Sovereign Wealth Funds in the Sports Arena

Over the last decade, sovereign wealth funds (SWFs) have emerged as influential and active players across a range of global asset classes. Most recently, the spotlight has turned to an unlikely but increasingly strategic frontier: professional sports. Once considered an emotionally charged and volatile investment, sports franchises and associated businesses are now attracting sovereign capital at scale—and with it regulatory scrutiny, geopolitical considerations, and strategic opportunity.

In this Insight, we examine the evolving landscape of SWF activity in professional sports, analyze the multifaceted legal and regulatory frameworks shaping these investments, and assess the broader commercial implications for sovereign investors. Now that we are one year out from the 2026 Men’s World Cup, we anticipate growing attention to the impact of sovereign investors on the sports industry.

THE PUSH OF SWFS INTO PROFESSIONAL SPORTS

SWFs—globally, but specifically those in the Middle East—employ their massive cash reserves as a tool to achieve economic diversification and long-term wealth preservation. Three Middle Eastern countries, the United Arab Emirates, Kingdom of Saudi Arabia, and Qatar, have comprehensive government programs targeting 2030 and beyond for their economic, social, and cultural diversification.

Furthermore, according to the Sovereign Wealth Fund Institute, four of the top 10 SWFs are Middle Eastern entities collectively managing more than $3.5 trillion in AUM. Combining their massive capital and eye toward the future, Middle Eastern SWFs are strategically pursuing high-visibility and high-potential investments in sectors such as AI, healthcare, renewable energy, and fintech.

As SWFs look to further diversify their economies from hydrocarbons, investments in sports teams have emerged as a viable asset class. Investments in professional sports allow SWFs to yield a compelling mix of soft power and advantageous geopolitical positioning.

Sports investing also allows SWFs to capitalize on the global brand power of their ventures. The Qatar-hosted FIFA World Cup in 2022 showcased the ability of sports to project global influence and national prestige. Saudi Arabia is set to host the 2034 World Cup and continues to expand its footprint outside of soccer with investments in golf, Formula 1, and esports. The UAE’s early success through City Football Group (owners of Manchester City) is a further example of long-term sovereign capital reaping sporting and strategic rewards.

While much of the SWF attention has focused on football (soccer), particularly in Europe, sovereign capital has been making inroads across a broader range of sporting assets:

• In Europe, state-backed investments have been welcomed in some leagues (France’s Ligue 1, Italy’s Serie A), while in others—such as the UK’s Premier League—acquisitions have met political and public pushback. The UK Parliament notably scrutinized the acquisition of Newcastle United in 2021.
• In the United States, sovereign investors face greater structural hurdles, including restrictions on ownership in leagues such as the National Football League (NFL). Nonetheless, there has been a marked increase in indirect involvement through partnerships with private equity (PE) firms and family offices, stadium investments, and ancillary business interests.

LEAGUE-LEVEL OWNERSHIP RULES

The divergence of sports investing across regions underscores the fragmented nature of sports ownership rules and regulatory regimes across jurisdictions. Sovereign investments in international sports have not been without controversy, especially in the UK. In 2023, the Premier League approved its own owners’ and directors’ test with new disqualifying criteria, facing criticism for lack of transparency and enforceability. More recently, the Football Governance Bill has completed the UK Parliamentary process and once in force will, amongst other things, aim to create a statutory regime for approving owners and could potentially impact state ownership of UK football teams (our team has provided background on both the Bill and considerations for investors in light of the Bill). Conversely, the continent has taken a more permissive approach to state ownership of sports.

The United States has so far taken a stricter stand on sovereign sports ownership, but the tide appears to be turning. While the NFL currently prohibits SWF investments, its recent ownership rule update allowing PE firms to acquire up to 10% of a team’s equity indicates growing flexibility. While SWFs cannot invest directly in NFL teams, they can be investors in PE funds that own team equity. Other US leagues that have warmed to SWF ownership include the National Basketball Association, which allows up to 20% SWF equity in a team, and Major League Soccer, which is open to SWF investment.

As we recently examined, sports ownership strategies have split between old- and new-school models, with the latter favoring a portfolio-style model with more hands-off owners. For sovereign investors that direct their sports capital in multiple directions over numerous minority team investments, this dispersed ownership dilution may slow decision-making processes.

Further, the topic of multiclub ownership has come under increased scrutiny in Europe; in 2024, UEFA cleared Manchester City and Manchester United to compete in the 2024-2025 club season only after the teams made necessary changes to their multiclub ownership ties with teams in Spain and France. Article 5 of UEFA’s club competition ownership provisions prohibits clubs controlled by the same owners from competing in the same competition. While UEFA’s multiclub ownership rules have been tested before, the 2024-2025 season saw UEFA approving the use of a blind trust structure “on an exceptional basis.”

When considering sports investments, there are a number of multijurisdictional hurdles that sovereign investors may have to clear:

• Committee on Foreign Investment in the United States: With oversight of any foreign acquisition of a US business, CFIUS has the ability to review foreign investments based on potential national security risks. Notably, the recent America First Investment Policy proposes a “fast track” to facilitate greater investment activity from US allies, which could create greater synergies between US investment targets and allies in the Middle East.
• US Corporate Transparency Act: An interim final rule revises the definition of “reporting company” to mean only those entities that are formed under the laws of a foreign country and that have registered to do business in any US state or tribal jurisdiction by the filing of a document with a secretary of state or similar office (formerly known as “foreign reporting companies”).
• UK National Security and Investment Act: Since coming into force in 2022, the NSI Act grants the power to assess and intervene in business transactions, including sports-related mergers and acquisitions.
• EU Foreign Direct Investment Regulation: Responding to growing geopolitical tensions and technological shifts, the European Commission adopted five initiatives in 2024 that, among other objectives, propose increased foreign investment screening. The framework encourages information-sharing among member states, though enforcement remains at the national level.

This trend toward transparency echoes international expectations around sovereign investing, particularly as articulated in the Santiago Principles, a set of 24 voluntary guidelines published by the International Forum of SWFs (IFSWF) aimed at promoting accountability, prudent governance, and financial disclosure among SWFs. Several of the most active sports-interested Middle Eastern SWFs are IFSWF members.

SWFS BEYOND OWNERSHIP

SWFs are also active across the sports value chain in ways that treat sports as a hybrid asset class. These ancillary transactions tend to be bespoke, complex, and wide-ranging but offer attractive financial returns and complement SWFs’ soft power strategies.

• Sponsorships and Naming Rights: State-owned enterprises such as Emirates Airlines, Qatar Airways, and Visit Saudi have secured high-profile sponsorship deals with clubs and leagues, blending commercial exposure with nation-branding strategies.
• Stadium Development and Financing: SWFs are increasingly engaged in stadium investments, contributing to the development of multiuse complexes that integrate real estate, hospitality, and retail components (for example, Manchester City’s Etihad Stadium).
• Entry Into Sports Betting and Technology: As regulated sports betting markets—particularly in North America—expand, SWFs are exploring strategic stakes in technology providers, platform operators, and data analytics firms involved in the high-growth gaming ecosystem.

WHAT COMES NEXT

As SWFs continue to expand their presence in global markets, the US sports industry has emerged as a particularly compelling frontier. Unlike traditional direct ownership models, SWFs are increasingly leveraging indirect investment vehicles and PE partnerships to gain exposure to US-based franchises. These structures offer both insulation from regulatory scrutiny and a level of operational flexibility that aligns with long-term capital deployment strategies.

This trend is amplified by the rise of multiasset platforms that bundle sports team ownership with media rights, real estate, data analytics, and fan engagement technologies. These diversified platforms present a more sophisticated investment directive: not merely buying into the performance of a team but capturing value across the broader sports entertainment ecosystem.

Sovereign investment in professional sports is no longer a novelty—it is a fixture of the global financial and geopolitical landscape. As sovereign investors continue to expand their reach in professional sports, the legal frameworks around them will evolve. Stakeholders must stay agile, informed, and responsive to identify trends, maintain compliance, and seize opportunities in this dynamic rapidly growing arena.