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Sports Biz March 27, 2008, 5:00PM EST

Going for the Gold in the Persian Gulf

(page 2 of 2)

An artist’s rendering of Dubai Sports City, an $8 billion development slated to open in 2010

In Dubai: Down the stretch at last year’s World Cup Steve Crisp/Reuters

Companies near and far have smelled the opportunity. Emirates Airlines has seen its global sports marketing budget mushroom from $6 million in 1999 to $100 million in 2008, says Boutros Boutros, who oversees sponsorships for the carrier. Dubai Duty Free has been upping its sports sponsorship for years and in 2007 spent about $17 million on tennis, golf, and horse racing. This year, British bank Barclays (BCS) plunked down $9 million to become title sponsor of the renamed Barclays Dubai Duty Free Championships in tennis through 2010, its biggest such deal in the region. Other Western companies that have jumped in include watchmaker Omega and CNN, both co-sponsors of the Dubai Desert Classic golf tourney since 2004.

The Gulf sports push got its first boost in 1989, when the PGA European Tour initiated the Dubai Desert Classic. Four years later tennis' ATP Tour held its first Gulf event in Doha. In 1996, Sheik Mohammed inaugurated the Dubai World Cup, a Thoroughbred race that has become the world's richest, with a $6 million purse. This year's event will be run on Mar. 29 and features the 2007 Horse of the Year, Curlin. It will be broadcast in the U.S. on ESPN360, the network's broadband service. And in 2004, Formula One racing kingpin Bernie Ecclestone chose Bahrain and its $150 million Grand Prix track for F1 expansion.

Now there's a gusher of events spouting in the region. For the next three years the Sony Ericsson WTA Tour will hold the women's tennis yearend championships in Doha, after Qatari officials forked over $42 million to unseat Madrid as host city. F1 will add a second Mideast location next year with an event in Abu Dhabi. Dubai will also play host to the prestigious 2009 Rugby World Cup Sevens competition, last staged in Hong Kong in 2005.

PROFITS NOT NECESSARY

The money being poured into events and mega-sports centers like Dubai Sports City is all the more remarkable when you consider their backers may never see a penny in profits. Attendance at the Dubai Desert Classic golf tourney in 2008 was a modest 61,964. At the men's and women's tennis events in February, even the relatively small stadium was often half-empty. Sinead El Sibai, who oversees advertising for Dubai Duty Free, says the tournaments are not "run as moneymakers." Instead, she says, "the exposure generated by the tournaments is an investment in our brand and in the promotion of Dubai."

But many are still convinced there's sports gold to be found in the desert. One indicator is the growing presence of IMG, the giant sports management company with a roster of clients such as Woods, Federer, Nascar driver Jeff Gordon, and football's Peyton and Eli Manning. The Cleveland firm opened an office in Dubai in 2005, leasing high-end office space on swanky Sheik Zayed Road. It plans a multi-sport center modeled after its famed Bradenton (Fla.) academy, with tennis and golf schools led by legendary gurus Nick Bollettieri and David Leadbetter, in a development called Dubai Lifestyle City. Its clients are equally bullish: Woods is creating his first-ever signature course and 25 million-sq.-ft. resort community, to open in late 2009.

So enamored is IMG of the region that it is contemplating another office in Abu Dhabi. "Your only limitation is your imagination," says Greg Sproule, the 44-year-old Canadian who heads up the Dubai branch. "People want more, they want better, they want to be more creative, and they want to make money. That's a great formula."

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