Red Card for Emirati Royal’s Soccer Diplomacy?

TEL AVIV, Israel—One of the oddest byproducts of the normalization deal between Israel and the United Arab Emirates so far has been an attempt by an Emirati royal to buy Beitar Jerusalem, an Israeli soccer team with a legacy of racism and hooliganism.

If the deal goes through, a team that for decades refused to hire Arab soccer players would suddenly get an Arab owner, and Beitar would become an unlikely symbol of the flowering romance between the two countries.

But questions about the integrity of the bid and a due-diligence probe conducted by Israel’s soccer federation have suddenly raised doubts about the agreement—and could potentially dampen the euphoria that has characterized the entente between Israel and the UAE.

Sheikh Hamad bin Khalifa Al Nahyan, who runs a Dubai-based diversified holding company, HBK Department of Projects, reached an agreement last month with Beitar owner Moshe Hogeg for a 50 percent stake in the team in return for an investment of more than $90 million over the next decade. The would-be partners have framed the agreement as a historic break with Beitar’s anti-Arab hiring practice and its openly racist ultra-fan group, “La Familia”—and a shining example for the region.

“The deal is [meant] to show the nations that the Jewish and the Muslim can work together and be friends and live in peace and harmony,” Sheikh Hamad told Israeli television in December. Beitar’s anti-Arab fans, he said, have been “brainwashed.”

Beitar is a storied soccer team with historical ties to Prime Minister Benjamin Netanyahu’s Likud party and a fan base that includes masses of Israelis for whom right-wing politics are as tribal as sports. While Israeli Arab soccer players have been integral to the national team and other championship winners, Beitar has remained the lone holdout in the Israeli scene.

Israeli President Reuven Rivlin, himself a Likudnik Beitar fan, wrote a letter to Sheikh Hamad declaring that the deal was a “wonderful outcome” of the so-called Abraham Accords, which the Trump administration helped broker last year.

For Beitar to be bought by an Arab investor would have seemed unimaginable before the normalization deal announced last September. Its fans regularly chant “Death to Arabs” during games, harassed two Muslim Chechen players signed in 2013, and have unfurled giant stadium banners reading: “Beitar, forever pure.”

But with regional alliances shifting, the deal could have public relations benefits. It follows a two-decade trend among Gulf business entities, such as Emirates airline, of signing sponsorship deals or becoming owners of prominent soccer teams across Europe, including Britain’s Manchester City and France’s Paris Saint-Germain.

“Owning big football teams around the world has become a way for the Emiratis, the Kuwaitis, and the Qataris to have soft power through these prominent and popular sports clubs. When you look at [the Beitar deal], it makes sense because that is the way that these countries in the Gulf, which have a lot of money, tend to do diplomacy and business,” said Anshel Pfeffer, a political columnist for the left-leaning Israeli Haaretz newspaper.

“A sports team often isn’t very profitable, but it generates a lot of PR. … And in this case, it’s not just any football team—it’s a football team which is close to Likud.”

Israelis have embraced the normalization deal as the first opportunity for warm ties with an Arab country—and a strategic blow to Palestinian-led efforts to boycott Israel.

Days before the September signing of the deal, Hogeg said he would visit the UAE to search for an Emirati partner. He was one of thousands of Israeli tourists and businesspeople who traveled to the country in the wake of the normalization deal. Israeli celebrity singers posted Instagram stories from their Dubai hotel suites, Orthodox Jews held wedding ceremonies, and venture capitalists conducted Zoom seminars on investment.

 The Beitar investment received muted attention in the UAE, at least in part because Israeli league soccer lacks international prominence and few are aware of Beitar’s bigoted history. Moreover, Sheikh Hamad is not a well-known royal, analysts said.

“For us [normalization] is down to earth. The UAE is serious. This is business. [Israel] is just one more country that the UAE deals with. The boycott is gone. Normalization is in,” said Abdulkhaleq Abdulla,  a political science professor at UAE University.

He described the Abraham Accords as a bid by Abu Dhabi to boost the UAE’s regional power and gravitas.

“Taking a step toward normalization with Israel is just part of this. Sometimes there is a lot of risk associated with it, but it’s a calculated risk.”

In Israel, not everyone loves the Beitar deal. Some fans have made threats against Hogeg and staged protests. One Beitar backer claimed on Israeli television that the deal would enable the UAE to wield political influence in Jerusalem. David Rosenthal, a sports editor at the Israeli website Walla! News, wrote that Hogeg was mainly trying to breathe new life into a team that has been suffering from poor performance and declining attendance.

But the deal’s main hurdle is the uncertainty surrounding the financial details: Israeli anti-money laundering experts have already warned about red flags arising from the agreement and raised questions about the source of Sheikh Hamad’s finances.

Sheikh Hamad is a little-known member of the Emirati royal family. The website for his holding company, HBK, lists businesses from agritech to mining to telecommunications equipment. HBK has a partnership with the cryptocurrency start-up GoChain to establish smart greenhouses in the UAE. The holding company has also partnered with the Polish cryptocurrency entrepreneur Roman Ziemian, who has been accused by Polish authorities of corruption.

Hogeg bought Beitar in 2018 for $7.2 million and its debt and declared that he would put it on a “new path,” including halting its discriminatory hiring policy. But Hogeg, himself a cryptocurrency entrepreneur, is the target of multiple fraud lawsuits concerning his crypto-ventures. A 2019 suit by a federal court in Washington state charged Hogeg and his start-up, Stox Technologies, with fraud, breach of contract, and using proceeds from crypto-token sales to finance the acquisition of Beitar, as well as a donation to Tel Aviv University.

A spokesperson for the Israel Football Association (IFA) said the organization gave Beitar a list of questions and clarification requests regarding the deal at a Dec. 31 meeting. After reconvening on Jan. 6, the IFA released a statement that it could not yet approve the ownership change because it had not received the information requested from Beitar but added that the vetting process would continue.

The organization is employing a prominent Israeli financial investigator, Megiddo Financial Intelligence, for the due-diligence review. Asked if the IFA was investigating the possibility of a straw buyer, spokesperson Shlomi Barzel told Foreign Policy that the IFA was checking “everything that is necessary and possible” and predicted that a final decision would be made within two weeks.

Spokespersons for Hogeg and Sheikh Hamad did not respond to requests for comment.

If the deal is approved, it’s unclear whether Beitar’s most ardent supporters would remain loyal. La Familia has also been active in right-wing politics, at one point rallying on behalf of an Israeli soldier convicted of wrongfully killing a Palestinian who had already been shot and subdued.

“All soccer is political in Israel. In a strange way, this club made this idea of being a non-Arab or a non-Muslim club part of their identity,” said Maya Zinshtein, a journalist who produced an Emmy-winning documentary on Beitar fans and their campaign against the 2013 hiring of the Chechen players.

La Familia’s campaign at the time hurt the team’s image and cut into its revenue—but it made the fan club more prominent on the Israeli right, she said. “La Familia has this enormous power in the fan base, which they translated into politics.”

Mohammed Baharoon, a fellow at the Dubai Public Policy Research Centre, said the ownership bid by Sheikh Hamad is a “courageous” effort to build influence and bridges in the region, especially given the team’s racist history.

“I must say I was a bit surprised by the choice of clubs. … It’s the toughest possible challenge,” he said. “But, across the region, investment in football clubs has always been seen as a way of communication, cultural bridges, and of soft power.”