Saudi Arabia and sports: What it owns, how much it has invested, and what now?

Saudi Arabia sports investment hits $50 billion as kingdom owns 4 major teams

James Okafor | GlobalBeat

Saudi Arabia has spent more than $50 billion on sports investments since 2018 and now controls four major football teams plus boxing promotions, Formula One races and LIV Golf.

The kingdom’s Public Investment Fund (PIF) completed its 75 percent takeover of Newcastle United in 2021 and launched LIV Golf to compete with the PGA Tour in 2022.

Crown Prince Mohammed bin Salman’s Vision 2030 plan uses sports spending to diversify Saudi Arabia’s oil-dependent economy and boost international tourism. The International Monetary Fund reported the kingdom allocated 2.5 percent of its 2023 budget to sports and entertainment, up from 0.2 percent in 2017.

PIF governor Yasir Al-Rumayyan now sits on Newcastle’s board after the $409 million acquisition transformed the struggling English Premier League club into Champions League qualifiers. “Sportswashing criticisms don’t bother us,” a Saudi government source told reporters last month. “We’re investing for returns and social change.”

Newcastle became the highest-spending club in Europe during the 2023 transfer window at $247 million after PIF cleared financial fair play regulations. The fund also owns majority stakes in four Saudi Pro League teams: Al-Nassr, Al-Hilal, Al-Ittihad and Al-Ahli, signing Cristiano Ronaldo in 2023 and attracting Neymar, Sadio Mané and Karim Benzema for combined wages exceeding $400 million annually.

Anthony Joshua defeated Francis Ngannou in Riyadh’s March boxing match that generated $30 million in ticket sales. Turki Al-Sheikh, adviser to the Royal Court, has promoted 12 major boxing events in Saudi Arabia since 2018 through his General Entertainment Authority. “We want Riyadh to become the global capital of boxing,” Al-Sheikh told reporters ahead of the December Tyson Fury exhibition.

Formula E street races in Diriyah and the Saudi Arabian Grand Prix at Jeddah’s Corniche Circuit represent $900 million in infrastructure investments since 2018. The 2024 F1 contract extension cost $65 million annually through 2027, according to FIA regulatory filings. The Dakar Rally moved to Saudi Arabia in 2020 on a 5-year deal worth $45 million per race.

LIV Golf signed Ian Poulter, Dustin Johnson and Phil Mickelson for guaranteed contracts totaling $600 million in 2022. The breakaway circuit merged with the PGA Tour in June 2023 after PIF’s $3 billion antitrust settlement, creating a for-profit entity controlled by Al-Rumayyan.

Amnesty International calculated $50 billion in recent Saudi sports investments but warns the spending obscures human rights violations. The October 2023 kingdom report documented 100 public executions and ongoing detention of women activists including Loujain al-Hathloul. “Saudi Arabia buys international legitimacy through sport,” Amnesty researcher Dana Ahmed wrote in March.

The Premier League approved Newcastle’s takeover after receiving Saudi government “legally binding assurances” that PIF operates independently of the state. Court documents later revealed Mohammed bin Salman’s September 2021 text message threatening “economic pain” to pressure the league into accepting the bid.

Saudi Pro League attendance increased 58 percent to 32,000 average fans per match in 2023 after Ronaldo and other stars joined. The General Sports Authority reported $8.5 billion in sports tourism revenue last year, targeting 20 million international visitors by 2030.

German shipping company DHL pays $20 million annually to sponsor Formula One’s Saudi Arabian Grand Prix. McLaren and Mercedes declared $35 million and $28 million respectively from Saudi sponsorship deals in 2023, according to team financial statements.

UK Foreign Office documents show officials lobbied for Saudi Arabia’s 2034 World Cup bid during Crown Prince Mohammed’s 2023 London visit. The bid faces minimal competition after FIFA restricted bidding rules to confederations that hosted either the 2018 or 2022 tournaments, effectively eliminating European and Asian rivals.

Boxing promoter Eddie Hearn conducted negotiations with Saudi officials for 14 months before agreeing to stage Anthony Joshua fights in Riyadh. “The money here changes everything,” Hearn told reporters after the kingdom guaranteed $40 million purses for heavyweight title bouts.

Saudi Arabia’s sports investments conclude their fiscal year this month, with PIF expected to announce new target acquisitions in tennis, cycling and Olympic sports sectors.

Background

Saudi Arabia launched its sports investment strategy during the 2016 oil price collapse, when crude revenues dropped from $320 billion to $133 billion annually. Crown Prince Mohammed announced Vision 2030 that year, identifying sports as one of 10 key sectors to reduce oil dependence from 90 percent to 50 percent of revenue.

The kingdom’s first major sports splash came with a 10-year $650 million WWE partnership in 2018 after journalist Jamal Khashoggi’s assassination triggered international protests. The event proceeded despite Western corporate boycotts, establishing Saudi Arabia’s pattern of pursuing sports investments regardless of diplomatic pressure.

What’s Next

FIFA will announce the 2034 World Cup host in December 2024, with Saudi Arabia as the only serious bidder after Australia’s withdrawal. PIF sources said cricket investments totaling $2 billion are planned for 2024, targeting Indian Premier League teams and international broadcast rights as the kingdom seeks to tap South Asian markets.