00:00Thanks, Juliet. Yes, some of the biggest events in the golf sporting calendar have already been cancelled.
00:06The Formula One races in Bahrain and Saudi Arabia, which were due to take place next month, are both off.
00:12These bring in tourism revenue and attract hundreds of thousands of fans, both in person and those watching on television.
00:20A football match between Spain and Argentina was due to be played in Qatar this week.
00:25That's also not happening, and the teams couldn't come to an agreement on an alternative venue, so it's completely cancelled
00:32rather than being rearranged at a later date.
00:36Other sports events affected include the MotoGP in Qatar. That's been postponed to later in the year.
00:43So, Siobhan, what more impact could all of this have?
00:46Well, firstly, Juliet, there's the financial impact, both for the host countries and the sports events.
00:51Let's look at those Formula One Grand Prixs I mentioned. Bahrain and Saudi Arabia pay two of the biggest hosting
00:57fees on the F1 calendar,
00:59and it's estimated that the races being off could cost the sport $200 million in lost revenue.
01:05It's also impacting sport outside the region. For example, Pakistan's Cricket Super League will now be played behind closed doors.
01:12It says it's due to a fuel shortage caused by the conflict in the Middle East, Juliet.
01:17We've talked a lot about the Gulf's pivot to stop relying on its oil income, and sport has been a
01:23key revenue driver.
01:24So, what does this mean for those ambitions?
01:26Well, the region has invested billions of dollars in becoming a sport powerhouse.
01:31We had the 2022 Football World Cup in Qatar, and in total, Saudi Arabia and the UAE have invested $65
01:39billion in sport.
01:41That includes Saudi's Live Golf, which has received over $5 billion since its 2022 launch.
01:47It's been reported that the Abu Dhabi Grand Prix, for example, brings in $600 million, but that's now one of
01:54three F1 races under threat this year.
01:56The other two are Qatar and Azerbaijan. A decision will be made on them later in the year.
02:01And in Saudi's case, sport is a key part of its Vision 2030 plan that aims to diversify its economy
02:09away from oil.
02:10And I spoke to Simon Chadwick, professor of Afro-Eurasian sport at Emlyon Business School in Shanghai, about this.
02:18It's looking at about 3% of GDP per annum, and that's comparable with the United States.
02:23So this is a very important time, because obviously the disruption to its plans does threaten its industrial diversification,
02:31and also a number of other things, like the creation of a sport ecosystem as well.
02:35What I found very interesting about Saudi Arabia compared to, for example, Qatar, is Qatar already has the infrastructure,
02:43and so it's a lot more vulnerable than Saudi Arabia.
02:45I think where Saudi Arabia is right now is, given the level of risk and disruption, one would imagine that
02:51as it moves forward,
02:53particularly to 2030 and achievement of its national vision, it will be thinking about risk measures, security measures,
03:01and ensuring that in future, if there is another conflict, its sports facilities won't be affected in any way.
03:08Do these cancellations expose weaknesses in the Gulf's sport hub model?
03:15What's been significant about all of these countries, Saudi Arabia, Qatar, Abu Dhabi, Bahrain, Dubai, is essentially they've been event
03:26-led.
03:27And, of course, the Qatar World Cup in 2022 is perhaps the prime example.
03:31Of course, we then got Saudi Arabian World Cup in 2034.
03:36It's possible that Qatar might host the 2036 Olympic Games.
03:40So these are one-off events.
03:42What you don't have at other times of the year is necessarily the level of economic and industrial activity to
03:49sustain the sport ecosystem in these countries
03:51and, therefore, to help contribute to the diversification of the countries away from oil and gas dependence.
03:58What I would have expected to see, and we are seeing some evidence of this in Saudi Arabia, is the
04:04creation of an ecosystem beyond events.
04:07So, in other words, in Saudi Arabia's case, it's seeking to position itself as an e-sports hub.
04:13And this won't just involve hosting events.
04:15It will involve constructing the hardware.
04:18It will also involve creating and constructing the software as well.
04:23And so, in that sense, you're not overly dependent upon just one race weekend or one mega event every two
04:29or three years.
04:30What you're doing is you're producing something in sport all day, every day, throughout the year.
04:35Do you think the disruption will be short term or could it be something longer term?
04:41One of the things that many of these countries have been trying to do is to attract investors, overseas investors,
04:48to spend money in their countries.
04:50So, to buy teams, perhaps to become sponsors, to invest in broadcasting deals and so forth.
04:55But, obviously, if there's no sport to broadcast, then you can't do that.
04:58But, equally, I think what the war has done is to pose some risks.
05:03And, as we know, business people, investors don't like risk.
05:06And that will take some time to get over.
05:09But I think alongside that, too, is something about intangibility.
05:13And, perhaps, the biggest intangible effect will be the impact upon image and reputation.
05:19So, essentially, these countries were positioning themselves as safe and secure environments in which to stage sport.
05:27But, also, environments in which, really, it was the best of everything.
05:31The best airports, the best airlines, the best hotels, the best beaches.
05:35And, as we've seen, some of those airports have been bombed during the conflict.
05:39But, also, at the same time, what you have is hotels coming under attack.
05:45So, I think image and reputation take a lot longer to repair.
05:49And, so, over the next decade, it will require not just spending on the part of these countries,
05:54but also some very careful strategic management of image and reputation.
05:57And, so, over the next decade, it will require not just spending on the part of these countries,
05:57so, over the next decade.
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