Not that long ago PGA Commissioner Jay Monahan said this about Saudi-backed LIV Golf.
“It’s not an issue for me because I don’t work for the Saudi Arabian government, but it probably is an issue for the players who chose to go and take that money," Jay Monahan says.
Then, all of a sudden, Monahan's dismissiveness turned into an enthusiastic embrace.
“To be able to say that we’re now on a path of unification. … To be able to have a partner that can invest back in the fan experience … is very exciting.”
The PGA-LIV Golf merger deal is meant to help the sport. But some analysts say, the real help is going to Saudia Arabia... they say the Kingdom is trying to "sportswash" its international reputation.
“The thing is, you can't undo the stains, but what you can do is obscure how visible those stains are," Sarath Ganji says.
Today, On Point: Saudia Arabia, sportswashing and golf.
Sarath Ganji, director of the Autocracy and Global Sports Initiative, which investigates the role of malign finance in the global sports sector. 2023 Next Gen national security fellow at the Center for a New American Security. Author of "The Rise of Sportswashing."
Susan Bachrach, staff historian at the United States Holocaust Memorial Museum.
NEWS ANNOUNCER: (CHEERS) He takes down all the stars in Los Angeles to win the United States Open. (CHEERS)
MEGHNA CHAKRABARTI: This past Sunday marked the end of the 2023 U.S. Open Golf Championship. Underdog Wyndham Clark claimed his first major victory. But that feel-good sports story wasn't the one dominating the golf world. It was a different announcement, made two weeks earlier.
NEWS ANNOUNCER: The PGA Tour, European Tour and rival LIV Golf circuit have announced a landmark agreement to merge and form a commercial entity to unify the sport.
CHAKRABARIT: This is On Point. I'm Meghna Chakrabarti. And that announcement is the one that shocked the sports world. The merger between the prestigious PGA Tour and the one-year-old LIV Golf had been unimaginable. Upstart LIV is financed by the Saudi Arabian government. The PGA and LIV had spent the past year in what could most charitably be called a very contentious relationship. After all, for LIV Golf to become the prestigious league it hoped to be, it needed talent. And to find that talent, it went poaching in the PGA.
Over the past year, the league offered more than $100 million in signing bonuses per player to woo top golfers like Phil Mickelson and Dustin Johnson. And the money wasn't just reserved for the best players, either. You see, the PGA Tour isn't like the NBA, where the league's minimum salary was more than $950,000 this past year in basketball. The PGA Tour sees its athletes as independent contractors, and the players earn their money based on their success on the golf course. LIV Golf offered something different. A minimum payout of $120,000 for the player who finished dead last.
So some golfers saw that as a great opportunity for financial stability that's not always promised on the PGA Tour. But as players signed with LIV Golf, the PGA Tour made sure that they knew it was not happy with the decision.
NEWS ANNOUNCER: Just half an hour after the first ball was struck, in the first event of this LIV Golf series, the PGA Tour issued a memo to its members. And it starts off with talking about players who have decided to turn their backs on the PGA Tour, by willfully violating a regulation.
It says that simultaneous to the players receiving this memo, the following players are all banned from playing on the PGA Tour, suspended, and no longer eligible to play in the PGA Tour. And it lists 17 players, including the likes of Phil Mickelson, Dustin Johnson, Ian Poulter, Lee Westwood, Sergio Garcia.
CHAKRABARTI: The PGA had indeed banned some of the biggest names in golf. PGA Tour Commissioner Jay Monahan defended his decision, questioning instead the ethics of the players and the motivation of LIV Golf.
REPORTER: How big of an issue is it where the money is coming from? As far as that tour?
JAY MONAHAN: Well, it's not an issue for me because I don't work for the Saudi Arabian government. But it probably is an issue for players that chose to go and take that money. And I think you have to ask yourself the question, Jim, "Why?" Why is this group spending so much money, billions of dollars, recruiting players and chasing a concept with no possibility of a return?
CHAKRABARTI: Why? Keep that question in mind. 11 golfers, including Phil Mickelson, filed an antitrust lawsuit against the PGA Tour to challenge their suspension last August. LIV Golf soon joined the lawsuit, before the PGA Tour filed its own countersuit, alleging that LIV Golf interfered with existing contracts with its players. So this is what we mean by a contentious year.
(MUSIC) And that brings us back to two weeks ago. When the Jay Monahan, who not that long ago had questioned the finances and ethics of both the Saudi Arabian government and several golfers themselves, that Jay Monahan suddenly seemed to disappear. In his place materialized a different Jay Monahan, one who opened his arms wide to embrace the same LIV Golf he once so despised.
MONAHAN: To be able to say that we're now on a path of unification, to be able to have a partner that can invest back in the fan experience, is very exciting.
CHAKRABARTI: To quote the old Jay Monahan. "Why?" The PGA-LIV merger didn't eliminate the ethical questions that Monahan seemed to have forgotten that he'd raised. Instead, they came from political leaders such as Chris Murphy, Democratic senator from Connecticut.
CHRIS MURPHY: This is a watershed moment, and I think we need to treat it as such. Listen, let's be honest. The Saudis aren't buying the PGA because they love golf. They're buying the PGA because they want to erase their dizzying campaign of political repression. And it's disappointing.
CHAKRABARTI: So what Chris Murphy is getting at, a shorthand version would be, Saudi Arabia is sportswashing. Well, what exactly is sportswashing and what's going on here with golf? Well, joining us now is Sarath Ganji. He's the director of the Autocracy and Global Sports Initiative and the 2023 Next Gen national security fellow at the Center for a New American Security. Sarath, welcome to On Point.
SARATH GANJI: Hello, Meghna. Thanks so much for having me.
CHAKRABARTI: Okay. So first of all, I'm not the most breathless follower of golf. So can you tell me a little bit more about what we know about how this deal went down? And why all of a sudden? Because it really did seem to shock the sports world.
GANJI: It's a great question. And in fact, a lot of America's professional golfers are asking the exact same one. We came to find out about this blockbuster framework agreement on the morning of June 6, after the head of the PGA, Jay Monahan, and the head not of LIV Golf, but of the Saudi public investment fund, Yasir Al-Rumayyan, both appeared in CNBC's Squawk Box to announce the deal.
At that point, a few players had gotten phone calls, maybe the day before. Cameron Smith, the Australian who had won the Open championship the year prior and was one of the players, as you correctly named, who had received a $100 million signing bonus to move over to LIV Golf. Got a quick phone call.
But even Greg Norman, the CEO of LIV Golf, was kept out of the loop, based on reporting that we've subsequently received from the Wall Street Journal, the Financial Times, the New York Times. We know that there were roughly seven week's worth of secret meetings taking place primarily in Europe. First Italy, and then I believe in the U.K., between Jay Monahan, between Yasir Al-Rumayyan, and then a couple of Americans who you might consider dealmakers and were involved in the process of trying to figure out how you can tie the PGA after such a contentious, heated debate and a litigious rivalry with LIV Golf together with the Saudi Public Investment fund.
And in fact, it's telling that at that sit down on Squawk Box, the two of them never described what they had reached as a signed, sealed and delivered deal, nor did they call it a merger. For them, it's a framework, which means there's still a lot of things that are up in the air. And hopefully we'll find that out. Certainly, there are Senate committees, the Department of Justice looking into it, and it's also telling that we don't quite have a timeline on how all of this will come together yet.
CHAKRABARTI: Yeah, so point taken. There's still much to be hashed out in terms of the quote-unquote, "new partnership." But nevertheless, the point is, is that Jay Monahan sat next to, you know, a representative of Saudi's sovereign wealth fund, whereas the same PGA commissioner, not that long ago, was basically saying, "I would never take the Saudis money."
GANJI: What a stunning turnaround, right? (LAUGHS)
CHAKRABARTI: Yeah. (LAUGHS)
GANJI: It's impressive, too, that this framework agreement, ostensibly what has been communicated to the public is that the PGA Tour, which represents North America, and the European PGA, which is also known as the DP World Tour, represents Europe, are joining hands into a new company. And as part of that new company, it's not LIV that will be involved, but purely the public investment fund as the primary, maybe even sole financial backer. And so that seems to be the basis of this agreement. Which underlies the way in which we hear the hypocrisy coming out of those who are now trying to defend this deal, after being so seemingly morally opposed to Saudi money in golf to begin with.
CHAKRABARTI: Okay. So let's talk more about the public investment fund. It's also referred to as Saudi Arabia's sovereign wealth fund. It's about $620 billion in assets, according to ESPN. Tell us more about that, and why it's so important to understand, or why it's so critical to know that the funding for this new partnership is coming from that particular financial source.
GANJI: Yeah. The de facto ruler of Saudi Arabia is Mohammed bin Salman. He is the son of the current king. And he rose to power by bumping elbows, muscling out a lot of potential rivals. The famous story of hundreds of businesspersons and potential family competitors being detained in the Ritz-Carlton as he took control of major governmental institutions certainly comes to mind from back in, I believe it was 2017, 2018.
That's relevant because the Public Investment Fund, which is the key financial vehicle for foreign investments on behalf of the state, ends up being a really important instrument for leveraging Saudi Arabia's hydrocarbon wealth and its global financial prowess in ways that can exert influence abroad. In the broader context of the Gulf monarchies, and here I'm thinking not just about Saudi Arabia, Qatar and the UAE.
You often see not one, but maybe a few sovereign wealth funds. One of which might be devoted towards spending internally within the country, and the other towards spending externally. The Public Investment Fund does both, but it's drawn a lot of attention in recent years as part of a broader strategy, according to Saudi Vision 2030, the country's guiding blueprint to economically diversify. And then along the way we've seen PIF invest in properties like Meta, Live Nation, Disney and of course, the major sporting properties now.
CHAKRABARTI: Okay. So that could be read as just diversifying, as you're saying. But there's something implied in its investment in sports that leads us to this question of sportswashing. Right? So we're going to get to that more when we come back from a quick break. This is On Point.
CHAKRABARTI: Sarath Ganji joins us today. He's director of the Autocracy and Global Sports Initiative. And we're talking about Saudi Arabia, the PGA-LIV Golf partnership and sportswashing. You know, Sarath, we could spend the entire hour on the crazy details of the announcement that happened between the PGA and LIV Golf. We're not going to do that. But there's one more detail I just want to, like, share with listeners. This comes from ESPN's reporting.
Because it's just so wild. That one of the deal makers, Sarath, that you had mentioned earlier, that made this happen between LIV and PGA was a gentleman named James Dunne III. And what's so crazy about this is that he, Dunne, is one of the founders of Sandler O'Neill and Partners, that used to have an office at the top of the World Trade Center.
And his company lost 40% of its employees when the planes crashed into the World Trade Center on 9/11. And, of course, what, 15 of the 19 hijackers that day were Saudi. And Dunne would have been in the building, except for the fact that that day he was at Bedford Golf & Tennis Club trying to qualify for the U.S. mid-amateur tournament. So, I mean, the sort of folds upon folds of strange relationships in the story are just crazy, don't you think, Sarath?
GANJI: Absolutely. Dunne was reportedly a close associate, maybe even a friend of Rory McIlroy, the Irish golfer who's currently the world No. 3. He received a text from Dunne the night before the blockbuster announcement on June 6 about the merger. The following morning, he got a phone call from Dunne, McIlroy did, in which he learned about the news just before it came down.
The day after that, Rory was in Canada, as part of a competition, gave a 30-minute press conference in which he essentially resigned himself to the fact of Saudi money and sports and described himself as a sacrificial lamb. Rory has been one of the biggest mouthpieces in defense of the PGA. That goes back to 2020, 2021, when we first heard about the possibility of an upstart golf tour being funded by the Saudis. His moral line very much aligned with what you heard from Dunne, as you just quoted and reported, as well as what we've heard from Monahan. And then in a matter of seven weeks, somehow shooting a round of 18 can change moral minds that quickly.
CHAKRABARTI: Wow, money talks. Okay, so let's get back to this issue of sportswashing. As you said earlier, it's about countries using their ample funds, no matter how those funds have been generated, to use sports to influence their sort of global reputation. What is it about sports in general that makes it such a fertile field for this kind of effort? And I keep wondering that, because I look at your title, Sarath, and you're the director of the Autocracy and Global Sports Initiative, which I didn't even think would have to exist, and yet the very center does. What's going on here?
GANJI: (LAUGHS) Right. Here we are. Sportswashing is one of those terms that has come up over the last few years to try to characterize the role of what feels like a different kind of financial investor in the world of sports and entertainment. If we think of sports and entertainment as a singular sector, there are two qualities about it that make it really attractive to investors in general.
But to autocratic investors in particular. The first is its high visibility. We know about the English Premier League. We know about the World Cup. We know about the Dustin Johnsons and the Cameron Smiths and the Phil Mickelson's of the world. These are all leagues and franchises and players and nine-figure broadcasting and sponsorship contracts that have global reach.
And that visibility is attractive for those who might have dirty, stained reputations and are looking to distract audiences from those games by linking themselves with highly positive brands. Ones that, though this is highly debatable, are disassociated from the dirtiness of politics, as so many people are want to believe it is. So that's one piece of it, the high visibility. But just because something is highly visible doesn't mean you can get a crack at it. Not everyone can spend billion-dollar sums to get into the game. And even if they could, there might be restrictions in the way.
So that's the second piece of what makes the sports and entertainment sector so attractive, is the low barriers to entry. These are generally unregulated or under-regulated environments. Where in the context of, say, the Premier League, as long as you have the money, it's not too difficult to pass the directors and owners test that governs to what extent you are either a private equity firm, or a sovereign wealth fund or a sports management firm linked to an autocratic regime. In the case of the UAE, Qatar and Saudi Arabia.
And so you have access, and you have the visibility, making sports and entertainment so attractive. And I would just note that that's not unique. Those two attributes, to sports entertainment. We see it in the sectors of health care and higher education, the media and academia, even culture and arts with big brands like the Louvre playing a role in the public history, memorialization and monumental initiatives of the Gulf monarchies, of autocrats. So, all that.
CHAKRABARTI: So, yes, you've given us some really interesting examples in other sectors outside of sports. But I mean, my producer, Jon pointed this out the other day, that we don't say entertainwash, right? When the Saudi public investment fund invests in, you know, Hollywood movies. Or techwash, when they're buying up companies, or offering venture funds for folks. Or artwash, we don't say artwash when the Louvre does something like this. What is it about sports and the role that it plays in people's lives that makes it so unique in this context?
GANJI: A part of it has to do with, in many ways, the manner in which sports is, you can say, critical infrastructure, a critical sector. There's that tremendous docuseries on Netflix, "Sunderland 'Til I Die," which shows the role of sports in the local economy of Sunderland, as well as just the local social fabric. Thinking here about Robert Putnam and social capital. Sports is a way of delivering that social capital to communities and linking them, stitching them together. So there's that piece of it.
But it's also just how widespread, how considerable the reach of the sport is to the point that the influencer, the global figure with the largest social media following is not a head of state. It's a football player, Cristiano Ronaldo, who's now currently playing in Saudi Arabia.
GANJI: And so it's quite telling that it's these athletes who end up serving as influencers. But when paired with, say, autocratic money, become unofficial spokespeople for foreign governments.
CHAKRABARTI: Okay. So you have just raised the perfect example that allows us to dive into another deal that the Saudis made with one of the most popular athletes in the world, because you had mentioned Ronaldo, now playing in the Saudi pro league. Also, Karim Benzema, as well, which is fascinating enough. Folks, we're about to just like tell you a story. Just prepare to have your minds blown. Okay?
Because it blew my mind. Because another example that comes out of the world of soccer is the current king of football himself, World Cup champion Lionel Messi. Now the Saudi club Al-Hilal reportedly made Messi a three-year, $1.6 billion offer to play with them. Now, Messi turned down Al-Hilal and instead jetted over to the United States, joining Major League soccer's Inter Miami. However, Messi didn't completely snub the Saudis.
KARIM ZIDAN: As it turns out, Leo Messi does have an actual official partnership with Saudi Arabia.
CHAKRABARTI: Now, this is Karim Zidan. He's an investigative journalist focusing on the intersection of sports, power and politics. And he co-reported a story for the New York Times that discovered Lionel Messi has a contract with Saudi Arabia's tourism authority.
ZIDAN: The contracts really revealed a very interesting and rare insight into how Saudi Arabia operates, and how it is willing to strategize and use its wealth to burnish its image. So in this case, really, Messi's contract is worth about $25 million over three years. And really, it's $25 million for very little. It's a few commercial appearances, a handful of social media posts and vacations to the kingdom with his family.
CHAKRABARTI: $25 million to take vacations and post on social media. According to the details of the contract, Messi receives about $2 million for taking his family on vacation to Saudi Arabia. And he's got a choice. One vacay a year, lasting five days. Or two trips a year, lasting three days each.
And according to Zidan's reporting, the travel expenses and five-star accommodations were to be paid by the Saudi government, for Messi and up to 20 family members and friends. Lionel Messi also gets bags of money for those social media posts about Saudi Arabia, but he can't just post whatever he wants. Lionel Messi has chosen to self-muzzle in this contract. He cannot post or say anything that might tarnish Saudi Arabia's image.
ZIDAN: Despite the fact that this is a country that has faced widespread and well-documented human rights concerns and abuses. Right? So this is a very, very rare glimpse inside how this kingdom uses its wealth to sort of enlist marquee athletes. And it's very clear that they're doing so not just simply to build their sports empire, but to actually fuel other sectors of their economy, including tourism.
CHAKRABARTI: All told, even though Messi isn't playing soccer in Saudi Arabia right now, Zidan says that doesn't change the reality that one of the world's most loved athletes is still a part of Saudi Arabia's sportswashing process.
ZIDAN: Who would have guessed a few years ago that players such as Ronaldo and Messi would even consider playing in the kingdom? And Karim Benzema. Like Messi, in the end, did not decide to play in Saudi Arabia. That is true. He ended up going to Inter Miami, for a deal that appears to have been actually less than what he was offered in Saudi Arabia. So there is still hope to believe that Saudi Arabia won't necessarily be able to buy up the entire world, just by offering the most amount of money.
But it's getting pretty damn close, I think. It's getting close. Messi might have used the excuse, or actually it might have been very valid, that his family didn't want to live in Saudi, and they preferred living in the United States for the foreseeable future. I mean, that's very, very possible. The end of the day, he's still a Saudi pitch man. He can now play in the United States and still promote Saudi Arabia. It's a win-win for them.
CHAKRABARTI: That's Karim Zidan, investigative journalist, focusing on the intersection of sports, power and politics. He's also author of the "Sports Politika" newsletter. Now, Sarath, so that is, again, just a mind-blowing example to me, coming out of the world of soccer. Where we started with the LIV Golf-PGA partnership. But where else in the world of sports do we see Saudi Arabia's use of its public investment fund reaching into?
GANJI: Yeah. Alongside global soccer and global golf, PIF has made a number of investments in more broad entertainment properties. Again, referring back to this entertainment and sports sector across the globe. So Live Nation, which puts on concerts, of course, if you're a Taylor Swift fan, you know about the conundrum, the fiasco with Ticketmaster, some of which is being investigated by Congress now. Live Nation was part of that bailout deal. You also have Disney, the parent company of ESPN, in which PIF has a major stake, or, sorry, an important financial stake.
Also, Meta, the parent company of Facebook and Instagram. It's interesting that that story that Karim and Tariq did in the New York Times includes a really gorgeous picture, back turned, of Lionel Messi looking out at a Saudi sunset as part of that contract. And so that's something that he can post on Instagram, which it turns out the Public investment Fund has a stake in. And then, of course, Newcastle, which is a soccer team in northeast U.K., is 80% owned by the Public Investment Fund.
CHAKRABARTI: Okay. I also see that, for example, there's Saudi money in Formula One, perhaps entering boxing, even the NBA. There's some reporting here that as of December of last year, the NBA has decided to allow sovereign wealth funds, pension funds and endowments to buy stakes in basketball teams in the United States. Now, Saudi Arabia hasn't announced any interest in them yet, but that seems to be a significant change here in the United States.
GANJI: It is. The NBA in recent years has entertained potential expansion plans, so bringing a couple of new teams maybe into the NBA. Also, they're considering shortening the season, but maybe implementing a type of mid-season knockout tournament in the fashion that you see with major soccer leagues in Europe. And so more capital is going to be needed. And the way to raise that capital is to broaden the potential pool of financial investors who might come in.
And of course, sovereign wealth funds are part of that. It's important to note that with the internationalization of sports in general, and of course the NBA in particular, it's not as if the NBA hasn't been in hot water before when it comes to dealing with autocratic regimes. Of course, the former Houston Rockets GM, Daryl Morey, getting in hot water over his support for Hong Kong. That resulted in Chinese media markets blacking out NBA games and the NBA having to reach back out. So you even see in the NBA a little bit of a history of the challenges of trying to engage with autocratic states becoming financial players.
CHAKRABARTI: I see. Now, you've written about how you see sportswashing as part of the autocrat's playbook. Right? But in the case of Saudi Arabia, I mean, if that is indeed what they are doing with their parts of their Public Investment Fund, it implies that the Saudis also think there's something that needs to be washed in their international reputation. Now, I could name a couple of things from an American point of view, but, you know, what do you think the Saudis are trying to wash away?
GANJI: There's maybe two cuts to this I would provide. One thing to wash away is the broader appearance of instability in the Middle East. To the extent that many, say, Americans and Brits, two big markets right there, have a perception of war and terrorism that mars the Middle East as inflated or maybe outdated, as parts of that impression may be. That certainly hurts the tourism potential of Saudi Arabia that Karim had mentioned in his reporting for the New York Times.
So in order to diversify your economy, tourism might be a great sector, but you've got to change outside perceptions. And the perception of instability or uncertainty is one of those. The other set of stains or dirt we might talk about is the brutalist rule of Mohammad bin Salman.
So I mentioned earlier his rise to power. The number of ways he elbowed out, muscled out his competitors. Alongside that, there was the brutal detainment, killing and dismemberment of Saudi journalist Jamal Khashoggi, who had been an opinion writer for the Washington Post. So a Saudi national journalist, and Saudi denials ended up being rebuffed by intelligence agencies in the U.S. who found that MBS absolutely gave the head order to kill that journalist.
CHAKRABARTI: Right. So the point being, the hope that people won't think of the, you know, children starving to death in Yemen, or the murder of Jamal Khashoggi and instead think, "Hey, maybe I should take a vacation in Jeddah on the Red Sea." The question is, does it work? So we're going to talk about that when we come back.
CHAKRABARTI: We're talking about the PGA-LIV deal, which is financed by Saudi Arabia and specifically its sovereign wealth fund. And what it tells us, or the window that it gives us, into the practice of countries using sports to sportswash their reputations. Now, there's been a strong reaction to the PGA-LIV partnership, and much of it has come from the families of victims of 9/11. Kristen Breitweiser lost her husband on Sept. 11, 2001, and she and other families have pointed their frustration at the PGA and at LIV for their merger.
KRISTEN BREITWEISER: Whether it's presidents, members of Congress, corporations in America or the PGA Tour, the 9/11 families are used to Saudi money trumping morals and murder. And in our case, the murder of our 3,000 loved ones.
CHAKRABARTI: Once again, that's Kristen Breitweiser, a survivor, or a loved one, who lost her husband on 9/11. Now, the idea or the practice of sportswashing isn't necessarily anything new. In fact, it goes way back, perhaps even to, you know, the first organized games that human beings played with each other. But perhaps one of the most pointed examples comes from 1936 and the Summer Olympics in Berlin. Lots of folks look at that as the first modern example of sportswashing. And historian Susan Bachrach told us what happened.
SUSAN BACHRACH: After World War I, Germany was, by virtue of the Versailles treaty, declared responsible for that terrible conflict. And as a result, it really had to work very hard to reenter the fold of nations. For example, in the Olympic Games, Germany was not allowed to participate. In 1920, that were held in Belgium, 1924 in Paris. But ten years later, by 1928, distant from the end of the war, Germany was allowed to participate in those games.
In 1931, the International Olympic Committee decided that they were going to have the 1936 Olympics in Berlin. And then in 1933, the big controversy arises. Because now we have the Nazis coming to power, when Hitler was appointed chancellor in January 1933.
And the Nazis had always said they hated the Olympics. In fact, they called the 1932 Olympics in Los Angeles the Jew games. So originally, the Nazis themselves did not want to hold those games in Berlin, at which point Joseph Goebbels, the minister of propaganda, steps in and says, "This is a fabulous propaganda opportunity, a way to present the new Germany to the world, and we can't turn down this opportunity."
NEWS ANNOUNCER: So with the pigeons carrying a message of peace to the world begins the event for which all Germany has been preparing for months past. For 14 days, Berlin will be the scene of the fiercest battles between 50 nations, battles of peace, for 14 days --
BACHRACH: The way the games have been organized, in this very spectacular fashion. There was a new stadium built, lavish parties.
NEWS ANNOUNCER: But most impressive in an impressive day is the arrival of the last of 3,000 runners who have brought the sacred flame 1,800 miles through seven different countries, from Greece. (CHEERS)
BACHRACH: Nazi Germany did everything it had to hide some of the distasteful aspects of the regime, taking down anti-Jewish signs. It was very orchestrated and, in every way, possible to present the most favorable face of Germany.
NEWS ANNOUNCER: 100,000 spectators are present. They see the charming incident of the presentation of a bouquet to the Führer by a little girl, meets him on his way to his box. They see the great parade of athletes from all over the world.
BACHRACH: Prior to the Olympics, the New York Times has covered the huge debate and controversy about whether the U.S. should even participate in these games. And had been critical of the racist and other oppressive aspects of the Nazi regime. And the coverage after the games can only be described as glowing. "Maybe Germany has changed its tune, is back in the standing of good nations, and so forth and so on." So it was a propaganda success. It's ironic because today, when most Americans think about the 1936 Olympics, they probably think about one person, one American athlete who was very, very successful at those games.
NEWS ANNOUNCER: In the hundred meters, Jesse Owens on the far right has already beaten the world record in his first heat, but the time was disallowed as the wind was behind him. And running like the wind he wins the final and equals the world record of 10.3 seconds.
BACHRACH: That's a great story, but it's also a very feel-good story for Americans. Because it sort of covers up some of the bad things that are happening in this country during the 1930s. And it also kind of flies in the face of the fact that Nazi Germany did so successfully use those games as propaganda.
CHAKRABARTI: That's Susan Bachrach, staff historian at the U.S. Holocaust Memorial Museum. And to Susan's point, in 1938, Nazi propagandist filmmaker Leni Riefenstahl made a film about the Berlin Olympics. And, of course, the very next year, in 1939, World War II began. So, Sarath, what is your take on whether sportswashing works, whether it meets the objectives of the autocrats and autocracies that seek to use sports to burnish their image?
GANJI: "Fabulous propaganda opportunity." Wow. Those words are really ringing in my head. Sportswashing is one-part malign finance. So the money that autocrats are putting into these sports, to derive leverage. And we've talked about any number of properties around the world in which the Public Investment Fund has done so. The second piece is information manipulation. And I think the Nazi Olympics, Susan, specific points around that. The narration really get into information manipulation, the ways in which you're trying to change how people perceive those stains on your record, your reputation, your image by way of changing the information that reaches them.
I would say, broadly, that there's a kind of a mixed record around sportswashing, but you really have to parcel out what it means to sportswash. The 1936 Olympics was an instance of hosting an event. Right? And certainly, last year's World Cup in Qatar was the same way. But a more advanced forms of sportswashing include broadcasting sporting events overseas and then sponsoring sporting properties abroad. And then, of course, in the context of LIV and Newcastle, owning properties.
Now, as you move up that maturity model, what you find is there's a little bit more anecdotal evidence of success when it comes to sportswashing. So here's what I mean. In the context of the 2018 Russian World Cup, and this is a story that Karim spoke to in the past, on the very first day of the World Cup, which was hosted in Russia, you had the host playing, ironically, Saudi Arabia. During that game, the Kremlin dropped the announcement that it was raising the nation's retirement age. Meanwhile, a year before this game transpired, Putin issued a presidential decree preventing protests and demonstrations in the host cities.
And so what was a deeply unpopular legislative move on the part of the Duma was effectively buried in the news cycle, as well as just the emotions and revelry of the moment of being a Russian hosting the World Cup. And then also for those who wanted to protest and try to protest, either they were fearful of being detained, or they came out and protested. And you saw hundreds of arrests. And so that's an instance when dissent was circumscribed. And a couple of months later that law passed, sportswashing worked.
Maybe the flipside of that, though, is if you're trying to bury the fact of investing in sports for the sake of washing your reputation, it's interesting that the number of news articles, just based on a simple LexisNexis search, show that Qatar, the UAE and especially Saudi Arabia, are being tagged with the title of sportswasher more in recent years than ever before. Certainly 2021 and 2022, that linkage exploded in the media. And so it's as if, in some instances, the bright light of sports is actually shining upon the stains, the dirt in Saudi Arabia's backyard, in autocrats' backyards more generally, even more strongly.
CHAKRABARTI: Interesting. Maybe another example, perhaps not so much a sports washing, but sports distraction. Since you had mentioned Russia, was the 2014 Olympic Games in Sochi. Putin's invasion of Crimea happened at exactly the same time. Right? So, but, you know, given the sort of more mature models that you talked about, of what sportswashing can develop into. I have to ask, how do those steps, how are they different from what the United States does?
Because we have to be honest here, the U.S. is perhaps one of the best in the world at using its teams and its athletes, as, you know, informal and sometimes formal ambassadors for the United States. And, you know, and our so-called values and our abilities, etc. So, people may think, you know, more of Tom Brady than they do of, I don't know, the United States military involvement in pick your country. Do you see what I'm saying? Like, how is it different from what America doe
GANJI: It's such a good point. Sportswashing is an equal opportunity employer. That means that large and small countries alike, autocratic and Democratic ones, advanced, industrialized, vs. emerging economies, they can all sportswash. But what's unique about a context like the United States is that as an open society, versus more of a closed autocratic society, there are certain checks by non-governmental spaces that make sportswashing a really difficult practice to implement.
So let me give you a quick example. In 2015, Senators John McCain and Jeff Flake came out with a report about paid patriotism. Whereby the Department of Defense, over a four-year period had spent at least $10 million on advertisements and marketing at the big five sports leagues. But in particular, the National Football League, to promote its properties and more broadly, its mission. You can easily see that as an instance of sportswashing.
In the midst of these so-called forever wars in Iraq and Afghanistan, to have the Department of Defense trying to, in essence, in effect, distract American audiences from that side of the Pentagon and instead focus on reverence for service and for really cool military equipment, very much fits in the sportswashing mold. But the fact that you had two senators publicizing this through a public report, hearings, a press conference, and you had media outlets reporting on what they called the militarization of sports in America, represents just two ways in which open society ended up quashing those couple hundred DOD contracts with the big five sports leagues to advertise and take their line to the public.
That is a much easier thing to do. Sportswashing, an autocratic context that are absolutist, where you don't have free and fair elections and therefore are not held accountable for bad decisions. Regimes that are client list, so they get to use public funds for private foreign purposes. And paternalistic.
CHAKRABARTI: Okay. So I want to close our conversation by talking about how the United States government is reacting to the PGA-LIV deal. Because as soon as it was announced, Senator Richard Blumenthal of Connecticut was one of the vocal legislators about the need to examine the deal.
RICHARD BLUMENTHAL: The Subcommittee on Investigations, which I chair, is essentially trying to uncover the facts about what went into this deal, who was behind it, and whether there was any improper conduct or wrongdoing, and what the structure and governance will be of the entity going forward. There are very, very few details.
CHAKRABARTI: Now, Sarath, I think we should always scrutinize whenever the government wants to investigate what is ostensibly a private sector deal. But is this different because, you know, the Public Investment Fund from Saudi Arabia actually is a state entity?
GANJI: It is different. Absolutely. And the closest corollary we might, we have to this situation is in 2005, 2006, the Dubai Ports World controversy, where you had legislators shutting down DP World and Emirati multinational from being able to take over a British company, that at the time was managing six major American ports on the East Coast and in New Orleans.
Initially, it was a deal that the Committee on Foreign Investment in the U.S., CFIUS, blessed after Dubai Ports World came to them and asked for approval. It was a deal that a Republican White House blessed. And yet you had huge Republican pushback, as well as Democratic pushback in the Congress.
Within close to a six-month span, the deal was quashed. And it was because ports and maritime security, more broadly, are considered critical infrastructure. Now, at the moment, we might not consider sports critical infrastructure. But going back to what we were discussing regarding this Sunderland, and just the importance of sports to the lifeblood of so many communities around the world, maybe we should be thinking about it as critical infrastructure.
This program aired on June 22, 2023.