Qatar’s wealth fund to buy stake in NBA’s Washington Wizards

Doha: In a first for US sports, Qatar’s sovereign wealth fund has struck a deal to buy a stake in a company that owns a trio of franchises, including the NBA’s Washington Wizards, according to a person familiar with the situation.

The Qatar Investment Authority plans to acquire 5 per cent of Monumental Sports and Entertainment, according to the person who asked not to be identified because negotiations were private. Sportico reported the deal earlier and said the transaction would value Monumental, which also owns the NHL’s Washington Capitals and the WNBA’s Washington Mystics, at about $4 billion. NHL owners have already approved the transaction, but the NBA Board of Directors must vote on it, the website said.

A spokesperson for Monumental declined to comment.

The valuations of NBA teams have swelled in recent years. Last week NBA legend Michael Jordan sold his majority stake in the Charlotte Hornets for $3 billion after purchasing them for $275 million in 2010. And in December, Mat Ishbia bought a controlling interest in the NBA’s Phoenix Suns and WNBA’s Mercury that valued the teams at $4 billion.

Booming valuations have made it difficult for the world’s richest people to buy franchises on their own. That created an opening for investment funds. In December, the NBA started allowing sovereign wealth funds to buy as much as 20 per cent of a franchise. Bloomberg reported earlier this year that executives at Abu Dhabi’s Mubadala Investment and the QIA were interested in NBA ownership.

In April, Peter Biche, chief financial officer of Monumental, said the moves by the leagues had created opportunities to engage many more investors.

“That’s a whole new pool of capital that didn’t exist before,” Biche said in an interview with Bloomberg.