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Jun 23, 2023 - Economy

Qatar signs deal to buy piece of NBA's Washington Wizards

headshot
Washington Wizards mascot at a game.

Photo by Takashi Aoyama/Getty Images.

Qatar Investment Authority has agreed to buy a 5% stake in Monumental Sports & Entertainment — the parent company of the NBA's Washington Wizards, WNBA's Washington Mystics and NHL's Washington Capitals — from owner Ted Leonsis at a reported enterprise value north of $4 billion.

Why it matters: This would be the first time a sovereign wealth fund has purchased part of an NBA team, but there are questions as to if the league will sign off.

What they're saying: In a statement provided to Axios, the NBA said that its board is "currently reviewing" the deal, adding:

"In November 2022, the NBA Board of Governors decided to permit passive, non-controlling, minority investments in NBA teams by institutional investors, including university endowments, foreign and domestic pension funds, and sovereign wealth funds, subject to a set of policy guidelines adopted at that time."

What's not known: The specifics of those policy guidelines, and if a Qatari sovereign wealth fund would qualify.

  • One possible holdup could be that engaging in homosexual acts in Qatar is illegal and punishable by lengthy prison sentences.
  • In 2017, the NBA pulled its All-Star Game out of Charlotte, due to North Carolina's so-called "bathroom bill" that required transgender people to use public restrooms matching the sex on their birth certificates.
  • The bill was later repealed, and the NBA All-Star Game returned to Charlotte in 2019.

Thought bubble: Leonsis must be aware of the policy guidelines, so the smart money is on this deal being approved.

  • Moreover, the NBA just hosted an All-Star Game in Salt Lake City, despite formally opposing new transgender legislation in Utah. It also allowed Jimmy and Dee Haslam into the ownership club, even though they recently gave record money to an athlete with 25 sexual harassment claims filed against him.

Caveat: It's possible that a Canadian

The bottom line: This is yet another escalation of pro sports franchise values, and Middle Eastern sovereigns represent a huge pot of future liquidity for team owners.

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