Saudi Arabia Continues to Make Waves in the Sports World

On July 5, 2023, it was announced that Saudi Arabia is going to create a multibillion-dollar investment company that will “expand its sports interests.”[1]

Saudi Arabia has been accused of using its investment in sports to distract the public from their poor record on human rights, which continues to be called into question. This act is known as “sportswashing.”

Saudi Arabia’s sportswashing has its roots in horseracing. Prince Khalid bin Abdullah Al Saud, a member of the Saudi Arabian royal family, started buying racehorses in 1977 with funds coming from the royal family.[2] From there, he acquired breeding farms in Berkshire, and started the horseracing juggernaut, Juddmonte Fams, Inc.[3] Prince Khalid ran the venture until his death in 2021.[4]

Saudi Arabia began heavily investing in a wide array of sports starting in the late-2010s. On April 25, 2016, Saudi Arabia announced a plan called “Saudi Vision 2030,” which promised to diversify Saudi Arabian investments and set goals for the policy through 2030.[5] A large part of Saudi Vision 2030 was to use the Saudi Public Investment Fund (PIF) to invest in sports to boost the economy.[6]

In 2020, Prince Khalid oversaw the start of the Saudi Cup, a now annual horseracing event held in Saudi Arabia.[7] The event continues to be the highest paying horseracing event ever.[8] The large sums of money that Saudi Arabian sporting events payout is a large draw for many of the competitors partaking in different sporting events.

While critics of these events cite the human rights violations committed by the Saudi Arabian government, high profile athletes are drawn to the events by their incredible payouts.[9] There are some athletes who may have protested slight pay raises when considering Saudi Arabia’s human rights track record, but the pay raises they do receive are so substantial that athletes have a hard time refusing them. When high profile athletes get involved, eyes are drawn to the events, which is evidence that Saudi Arabian sportswashing is working in their favor.

In April 2018, they signed a deal with the WWE worth $100 million a year where the country would host two events each year for 10 years.[10] In December 2019, Saudi Arabia hosted a fight for the heavyweight boxing title, which paid out $60 million, and they hosted a tennis tournament which featured some of tennis’s biggest names.[11]

Throughout the 2020s, the PIF has heavily invested in Formula 1 racing, soccer, and golf.[12] The national oil company hosted a Formula 1 event in December 2021, and the PIF purchased 17 percent of the Formula 1 franchise Aston Martin in July 2022.[13]

In October 2021, the PIF purchased Newcastle United of the English Premier League. The PIF purchased a number of teams in the Saudi Pro League (SPL), where teams have been signing massive deals with international superstars, like Cristiano Ronaldo and Karim Benzema.[14]

LIV Golf was another venture that the PIF launched in 2021, which concluded in June 2023, with a lucrative merger with its main rival, the PGA Tour.[15] LIV Golf offered massive payouts and signing bonuses to the most notable golfers in the world and competed with the PGA Tour in a way that has never been done before.[16] The merger is under investigation by the US government as to Saudi Arabia’s involvement in the newly formed golf conglomerate.[17]

With the merger being finalized, the PIF has seen just how successful its sports investments have been, especially with its efforts to clean up Saudi Arabia’s image. It has now started its multibillion-dollar investment company with a “war chest to fund its expansion,” and looks to target “soccer, tennis, and ‘other sports.’”[18]

Many have speculated that the PIF will try to invest in American football.[19] The NFL seems to have a monopoly on professional football, outlasting every league boasting to be its newest competitor.[20] However, LIV Golf’s success at breaking into the monopoly that the PGA was thought to have over professional golf means that a run at American football is in the realm of possibilities. With the NFL being the most profitable of the “big four” North American sports leagues, investments into football could be very lucrative for the PIF. With seemingly endless amounts of money to draw athletes and viewers to their sports, Saudi Arabian football might be on the horizon.

As Saudi Arabian investments continue to trend towards sports, successful leagues should be ready for stiff competition into their markets.

[1] https://www.sportsbusinessjournal.com/Daily/Closing-Bell/2023/07/05/saudi-arabia-sports-investment-group.aspx

[2] https://web.archive.org/web/20071010195813/http://www.ntra.com/stats_bios.aspx?id=1942

[3] https://juddmonte.com/history

[4]Id.

[5] https://www.reuters.com/article/us-saudi-plan-idUSKCN0XL0B2; https://www.theguardian.com/environment/2021/oct/29/apocalypse-soon-reluctant-middle-east-forced-to-open-eyes-to-climate-crisis

[6] https://www.tbsnews.net/sports/vision-2030-saudi-arabias-master-plan-use-sports-boost-their-economy-645254

[7] https://www.horseracingnation.com/news/On_everyones_radar_How_will_the_Saudi_Cup_field_be_set_123

[8] https://www.cfr.org/in-brief/saudi-arabias-investments-raise-questions-sportswashing

[9]Supra n.7.

[10]Supra n.8.

[11]Id.