Saudi Arabia and Sports
Saudi Arabia's vision to dominate the global sports ecosystem
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Introduction
When Saudi Arabia unveiled LIV Golf in 2021 and subsequently started luring away top golf talent with astronomical financial offers, sports fans globally were generally enraged, citing “sportswashing”, a country using sports to alter their public perception and cover human rights abuses.
What the average sports fan may not be aware of is that this wasn’t the first sports-related investment that Saudi Arabia has made and won’t be the last. Saudi Arabia and its sovereign wealth fund, the Public Investment Fund (PIF), have highlighted sports as a key focus area for strategic growth and that will allow the country to diversify away its exposure to oil and gas revenue.
Vision 2030 and SRJ Sports Investments
In 2016, Mohammed bin Salman, Crown Prince and Prime Minister of Saudi Arabia, named sports as one of the 13 key focus areas as part of the Public Investment Fund’s Saudi Vision 2030 strategy. Other highlighted sectors include aviation & defense, financial services, healthcare, food & agriculture, consumer & retail goods, real estate, entertainment, transport & logistics, communications, media & technology, service facilities, and renewable energy.
The PIF took their interest in sports one step further in August of 2023 when they created a separate investment company called SRJ Sports Investments (pronounced Surge). The company site states their goal of driving “sustainable, game-changing investments across content, technology, and IP rights – uplifting our sports sector today and tomorrow, in Saudi Arabia and across the MENA [Middle East and North Africa] region.” They plan on doing this through a.) acquiring and creating new sports events IP, b.) obtaining commercial rights for existing properties, and c.) hosting major sporting events in Saudi Arabia.
SRJ brought on Danny Townsend as CEO to lead these efforts, who had previously been with the Australian Professional League and has 26 years of sports industry experience.
The country is well on its way to achieving this mission, with over $10B invested in soccer, golf, Formula 1, WWE, and boxing. Below are some of the specific investments and partnerships that the nation has made.
Investment Portfolio
Soccer
Given soccer’s global reach, it shouldn’t be a surprise that this is a sport that Saudi Arabia has been heavily involved in at the club, league, player, and event levels. Starting with clubs, below is a sample of the various teams that the PIF or Saudi nationals have bought directly into:
Newcastle United: PIF owns 80% of the Premier League Club
Sheffield United: Prince Abdullah bin Masaid al Saud acquired a 50% stake in the team in 2013 and the remaining 50% in 2019.
KFCO Beerschot (Belgium): PIF owns 50%
Al Hilal United (Dubai): PIF owns 100%
Kerela United (India): PIF owns 100%
La Berrichone de Chateauroux (France): PIF owns 100%
Al Nassr (Saudi Arabia): PIF owns 100%
Al Hilal (Saudi Arabia): PIF owns 100%
Al Ettihad (Saudi Arabia): PIF owns 100%
Al Ahli (Saudi Arabia): PIF owns 100%
UD Almeria: Turki bin Abdul Mohsen Al Al-Sheikh bought the Spanish team in 2019
In addition to direct ownership of teams, Saudi Arabia has looked to be center stage for numerous soccer-related events, including a bid to host the 2034 World Cup and the 2027 AFC Asian Cup. They currently host the Serie A Italian Super Cup and the Spanish Super Cup.
In 2017, Manchester United signed a 5-year strategic partnership with Saudi Arabia’s General Sports Authority to serve as advisors for the Saudi Vision 2030 strategy.
Additionally, similar to LIV Golf, Saudi Arabia has used its financial leverage to lure away top international soccer talent to play in their domestic professional leagues. The Saudi Ministry of Sport has set an explicit goal of attracting up to 50 international soccer stars to the Saudi Premier League. Below are a few that they have already signed into the league.
Christiano Ronaldo – Al Nassr, $75M per year
Neymar – Al Hilal, $100M per year
Karim Benzema – Al Ittihad, $107M per year
Roberto Firmino - Al-Ahli, $22M per year
N’Golo Kante - Al Ittihad, $109.78 per year
Kalidou Koulibaly - Al Hilal, $21.6M per year
Ruben Neves - Al-Hilal, $19M per year
Marcel Brozovic - Al Nassr, $19.63M per year
Gabri Veiga - Al-Ahli, $14.3M per year
Riyad Mahrez - Al-Ahli, $39.2M per year
Sadio Mane - Al Nassr, $43.5M per year
Aleksandar Mitrovic - Al Hilal, $19M per year
Important to note, in addition to massive deals in absolute figures, the earnings in Saudi Arabia don’t have any income tax, compared to ~47% most would be paying if staying in the Premier League in England and comparable rates in other major professional leagues.
Formula 1
Saudi Arabia has had a long fascination with Formula 1, well before the rest of us jumped on board as we watched Drive to Survive during COVID lockdowns. In 1977, the Williams Formula One team secured a long-term partnership with Saudi state-owned airline Saudia.
In 2020, ARAMCO secured a long-term partnership with Formula 1 as a presenting sponsor.
In 2021, Saudi Arabia hosted its first race, the Saudi Arabia Grand Prix, which will bring Formula 1 more than $55M annually over 10 years.
Lastly, the PIF previously held a direct ownership stake in the McClaren Racing F1 team and currently owns ~20.5% of the Aston Martin F1 team.
Tennis
Saudi Arabia has long been rumored to be eyeing US-based professional tennis circuits, and just a few days ago, on March 12th launched a formal $2B bid to purchase and merge the major men’s (ATP) and women’s (WTA) tours. The acquisition would exclude the Grand Slam tournament but still significantly reshape the face of professional tennis.
Joe Pompliano gave a great breakdown in one of his most recent newsletters, explaining why Saudi Arabia would be looking at professional tennis, saying, “the economics [of tennis] are very similar to golf – a globally recognized sport with thousands of competitors paying out of pocket for training and travel, and they only make money if they perform well.”
Whether or not this deal goes through, Saudi Arabia has already invested actively in the sport, including purchasing or launching the Miami Open Tennis Tournament, the Madrid Open Tennis Tournament, the Diriyah Tennis Cup, and the under 21 Next Gen ATP Finals.
Golf
Beyond LIV Golf, Saudi Arabia has invested in hosting both male and female golf tournaments:
Saudi International Golf Tournament: The country won a bid to host a golf tournament sanctioned by the DP World Tour in 2019. The annual men’s tournament still continues today.
Aramco Saudi Ladies International Golf Tournament: In 2020, they debuted the inaugural ladies’ tournament, which continues today.
The relationship between LIV and the PGA tour got even more complicated in June of 2023 when the PGA announced an alliance with the DP World Tour and PIF to merge the entities after months of attacking the players who had jumped from the PGA Tour to LIV. Whether or not this deal materializes is yet to be seen, but in the interim LIV Golf continues to attract top talent, most recently with Jon Rahm leaving to play on LIV late in 2023 for a reported $500M.
Combat Sports
Combat sports were one of the first ways that Saudi Arabia and the PIF began investing in global sports properties, with the WWE being the main target. In 2013, the WWE signed its first agreement to host three events in Saudi Arabia. An Arabic-language WWE program was rolled out in 2017, and the partnership was expanded in 2018, with a 10-year deal to host multiple events in the country at an estimated value to the WWE of $50M per year.
Boxing, too, has a long history in Saudi Arabia, primarily through luring top title fight matches. In 2018, the country hosted its first Super Middleweight title fight between Callum Smith and George Groves in Jeddah. They have also hosted more recent heavyweight titles with more recognizable names, including Anthony Joshua vs. Andy Ruiz, Tyson Fury vs. Francis Ngannou, and Anthony Joshua vs. Oleksandr Usyk. Just recently, on March 8th, Anthony Joshua scored a second-round KO on MMA crossover Francis Ngannou in Riyadh.
They have also got into the recent trend of celebrity-fueled boxing matches, hosting the Jake Paul vs. Tommy Fury fight in February of 2023.
Completing the combat sports trifecta, Saudi Arabia has also set its sights on mixed martial arts, both through hosting events and investing in their own league. In June 2024, the UFC is expected to have its first major event in the country. This decision could be a direct result of SRJ Sports Investments’ $100M direct investment into the competing merged entities, Bellator MMA and the Professional Fighters League (PFL).
Other Sports Properties
Beyond the major sports listed above, there are early rumors of other sports properties that Saudi Arabia is looking to get involved in. There is a possible $268M investment into an emerging cycling league that will have a mix of new and established European races, along with a potential $5B investment into the Indian Premier League (IPL), the largest cricket league in the world.
Takeaways
Whatever the true motives, the reality of the situation is that Saudi Arabia will be heavily involved in our global sports ecosystem for years to come. As long as the oil wells are pumping, private entities will not be able to compete financially with a sovereign wealth fund with seemingly unlimited resources. Leagues may put up barriers to prevent direct ownership of teams by sovereign entities, but ultimately as we saw with LIV Golf, Saudi Arabia has the experience to create their own leagues and the financial withwithal to entice top talent.
It’s easy to place the blame on the players who are jumping ship to Saudi-backed leagues and teams for a quick pay-day, but it’s not always that simple. On the one hand I do think athletes need to take responsibility for the source of their earnings, just as all of us do. On the other hand, athletes have a limited career window to earn the bulk of their lifetime salary, and so should generally be encourgaed to maximize their potential while that window is still open. The reality is that beyond Saudi Arabia, there are numerous other existing teams and leagues that have ownership groups with ties to questionable organizations or countries with similar human rights abuses.
There’s really no ideal solution to prevent Saudi Arabia's involvement in the global sports ecosystem because it’s a losing proposition to try and fight dollar for dollar. What I’m hopeful for, though, and maybe this is a pie-in-the-sky vision, is that sports can be used as a driver of societal change in Saudi Arabia. Rather than using sports as a cover-up for human rights abuses, could sports instead serve as a conduit for communication, moderation, and change within the country itself?
Excellent review!