Thanks to its Public Investment Fund — one of the largest sovereign wealth funds in the world with over $600 billion in assets under management — Saudi Arabia has been dominating the world of sports business over the last few years.
The timing follows Qatar’s recently held FIFA World Cup and appears to capitalize on the increasing regional interest in sports — arguably pioneered by Abu Dhabi’s and Qatar’s investments in soccer giants Manchester City and Paris Saint Germain, respectively.
Reputationally, Saudi Arabia ranks abysmally in human rights, has been highly criticized for the murder of journalist Jamal Khashoggi, is considered one of the unsafest countries from a state abuse perspective, and has even been blamed several times for sportswashing.
But given that Saudi’s immense financial resources — mostly generated from its oil and gas economy — are now flowing toward sports, it is vital for any sports stakeholder to learn the logic and potential consequences of their activities.
We must examine the reasons, timing, and implications for Saudi participation in sports from the lens of the past, present, and future of the Saudi Arabian economy — and how sports are a piece of a bigger puzzle for their strategic growth.
According to Capital Economics, Saudis dominated the oil industry from 1992 to 2013 and once accounted for about 30% of global oil exports — ever since, Saudis have been losing ground to other countries, primarily the U.S. and Russia.
In 2016, Saudi prince Mohammed bin Salman introduced the highly ambitious plan Vision 2030 to create a “vibrant society, a thriving economy, and an ambitious nation.”
Mohammed bin Salman was appointed as chairman and committed to using the Public Investment Fund as a core driver for Vision 2030. The fund grew in value and size, expanding from 50 to 500 employees in the next three years.
Since then, the fund has made strategic investments in innovative companies, including a massive $3.5 billion investment in Uber, a gigantic $2 billion stake in Tesla, and over $1 billion in electric vehicle startup Lucid Group.
The PIF has also been getting its hands around public and private sports properties, but why?
Even though sports is a growing industry with enticing potential, relatively, its investments in sports are peanuts in size and ROI forecast compared with its more extensive investments in other markets.
So what are Saudis really buying with sports properties?
To learn more, check out the Saudi Arabia report here.
ICYMI: Last week, we published a Report about Africa as a rising region in the sports industry. You can access that and all our previous reports on Pro HQ.
