SAUDI ARABIA is mooting the idea of launching a multibillion-dollar investment company to expand its sports interest, according to a report in Financial Times.
This follows the country setting up its own golf league in 2022 to compete with the PGA Tour. The new investment company could see money being pumped into sports such as soccer and tennis and other sports, the report said.
The PGA Tour had agreed to merge with rival LIV Golf, which is backed by the Saudi Arabia Public Investment Fund, an entity controlled by Saudi Crown Prince Mohammed bin Salman. The proposed merger came after the PGA Tour and LIV Golf have been embroiled in lawsuits regarding antitrust claims. The deal would be ending all pending litigation, and the PGA Tour Commissioner Jay Monahan had acknowledged he would be called a hypocrite and said he accepted the criticism.
In 2021, the sovereign wealth fund bought English football club Newcastle United, and Jeddah will be hosting the second F1 race in the 2024 calendar.
Superstar footballer, Cristiano Ronaldo, recently moved to Riyadh club Al-Nassr through a massive financial deal. The impact of this move resulted in a 15x increase in the club’s social media followers and broadcast rights of the Saudi league being sold to 36 overseas territories.
Citing people with inside knowledge of the matter, the FT said that the Kingdom’s Public Investment Fund (PIF) will be given substantial funding to add to its growing list of sporting assets.
No timescale or size of investment fund available to the future sports company were released, but the FT report said it would be provided a “war chest” to make significant acquisitions. Media reports in Europe have mooted possible investments in the NBA and NFL.
Saudi sports investments
In recent years Saudi Arabia has invested heavily in gold, football and F1 motorsports. In addition, the Kingdom has hosted WWE events and is home to the world’s richest horse race.
Through a state-backed investment company Saudi Arabia would be able to invest heavily in more sports.
Last week the governing body of men’s tennis, the ATP, said that it had held high-level discussions with PIF about potential partnerships, sponsorship options and investment.
Last week the governing body of men’s tennis, the ATP, said that it had held high-level discussions with PIF about potential partnerships, sponsorship options and investment.
An anonymous source quoted in the FT said Saudi Arabia is stepping up sports investment following the success of Qatar’s hosting of the FIFA World Cup in 2022.
They said: “After the World Cup there’s definitely been a sense of bullishness to invest in global sports. It was driven by the fact that Qatar did it so well, and Saudi Arabia’s performance in the World Cup.
“There’s been a noticeable sea change in how they look at global sports.”
Although existing high-profile investments in sporting assets, notably LIV Golf and ownership of Newcastle United Football Club in the English Premier League, also fall under the banner of PIF ownership, the new sport company would be separate to these ventures.
The FT report highlighted how PIF gave a $38bn investment fund to its Savvy Games Group to go out and make major investments in eSports and gaming.
Since it launched, Savvy has been splashing the cash and snapping up some of the biggest names in gaming. In April it acquired US games firm Scopely for $4.9bn.
According to reports in the Guardian and Marca newspapers Saudi Arabia could be looking to invest in the NFL or NBA.
Last year the National Basketball Association (NBA) voted to allow sovereign wealth funds and pensions to acquire stakes in teams in the league and the sport is popular in the Kingdom, Middle East and around the world.
