Why Governments Are Betting Big on Sports

The Gulf States and China are spending billions to build stadiums and buy up teams — but what are they really buying? And can an entrepreneur from Cincinnati bring baseball to Dubai?

You could easily spend a lifetime — or 100 lifetimes — simply observing the flow of goods and services (and people) from one part of the world to another. Global trade is endlessly fascinating, in part because it is endlessly changing. One of the most interesting trade sectors at this moment is the world of sports, which involves not just economics but politics, cultural identity, and much more.

On this week's episode of Freakonomics Radio, I spoke to Kash Shaikh, cofounder of Baseball United, which calls itself “the first professional baseball league focused on the Middle East and South Asia.”

The Middle East investment into sport has been unprecedented, whether it’s investing in American franchises and leagues, building grounds and facilities and stadiums, investing in their own national teams and grassroots programs. You’ve got this conglomerate of countries that traditionally, the last 50 years, have been oil, oil, oil. But over the last few years, they’ve really been trying to diversify into tourism and also into sport. There’s basically two billion people in this region, and a billion of them are cricket fans. We had a hypothesis that maybe we could inspire them to fall in love with the game that we love, America’s pastime of baseball.

Baseball United debuted in 2023 with two showcase games at the Dubai International Stadium, which usually hosts cricket. Those games featured former baseball stars including Robinson Canó, who is 42, and Bartolo Colón, who is 52. Baseball United has also organized a regional tournament called the Arab Classic, and the league will return to Dubai this November with a fuller schedule, and their own home.

We made an episode a few years ago called “What Is Sportswashing (and Does It Work)?” That story is by now pretty familiar for anyone who cares about this kind of thing — a country with reputational problems tries to clean things up with the spectacle of sport. What Kash Shaikh is trying to do in Dubai with Baseball United is different: he’s exporting an American sport (and the American sports business model) to try to grab some of those petrodollars on their turf. It’s the ultimate away game.

Kash Shaikh and Baseball United represent a pure business play, an entrepreneur betting big on a new concept in a new market. But he’s an outlier. Most of the global expansion in sport spending involves big financial syndicates or even bigger government funds — as in the governments of other countries. Which means people aren’t just playing games anymore; they’re playing politics.

Here's how Simon Chadwick, a professor of sport, describes the situation:

There are lines drawn across the world of sport right now. We have the Europeans with their socio-cultural view of the world. We have Americans with their very commercial view of the world. And then we have Gulf investors with their very geopolitical view of the world. So we inevitably see a clash of ideology, a clash of culture, a clash of the kind of outcomes that investing in sport is expected to deliver.

And Chadwick says another big player is entering the world of sport from a different direction.

China has been trying, over the last 10 years, to become an infrastructural leader globally. And where we have seen more Chinese stadiums constructed than anywhere else in the world, excepting China itself, is in Africa. If we take as an example the African Cup of Nations, a soccer tournament: In 2024, the championship was hosted by Ivory Coast. Typically, the African Cup of Nations is four stadiums where the games take place. All four were constructed by China. In conjunction with the agreement to construct this infrastructure is strategic partnership, strategic trade agreements, whereby China gets preferential access to the raw materials that these countries have. Or they say, “We’ll build you this stadium, we’ll provide you with loans at less than market rates.” When you can’t pay your loan back, that gives China considerably more political leverage.

Government officials in the U.S. and Europe have called these Chinese tactics predatory, but they also appear to be successful: China is now reportedly Ivory Coast’s biggest trading partner.

You can hear this week’s episode of Freakonomics Radio, “Why Governments Are Betting Big on Sports,” on Apple Podcasts, Spotify, or wherever you listen to podcasts. A full transcript is available on our website.

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