seeking to buy a minority stake in the group that owns the NBA’s Washington Wizards, the NHL’s Washington Capitals and the WNBA’s Washington Mystics, which would make it the first foreign sovereign fund to own a piece of a major U.S. team sports franchise.

The state-owned Qatari fund is seeking to acquire a 5 percent stake of Monumental Sports & Entertainment, the ownership group led by Ted Leonsis, whose holdings also include Capital One Arena and a local sports cable network, according to a person familiar with the terms. A spokesperson for Monumental declined to comment Thursday.

An NBA spokesman confirmed it is reviewing the investment, which has not been finalized. An NHL spokesman said the investment was approved by the league’s executive board of governors. Spokesmen for the Qatari fund did not immediately respond to requests to comment on the news, which was first reported by Sportico.

The NBA adjusted its rules last year to allow for such foreign investment. No fund is able to own more than 20 percent of a team, according to the amended rule.

“All such investments require league review, NBA Board approval and compliance with the policy,” NBA spokesman Mike Bass said in a statement.

“The NBA Board is currently reviewing a potential investment by QIA in Monumental Sports & Entertainment, the parent company of the Washington Wizards, among other sports properties. In accordance with the policy, if approved, QIA would have a passive, minority investment in the team, with no involvement in its operations or decision-making.”

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Qatar is among the oil-rich Middle Eastern countries that have made lucrative and splashy investments in sports properties as they seek to diversify their investment and bolster their geopolitical standing.

Qatar Sports Investments shook up the soccer world in 2011 when it purchased a controlling stake of French club Paris Saint-Germain, eventually becoming the sole owner. The Saudi Public Investment Fund upended the golf world by launching its own professional golf organization — LIV Golf, which recently partnered with the PGA Tour — and the fund also purchased English football club Newcastle United. The United Arab Emirates also has hosted sporting events, including UFC fights and NBA exhibition games.

But none has outspent Qatar, which reportedly doled out $220 billion to stage the World Cup last year, stirring debate worldwide about sportswashing and whether countries from the region were using sports to distract from human rights abuses.

“I hear the comments about sportswashing. On the other hand, you’re talking about it; others are talking about it,” NBA Commissioner Adam Silver said on “The Dan Patrick Show” this month. “ … In the same way the World — the football World Cup, soccer World Cup — brought enormous attention to Qatar. I think people learn about these countries, learn about what’s happening in the world in ways they otherwise wouldn’t.

“ … Now talking specifically about the NBA, where we’re such a global sport, I think people are a little too dismissive these days about the benefits that come from the commonality around sports,” he continued. “That with a sport like basketball — our Finals are distributed virtually everywhere in the world, the sport is played everywhere in the world — it’s an opportunity to bring people together.”

Despite the relatively small percentage, the Qatari investment is a lucrative one, probably in the range of $200 million. Forbes estimates the Wizards are worth $2.5 billion and the Capitals $1.2 billion. In addition to the downtown arena, estimated at $300 million by Forbes, the group also owns a developmental G League basketball team, esports teams, the newly rebranded Monumental Sports Network and the Capitals’ practice facility. Its entire portfolio is believed to be worth slightly more than $4 billion.

The deal could have ramifications on Leonsis’s bid to purchase the Washington Nationals’ baseball club. The Washington Post has reported that Leonsis offered more than $2 billion to purchase the Nats from the Lerner family last year, though the potential sale has been on hold for much of this year. Major League Baseball does not have a rule prohibiting sovereign investment in its clubs. When new groups bid for ownership of an MLB club, those groups are vetted in their entirety by the owners, who must vote to approve them.

NFL ownership rules prohibit sovereign wealth funds from being used to purchase part of its teams.

While this would be the first major investment in American sports franchises by a sovereign fund, it is not expected to be the last. For the past several months, NBA teams have been able to pursue this type of financing agreement, and a person with knowledge of the situation expects similar investments to come in the future.

“We allow funds to invest in teams but not control teams, not to have influence over teams,” Silver said this month. “So to own an NBA team there has to be an individual with a certain percent of the team to control it.”

Leonsis long has been among the most disruptive owners in sports, having invested early in esports and becoming the first U.S. sports owner to house a sportsbook in his arena. His relationship with Middle Eastern investors stretches back several years.

UAE-based Etihad Airways became the exclusive international airlines partner of the Capitals, Wizards and Mystics after signing a deal with Monumental in 2015. In February 2022, Monumental Sports & Entertainment “marked its partnership” with the Embassy of the State of Qatar by announcing a $25,000 donation from the Qataris to Leveling the Playing Field, a Maryland-based nonprofit that collects and donates sports equipment to programs and schools.

In May 2018, Qatar donated $100,000 to the DowntownDC Business Improvement District, which directed the same amount to Metro, as part of a deal for the transit agency to provide an extra hour of service after Game 4 of the NHL’s Eastern Conference finals between the Capitals and Tampa Bay Lightning at Capital One Arena.

“Qatar firmly believes in power of sports to bring people together in peace and friendship- our Embassy cherishes its role as a member of the DC community and we are pleased to partner with the Mayor, @DowntownDCBID and the Metro to get all Caps fans home safely tonight!” Qatar Ambassador Meshal bin Hamad al-Thani tweeted at the time.

The QIA also controls Qatari Diar, the real estate company that is the principal investor in the CityCenter, a 10-acre multiuse development located within blocks of Capital One Arena.

Scott Allen, Bailey Johnson and Chelsea Janes contributed to this report.

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