As Michael Owen swooped over Dubai in a helicopter to promote property in the region, he may have seen Steven Gerrard Tower and the half-built Boris Becker Business Tower below. He may have just made out the luxury villa that David Beckham still owns on the huge Palm Jumeirah development reclaimed from the Gulf.
Now the future of many of those developments named after, and actively promoted by sports stars, and Dubai’s continued ability to invest in ever more ambitious venues to attract global sporting events are in doubt in the wake of Dubai World’s request for a six-month repayment moratorium on $60-billion of its $80-billion debt.
“I chose to invest in Dubai because I believe there is huge investment potential in Dubai,” claimed Owen in the glossy promotional video for the First Group, one of a number of investment companies that sell the dream of luxurious living in the manmade oasis of Dubai. “United Arab Emirates is certainly one of the world’s top property hotspots.”
The Manchester United striker has long counted Dubai among his favourite holiday destinations. But when he hangs up his boots, he is unlikely to embark on a second career as a financial adviser — Owen was also an ambassador for Allen Stanford’s bank and had money invested with it when the flamboyant Texan was arrested for fraud earlier this year.
Owen is just one of a string of global sports stars, including Nikki Lauda and Michael Schumacher, and sporting events, from the long-running Dubai Rugby Sevens to more recent forays into golf with the Dubai World Championship and tennis with the Barclays Dubai Championship, to have been used by the emirate as a shortcut to global exposure.
In almost all cases, the stars involved have been sold property at knockdown prices and been paid handsome retainers in return for the use of their names.
Golf courses in the region bear the names of Ernie Els and Tiger Woods. A spectacular shot of Andre Agassi playing Roger Federer on the roof of a skyscraping Dubai hotel made the front pages of newspapers around the world.
Tim Crow, chief executive of Synergy sponsorship consultancy, said: “It’s cost them a lot of money but as a strategy you’d have to say it’s been incredibly successful. But we have reached a point where things are obviously going to change.”
Just this year, the world class 25 000-capacity Dubai Sports City cricket stadium was opened with great fanfare, the latest stage in a drive to attract the world’s best cricket teams to the region.
The sport’s world governing body, the ICC, was persuaded to move there from the historic environs of Lord’s in 2005 by the favourable tax rates on offer, in a move that at the time seemed to embody the shifting sands of the global sports world.
It was envisaged as the first of four stadiums to be completed as part of the wider Dubai Sports City development, with a 60 000-capacity football stadium, a 5 000-capacity hockey ground and an indoor arena for 10 000 to follow.
“What they’ve done in sport has been fantastic for the region. They always got the best people there and they’ve sold lots of property off the back of it. The model they have used of attracting people to the region via their sporting events has worked,” said Andrew Dwyer, managing director of sports agency BrandRapport Arena. “The International Cricket Council are based there. But other sporting bodies might think twice now.”
Like many before them the development companies, including the now embattled government-funded Nakheel property group, recognised that celebrities and sports stars were a shortcut to global recognition as it sought to attract global investors for grand building projects and turbo-charge its transformation into a tourism and business hotspot.
German company ACI Real Estate is building a vast business park just one of the bewildering array of developments that were already starting to spark questions about their sustainability even before the global economic slump, that is intended to house towers named after Becker, Lauda and Schumacher. Those towers are now behind schedule and a beach resort and tennis academy in Ras Al Kaimah named after Becker is on hold. Across Dubai, major projects are in stasis. There are fears that the ambitious Palm development and its neighbouring man-made islands will never be finished, leaving behind a building site rather than a slice of paradise. More than 400 projects worth more than $300-billion are said to have been cancelled or shut down.
Dubai World, the government-owned conglomerate that sparked panic in the global markets by asking for a repayment holiday, owns Nakheel, the company behind the Palm Islands and their even more ambitious cousins, Earth and Universe. Nakheel made no secret of its focus on the luxury end of the business and honed in on sports stars as a means of marketing them. On their way to the 2002 World Cup in Japan and South Korea, the entire England football squad stopped off and Beckham and others including Kieron Dyer and Joe Cole signed up for apartments at discounted rates on the Palm, constructed from 94m cubic metres of sand that doubled the length of Dubai’s coastline to 134km miles.
Andrew Flintoff recently spent time there recuperating from injury. Like Owen and golfer Sam Torrance, he also had a contract to act as a First Group ambassador but his agent said yesterday that the agreement had “come to a natural end”. Beckham is understood to still own his villa, holding on to it as an investment.
Nakheel’s woes could also impact on the newest addition to golf’s calendar. Much speculation surrounded whether the Dubai World Championship, the new end of season finale for golf’s European Tour would take place at all. In the event, Lee Westwood this month picked up £1,5-million in prize money after winning both the tournament and the season-long Road to Dubai. The ragged landscaping around the Earth course and the unfinished clubhouse betrayed the touch and go nature of the enterprise.
Earlier this year Nakheel took over Leisurecorp, the development company which signed the original five-year contract to sponsor the European Tour, valued at about $50-million a year. The demise of Leisurecorp ultimately led to a renegotiation of the deal with European Tour, with prize money reduced by 25%.
Nakheel’s current woes will lead to inevitable questions about the final four years of a deal that seems to encapsulate the boom and bust of Dubai’s relationship with sport. – guardian.co.uk