Oil-money magnates buy up Man City football club
Article published: Monday, December 1st 2008
Manchester City are joining the Premier League big spenders as their new owners splash the cash in an effort to bring the good times to the Eastlands. They still have along way to go, as Sunday’s 1-0 defeat at home to Manchester United proves, but just where has their new found wealth come from? Sarah Irving investigates…
Manchester City’s ownership has been controversial since it was bought out by deposed Thai Prime Minister Thaksin Shinawatra in June 2007. Accused of human rights abuses and stealing state funds, Shinawatra sold the club after he and his wife were convicted of massive corruption. And the new owners? Man City was snapped up by a Sovereign Wealth Fund (SWF) called the Abu Dhabi United Group for Development & Investment this September. All countries have SWFs, but recently it has been those of oil-wealthy Arabian Gulf states that have captured the headlines. The middle eastern states have used oil money to build roads, cities, ports and palaces at home and are aware that climate change and peak oil threaten their vastly affluent ways of life. So now they are diversifying their investments using funds to buy shares, or entire companies, in other economic sectors around the world. The Dubai SWF, for instance, owns the Travelodge chain of hotels, shares in Sony and a company which makes parts for aircrafts, including military jets. It tried to buy Liverpool FC in 2006 but was turned down in favour of squabbling US millionaires Gillett and Hicks, a move the club may be regretting. So who are Man City’s new investment bedfellows? Although the Group spent its first few days of possession trying to keep quiet about exactly where the money was coming from, it soon became clear that the backers were none other than members of Abu Dhabi’s Al-Nahyan ruling family. Abu Dhabi is one of a chain of vastly rich oil kingdoms which stretch along the Arabian Gulf. It is an increasingly popular tourist destination and home to the world’s most expensive hotel (that cost $3 billion to build). Other holdings that belong to the Abu Dhabi SWF include a stake in Citigroup, one of the world’s largest banks and a major funder of environment-wrecking, human-rights-denying global projects such as big dams and giant mines. Unsurprisingly for an oil state, its portfolio also includes fossil fuel companies which are contributing to dangerous climate change and operate in human rights nasties like Uzbekistan and Libya. Its Abu Dhabi Aircraft Technologies provides maintenance services to military aircraft including the RAF when they’re in the region, while Al-Taif Technical Services does the same for military vehicles, including the army of the United Arab Emirates. Many of these small Gulf states are criticised for their internal human rights records, too. Women are still marginalised to varying degrees, there is limited freedom of expression and the royal families are often all-powerful. The tiny, local populations of the United Arab Emirates are already immensely rich, so they import migrant workers from India, East Africa and South-East Asia to work on the huge road, hotel and business district developments. They are housed in appalling conditions, paid low wages to labour in dangerous workplaces and can be sent home at the drop of a hat. Thousands of female migrants also come to Abu Dhabi to work as domestic servants. They frequently report imprisonment, sexual abuse and physical cruelty. So, Manchester City’s new owners come with some morally suspect associations. This adds some urgency to debates over the suitability of some football club owners. Premiership club games see teams owned by dodgy American billionaires play those headed up by Russian tycoons tied to huge fatal mining disasters and gun-running to some of the 20th century’s most bloody conflicts. But with the enormous competition for top players and huge wages paid to star footballers, the money has to come from somewhere. Supporters’ Trusts have tried to bring some clubs back into the ownership of their fans, but as the credit crunch bites, they will have a hard task to keep their beloved teams from becoming the playthings of increasingly dubious business investors.
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