Are Sovereign Wealth Funds in Your Sponsorship Future?

When Saudi Arabia’s Public Investment Fund signed an agreement with the ATP Tour in February, I recall dismissing the five-year partnership’s inclusion of naming rights for the tour’s player rankings and on-court branding at the ATP Finals and four other tournaments as mere window dressing surrounding a bigger investment that would support the growth of the sport while serving the kingdom’s many objectives.

But a closer look in the wake of a similar agreement announced this week between PIF and the WTA Tour reveals the fund has genuine interest in the marketing assets and benefits it has acquired from both tennis bodies. Unlike other major sports investment groups making waves these past few years–specifically private equity funds—PIF and other sovereign wealth funds behave more like other global conglomerates, including the employment of hefty marketing, branding and communications teams and budgets that seek to build awareness and interest in the business, among other objectives.

In addition to the recent deals from PIF—which employs a senior vice president-head of events & sponsorships charged with overseeing that its deals support PIF’s four strategic sponsorship pillars of inclusivity, sustainability, youth and technology—Abu Dhabi’s sovereign wealth fund, Mubadala Investment Company, also has been an active sponsor.

Its most recent deals include co-title of the combined 500-level WTA/ATP event in Washington, D.C.—the Mubadala Citi DC Open—and a three-year extension and upgrade signed last June of its agreement with SailGP to become one of the series’ global partners in addition to having title sponsorship of the SailGP finale in San Francisco Bay and the New York Sail Grand Prix off of New York City’s Governors Island.

Unlike PIF’s sports partnerships, which always include bringing events to Saudi Arabia, Mubadala’s deals appear to be more like traditional sponsorships—with a priority on raising the fund’s profile among targeted audiences, including U.S. government officials in Washington. If other sovereign funds have a similar focus, that creates far more opportunities for rights holders to approach them with traditional partnership packages.

The challenge for sponsorship sellers will be to identify which funds, in addition to the Saudi and Abu Dhabi ones, would be interested in sponsorship benefits. Two of the biggest sovereign funds with investments in U.S. sports teams—Qatar Investment Authority, which last year acquired a five percent stake in Monumental Sports & Entertainment for $200 million, and the Norway Government Pension Fund Global, which owns one percent of Madison Square Garden Sports Corp.—would seem to be likely candidates but have shown no interest in obtaining branding or other assets from the properties they are invested in or others for that matter.

So while rising sponsorship activity makes these multi-billion-dollar entities tempting targets for rights holders, securing deals from sovereign funds is far from a slam dunk. For now, without a connection or an especially compelling proposition, most properties will want to keep tabs on players in the category without making it a top priority over other more likely prospects.