TEL AVIV, Israel – One of the strangest by-products of the normalization agreement between Israel and the United Arab Emirates so far has been an attempt by a royal emirate to buy Beitar Jerusalem, an Israeli football team with a legacy of racism and hooliganism.
If the deal goes through, a team that has refused to hire Arab soccer players for decades will suddenly get an Arab owner, and Beitar will become an unlikely symbol of the flourishing romance between the two countries.
Questions about the integrity of the offer and a due diligence carried out by the Israel Football Association have suddenly raised doubts about the agreement – and could possibly dampen the euphoria that has shaped the Entente between Israel and the UAE.
Sheikh Hamad bin Khalifa Al Nahyan, who heads a Dubai-based diversified holding company, HBK Department of Projects, last month reached an agreement with Beitar owner Moshe Hogeg for a 50 percent stake in the team, which represents an investment of more than $ 90 million made possible over the next decade. The potential partners have described the agreement as a historic break with Beitar's anti-Arab hiring practices and his openly racist ultra-fan group “La Familia” – and a shining example for the region.
"The deal is intended to show the nations that Jews and Muslims can work together and be friends and live in peace and harmony," Sheikh Hamad told Israeli television in December. Beitar's anti-Arab fans have been "brainwashed".
Beitar is a famous football 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 sport. While Israeli-Arab soccer players were an integral part of the national team and other championship winners, Beitar remained the only opponent on the Israeli scene.
Israeli President Reuven Rivlin, himself a fan of Likudnik Beitar, wrote a letter to Sheikh Hamad saying the deal was a "wonderful result" of the so-called Abraham Accords brokered by the Trump administration last year.
It would have been inconceivable to buy Beitar from an Arab investor before the normalization deal announced last September was signed. The fans regularly sing “Death to Arabs” during the games, harass two Muslim Chechen players who signed in 2013 and have unfolded huge stadium banners with the words “Beitar, forever pure”.
As regional alliances shift, the agreement could have public relations benefits. It follows a two-decade trend among golf companies like Emirates to sign sponsorship deals or own prominent football teams across Europe, including Manchester City in the UK and Paris Saint-Germain in France.
“Owning great football teams around the world has become a way for the Emiratis, Kuwaitis and Qataris to exercise soft power through these prominent and popular sports clubs. If you look at (the Beitar deal), it makes sense because these Gulf countries, which have a lot of money, tend to do diplomacy and business that way, ”said Anshel Pfeffer, a political columnist for the Left-Leaning Israeli Haaretz Newspaper.
"A sports team is often not very profitable, but it generates a lot of PR … and in this case, it's not just any soccer team – it's a soccer team that is close to Likud."
The Israelis have viewed the normalization deal as the first opportunity for close ties with an Arab country – and a strategic blow to Palestinian-led efforts to boycott Israel.
Days before signing the deal in September, Hogeg said he would visit the UAE to look for a partner from the Emirates. He was one of thousands of Israeli tourists and businesspeople who traveled to the country under the normalization agreement. Israeli celebrities posted Instagram stories from their Dubai hotel suites, Orthodox Jews held wedding ceremonies, and venture capitalists held Zoom seminars on investing.
The Beitar investment attracted muted attention in the United Arab Emirates, at least in part because Israeli league football has no international significance and few know of Beitar's great history. In addition, Sheikh Hamad is not a well-known king, analysts said.
“For us (normalization) is down to earth. The UAE are serious. This is business. (Israel) is just another country the UAE is dealing with. The boycott is gone. Normalization is in full swing, ”said Abdulkhaleq Abdulla, former advisor to Crown Prince Mohammed bin Zayed Al Nahyan and professor of political science at the University of the United Arab Emirates.
He described the Abraham Accords as an offer from Abu Dhabi to strengthen regional power and gravity in the UAE.
“A step towards normalization with Israel is only part of it. Sometimes there is a high risk involved, but it is a calculated risk. "
In Israel, not everyone loves the Beitar deal. Some fans threatened Hogeg and staged protests. A Beitar supporter claimed on Israeli television that the agreement would allow the UAE to exercise political influence in Jerusalem. David Rosenthal, sports editor on the Israeli website Walla! News wrote that Hogeg was mainly trying to breathe new life into a team suffering from poor performance and declining attendance.
The deal's biggest hurdle, however, is uncertainty about the financial details: Israeli anti-money laundering experts have already warned of red flags emerging from the deal and raised questions about the source of Sheikh Hamad's finances.
Sheikh Hamad is a little-known member of the Emirates royal family. His holding HBK's website lists companies from agritech to mining to telecommunications equipment. HBK has partnered with cryptocurrency startup GoChain to set up smart greenhouses in the UAE. The holding company has also partnered with Polish cryptocurrency entrepreneur Roman Ziemian, who has been accused of corruption by Polish authorities.
Hogeg bought Beitar in 2018 for $ 7.2 million and its debt and said he would take it on a "new path," including ending its discriminatory hiring policy. But Hogeg, himself a cryptocurrency entrepreneur, is the target of several fraud lawsuits related to its cryptocurrency ventures. A 2019 federal court lawsuit in Washington state accused Hogeg and his start-up Stox Technologies of fraud, breach of contract and using proceeds from the sale of crypto tokens to fund the acquisition of Beitar and a donation to Tel University Aviv.
A spokesman for the Israel Football Association (IFA) said the organization gave Beitar a list of questions and clarification requests regarding the deal at a December 31 meeting. Following the January 6 convocation, IFA released a statement that it could not yet approve the change of ownership because it had not received the information Beitar requested, but added that the review process would continue.
The organization employs a prominent Israeli financial investigator, Megiddo Financial Intelligence, to conduct due diligence. When asked whether the IFA was looking into the possibility of a straw buyer, spokeswoman Shlomi Barzel told Foreign Policy that the IFA was looking at "everything necessary and possible" and predicts that a final decision will be made within two weeks.
The Hogeg and Sheikh Hamad spokesmen did not respond to requests for comment.
If the deal is approved, it is unclear whether Beitar's most ardent supporters would remain loyal. La Familia was also active in right-wing politics, gathering once on behalf of an Israeli soldier convicted of the wrongful killing of a Palestinian who had already been shot and subjugated.
“In Israel, every football is political. In a strange way, this club has made the idea of being a non-Arab or non-Muslim club part of their identity, ”said Maya Zinshtein, a journalist who has opposed an Emmy-winning documentary about Beitar fans and their campaign 2013 produced setting of the Chechen players.
La Familia's campaign at the time damaged the team's image and reduced its revenue – but it made the fan club better known on the Israeli right, she said. "La Familia has this tremendous power in the fan base that they have translated into politics."
Mohammed Baharoon, a Dubai Public Policy Research Center official, said Sheikh Hamad's property offering was a "brave" effort to build influence and bridges in the region, especially given the team's racist history.
“I have to say that the choice of clubs surprised me a bit. … It's the toughest challenge, ”he said. "Across the region, investing in football clubs has always been seen as a means of communication, cultural bridges and soft power."