Saudi Arabia has greatly expanded its investment in sports over the last five years. While some outside observers have seen this investment as mainly an exercise in public image management, the reality is that the sports sector is also an area of economic growth globally.
As Saudi Arabia continues its mission to diversify its economy, investing in sports is a wise move financially. The move has additional benefits at the level of social transformation and supports the growth of other related sectors in the Kingdom, from hospitality to tourism to entertainment.
Strategic investment
Many Saudi state entities, including Aramco, sponsor sports, but the Kingdom’s main investor in sports is its sovereign wealth fund, the Public Investment Fund (PIF). Last year, the PIF set up a distinct authority called SRJ Sports Investments.
SRJ’s strategy is to create new sports events in Saudi Arabia, which would attract domestic and international audiences, buy the commercial rights for existing sports championships, and get Saudi Arabia to host international sports events, like the hosting of the boxing match between Tyson Fury and Oleksandr Usyk in Riyadh on 18 May.
While SRJ is focused on developing the sports sector in Saudi Arabia itself, the PIF has other international investments, such as its purchase of Newcastle United and investment in LIV Golf. Both the domestic and international investment tracks are needed to accelerate growth in the sports sector, but the PIF’s approach to both is through an international lens. The idea is for Saudi Arabia to develop the domestic sporting scene by bringing international ventures and talent to Saudi Arabia.
Saudi Arabia is not the only Gulf country that has pursued such an approach. Bahrain was the first country in the region to host Formula 1 and has been doing that for two decades. Qatar has also hosted its own Grand Prix and the FIFA World Cup 2022. But Saudi Arabia surpasses its neighbours in the scale of its investments and the diversity of its sports investment portfolio. Forbes estimates that since 2021, Saudi Arabia has spent at least $6.3bn on sports deals.
Football, golf, combat sports, tennis
Saudi investment in football has already seen the country successfully bid for the 2034 FIFA World Cup. In 2027, the Kingdom is set to host the Asian Cup. Saudi Arabia has a head start in football because the country has a world-class national football team and a vibrant Saudi Pro League. This translates into an active domestic audience and a national infrastructure that the country is building on rather than having to build from scratch.
This infrastructure is already accelerating growth in the sector and yielding results, such as the successful hosting of the 2023 Club World Cup and the buying of international players to play in Saudi clubs.
But the scale of needed investment remains huge. Deloitte estimates that in the 2023 summer transfer window, net transfer spending in Saudi Arabia ($907mn) was second only to the net transfer spending in the English Premier League, which was $1.39bn. In preparation for the 2034 World Cup, Saudi Arabia is set to become FIFA’s biggest sponsor, paying the footballing body $100mn a year.
Saudi Arabia is bound by complicated international football governance structures which limit what any country can do in that field. But other sports sectors offer different opportunities. In 2021, Saudi Arabia transformed the world of golf by creating a new international competition called LIV Golf, which is in the process of merging with former golf rival tournament PGA Tour under a new entity.
Combat sports is another arena in which Saudi Arabia is making a mark. The SRJ has invested $100mn in the Professional Fighters League, a mixed martial arts organisation. With regard to boxing, the time zone in Saudi Arabia is proving to be friendlier to audiences in Europe who used to watch boxing matches in Las Vegas in the early morning hours.
Riyadh is fast becoming a destination for showcase matches, with Riyadh set to host a much anticipated light-heavyweight match between Artur Beterbiev and Dmitry Bivol. Recognising the level of publicity that hosting big names in boxing would bring, Saudi Arabia is also funding boxing events abroad in places like Los Angeles and London.
Saudi Arabia’s latest major sporting venture is into tennis. The PIF has signed an agreement with the Women’s Tennis Association (WTA), becoming the latter’s first-ever naming partner for WTA Rankings. This follows the PIF’s agreement signed in February with the Association of Tennis Professionals (ATP), through which the PIF has also become a naming partner for PIF ATP Rankings.
Business goals
Through all those ventures. Saudi Arabia is pursuing a multitrack set of goals. Investing in sports is a major tool of job creation, not just in the sector itself but also in related sectors like tourism and hospitality.
Attracting top international talent to Saudi Arabia, whether in residence or to play in high-profile matches, attracts global visitors who want to see those stars in action. Investing in domestic infrastructure, such as training compounds and schemes, empowers the young generation of athletes in Saudi Arabia and accelerates their development according to global standards.
