Introduction
Saudi Arabia have been the focal point of the biggest news stories across the sport and entertainment sector of late, appearing to acquire a sporting empire in the Gulf state. A nation with a significant proportion of its wealth generated through oil and fossil fuels, they have been investing heavily into sports, entertainment, tech and real estate.
The state-controlled oil company, Aramco, produces more than 10 million barrels of crude oil per day which has led to a reported profit of $160 billion for the year of 2022. That’s $441 million in profit every single day, or $316,000 in profit every single minute, and it was the highest-ever recorded annual profit by a publicly listed company.
Sport in Saudi Arabia
Boxing
The sporting industry of Saudi Arabia is really starting to develop into what could soon become the new home for global sport. The country really wants to emphasize the message of how influential and life changing sport can be for the younger and older generations in Saudi Arabia. As part of this initiative, those in positions of power including the Crown Prince and his Royal Highness Prince Mohammed bin Salman, have created and implemented the national reform programme, Vision 2030.
Significant financial incentive has been a large driver to the influx of global sporting events taking place in the Gulf state; the hosting of various boxing events including both Anthony Joshua against Ruiz, and the Brit’s bout against Ukranian heavyweight Oleksander Usyk. The first boxing show was based in Riyadh, the second bout in Jeddah. It is believed that the country has spent over $150 million to host these fights in the Middle East, with Joshua earning his highest ever pay day for the Ruiz rematch. Joshua’s performance was characterised by the way he boxed the sweet science and rhythm of flow, out boxing the Mexican and making him miss on many occasions. With this victory he secured two-time champion of the world status.
Additionally, there are major talks of the state hosting a mega heavyweight showdown to consist of; AJ vs Deontay Wilder and Fury vs Oleksander Usyk. It is rumoured that this prestigious event could be worth around $300 million as a minimum figure, which would ultimately go down within the history of boxing as one of the greatest events. Certainly, one to watch for the future, with promoters and broadcasters responsible for tackling the questions of which network it would air on, who would have the rights to the show, who would be promoting the event, how much would each fighter receive, who would be the A side in each respective bout and who the B side?
Usyk is an interesting name to mention as he has recently just signed on the dotted line for Skills Challenge Promotions in a multi fight deal. It has always been claimed by big figure heads in boxing that previous business in Saudi Arabia has been carried out smoothly, given the clear focus. It will be very interesting to see what plans Skills Challenge have for the future; will all of Uysk’s fights be held in the Middle East? We will have to see.
Football
Just as boxing is undergoing expansion in the Middle East, football alike has a huge opportunity to grow as we are seeing right now. By securing the signature of Cristiano Ronaldo to the country, this move has set more viewers on the Saudi Arabia Football League, with a bid to host the 2030 World Cup.
Football is really starting to blossom; they have secured some huge names over the past few years and especially the current transfer window, the likes of Benzema, Kante and Messi rumoured to move to the country. Benzema has signed for AL Ittihad - £200million per season, Kante has signed for £86m per season, with Messi signing for Inter Miami having been heavily linked with the joining the league with the offer believed to be around £500 million per season.
Saudi Arabia have created a vision of 2030 with sport at the forefront, Al Rumayyan has been handed the task of making these transitions happen. We are certainly seeing the country have a drastic impact already; this is just a sign of what is to come, of which I’m sure will just keep exponentially growing.
With big-name players in the advanced stages of their careers making the move to the Middle East, it will only be a matter of time before managers and players in their prime take the leap to the dessert. I expect that within 5-10 years this league will be known as a top 5 league in the world if not higher, the Premier League will be watching as they have a huge rival on their hands. With the absence of Financial Fair Play Regulation, clubs don’t have a limit on what they are able to spend.
LIV Golf/ PGA deal
The details of this merger are yet to be fully disclosed, however according to the PGA Tour’s press release, the following were agreed between parties;
The agreement came together over seven weeks, with Monahan and two other PGA Tour board members (no players) negotiating directly with Saudi Arabia.
The PGA tour, DP World tour and LIV Golf are merging the commercial business and rights to create a new for-profit business.
This significant partnership will cancel out all the on-going litigation between LIV Golf and the PGA Tour.
The main investor will be Saudi Arabia which has a portfolio of $620 billion through the Sovereign Wealth Fund also known as the Public Investment Fund (PIF), it is rumoured that $3 billion will be invested into this new partnership.
The Public Investment Fund (PIF), has rights to further invest into the new venture and secondly, they have a right of first refusal to any outside parties who want to join the collaboration.
LIV Golfers can re-apply for memberships with the PGA Tour.
The PGA Tour will remain a 501(c)(6) tax-exempt organization.
LIV Golf as an organisation have been making their own route within the sport, ever since they formed, they rivalled the PGA until this critical point where the two figure heads within the game have struck a partnership agreement to ensure the game reaches a mass audience.
It is believed that the deal between the two powerhouses will operate with the PGA controlling the logistics of the tournament; LIV will be alongside heavily investing as the new beginnings take place.
Yasir Al Rumayyan will be the chairman of the organization, with Jay Monahan as CEO. This partnership certainly begs the question of what the future holds for Saudi Arabian involvement in golf. With significant points of the deal remaining undisclosed, we will wait to see whether the PGA remains in sole control of operations and logistics of the tour.
Conclusion
These are some highly important points to the role of Saudi Arabia and what this may look like for the future of sport. It’s certainly fascinating to follow as a sports viewer, to keep up to date with how this will unfold, and the changing trajectory of sport with the Sudi Arabian vision 2030. There certainly seems to be a drive to a different landscape, with no reason why that can’t happen.
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