More Saudi-backed mega-deals likely as sports push intensifies

Reuters/Ahmed Yosri

• Saudi’s sports sector saw investment of $270m last year
• Kingdom won bids to host the Asian Cup and Asian Games
• It aims to have sports contribute 1 percent of GDP by 2030

Saudi Arabia is likely to follow up its acquisition of Premier League football club Newcastle United with more headline-grabbing deals abroad as the kingdom sees investments soar in its fledgling sports sector, say experts.

Investment deals in Saudi Arabia’s sports sector reached SR1 billion ($270 million) last year and are expected to create 1,500 new job opportunities in the kingdom.

According to new data released by the Ministry of Investment, sports investment licences also grew by 319 percent to a total of 67 in 2022 as the kingdom aims to create a sector worth $10 billion by 2030, based on projections that the economy would exceed $1 trillion last year.

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The figures follow the arrival last month of superstar Cristiano Ronaldo, who was officially revealed as an Al Nassr player.

Ronaldo joined the Saudi Pro League in a deal that will run until 2025 and is expected to earn him over $200 million a year, making him the highest paid football player in the world.

Analysts told AGBI that the investment appetite for Saudi Arabia’s sports sector is likely to remain strong, while it is probable that more major deals overseas will be struck this year.

Simon Chadwick, professor of sport and geopolitical economy at Skema Business School in Paris, highlighted the “economic impact of Ronaldo”, with Al Nassr shirts selling in large volumes, and with demand for match tickets remaining buoyant. 

But he added: “Yet Ronaldo – in fact individual athletes in general – are necessary but insufficient to sustain growth in Saudi Arabia’s sport economy.

“The country’s broader sports strategy is important, which means that Ronaldo is but one element of a plan that also includes event hosting, tourism and infrastructural developments.”

Asked if Saudi Arabia would be looking to make more sports acquisitions abroad, he said: “Undoubtedly. There are rumours that further football club acquisitions are imminent, and that Saudi Arabia is even trying to buy Formula 1. 

“Plus, there’s a growing feeling that government in Riyadh is about to announce a bid to stage the 2030 Fifa World Cup.

“It is also telling that the country’s sovereign wealth fund – Public Investment Fund (PIF) – has recently established a specialist sports division aimed at growing global investments in sport.”

Ben Gordon, a sports diplomacy expert at London-based Dentons Global Advisors, said: “I expect Saudi Arabia to continue to look for opportunities this year, especially with PIF bringing assets to the kingdom, like it did with Newcastle’s winter training camp during the World Cup.”

He added: “There were reports in January that PIF was close to acquiring the wrestling promotion WWE. While WWE denied these reports, that’s indicative of the type of deal the PIF will look for – a major international brand that will build Saudi’s global cultural relevance and also allow for hosting major events in the kingdom.”

Key achievements of the Saudi sports sector so far include winning the bid to host the Asian Cup in 2027, the Asian Indoor and Martial Arts Games in 2025 and the Asian Games in 2034.

It also hosted its first Formula 1 race in 2021 and some of the world’s biggest boxing events.

The kingdom has also launched the first Saudi women’s football league, while increasing the number of sports clubs to 170.

On the field, Saudi Arabia has also made headlines with the success of its national team at the Fifa World Cup in Qatar.

Gordon added: “Investment growth will continue, but I wouldn’t look at it as a result of the Ronaldo deal. Rather, the Ronaldo deal is indicative of the kingdom’s massive investment ambitions in sports.

“These existed before he joined Al Nassr and will continue as one of the national social and economic priorities under Vision 2030.”

Future plans

Under Vision 2030, the kingdom aims to grow its sports sector contribution to GDP from 0.1 percent in 2017 to 1 percent by the end of the decade.

In the same period, Saudia Arabia is also aiming to increase the number of athletes its sends to the Olympic Games to 50 from the seven sent to Rio de Janeiro in 2016.

Both Chadwick and Gordon said Saudi’s focus on the sports sector is part of the wider efforts to diversify its economy, while also projecting soft power and addressing public health issues such as obesity.

The Saudi Sports for All Federation initiative aims to develop community sports and programmes to increase physical activity levels in Saudi Arabia to 40 percent by 2030.

Several events have already been launched, including Riyadh Marathon 2023, Jeddah Tough Mudder 2023 and SandClash 2023. 

Last month, Saudi Crown Prince Mohammed bin Salman launched a fund that aims to position the kingdom as a global hub for sports events.

The Events Investment Fund (EIF) will conceptualise, finance and oversee the development of more than 35 venues by 2030, including indoor arenas, horse racing venues and auto tracks.

The EIF is part of plans to transform the country into a global tourist destination, with the goal of attracting more than 100 million visitors by 2030.