Saudi Arabia plans to launch a multi-billion dollar investment company to expand its sports interests after gaining traction in golf and achieving success in English football, according to two individuals familiar with the matter. According to the newspaper "Trika Kora," the sports group, which will be part of the kingdom's sovereign wealth fund, will have a war chest to finance its expansion, indicating that Riyadh is committed to making further acquisitions, investments, and joint projects in football, tennis, and other sports.
The Public Investment Fund (PIF), valued at $650 billion, has made a series of sports investments in recent years, showcasing its financial strength in a sector disrupted by the COVID-19 pandemic. An individual familiar with the PIF's strategy stated, "After the World Cup, there was definitely a sense of optimism for investing in global sports," adding, "It was driven by the fact that Qatar did well, and Saudi Arabia's performance in the World Cup. There was a noticeable shift in how they viewed global sports."
Simon Chadwick, a professor of sports and geopolitical economics at SKEMA Business School in Paris, noted that Saudi Arabia's rush into sports is not, in some ways, "something new," drawing comparisons to previous investments by Qatar and Abu Dhabi. However, he added that the "scale and speed" of sports spending is unprecedented, potentially leaving a lasting impact across the sector. He said, "Saudi Arabia is now shaping the commercial, industrial, and geopolitical networks of sports." "They have begun testing the limits of rules and governance."
The sovereign fund is chaired by Saudi Crown Prince Mohammed bin Salman, who tasked the PIF with steering his country's economic reform plan, increasingly focusing on targeted sectors including sports as part of the sovereign wealth fund. Yasser Al-Rumayyan, governor of the PIF, is set to lead the partnership between LIV and PGA, which still faces significant opposition among U.S. lawmakers. He also chairs Newcastle United, the English football club purchased by the sovereign wealth fund in 2021. The team, which was struggling at the time of acquisition, finished fourth in the Premier League last season, qualifying for the UEFA Champions League, the largest European competition.
Neither LIV Golf nor Newcastle United will fall under the oversight of the new company, according to an individual familiar with the matter, who said it will focus on new opportunities. The company's launch coincides with the PIF's confirmation of a larger role in the kingdom's football ambitions, which include bolstering local clubs. This year, the country attracted late-career football stars, including Cristiano Ronaldo and Karim Benzema, to its national league with lucrative contracts while also scouting younger players. The PIF recently announced it would acquire four of the largest local football clubs.
The Financial Times reported last month that the sovereign fund also held talks with the men's tennis tour, the ATP, regarding potential events and investments. The PIF has sought to make these sectors central by creating national champions to oversee strategy and investments. The new sports company could adopt the same approach that the PIF has taken with the gaming industry through its subsidiary investment firm Savvy. The company, led by Prince Mohammed, has a war chest of $38 billion and has spent nearly $8 billion on acquisitions over the past eighteen months.
