Saudi Arabia set to launch multi-billion dollar sports investment group

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Saudi Arabia is planning to launch a multi-billion-dollar investment company to expand its sporting interests following its prowess in golf and success in English football, according to two people familiar with the matter.

The sports conglomerate, which will be part of the kingdom’s sovereign wealth fund, will have a war chest to fund its expansion, according to one person, a sign that Riyadh is looking to make further acquisitions, investments and joint ventures in football. committed to. , tennis and other sports.

The $650bn Public Investment Fund has made a series of investments in sports in recent years, demonstrating its financial prowess in a sector disrupted by the coronavirus pandemic.

The campaign has criticized Saudi Arabia’s human rights record and accused the kingdom of “playing up” its international reputation. Government officials say it is part of an ambitious overhaul of the economy, which they are trying to diversify beyond the oil sector by attracting tourism and investment.

“There’s definitely been a sense of momentum investing in global sports after the World Cup,” said a person familiar with the PIF’s strategy. “It was inspired by the fact that Qatar did so well, and Saudi Arabia’s performance in the World Cup. There has been a marked change in the way he views global sports.

Simon Chadwick, professor of sport and geopolitical economy at Schema business school in Paris, said Saudi Arabia’s emphasis on sport was in some ways “nothing new”, comparing past investments by Qatar and Abu Dhabi.

However, he added that the “scale and speed” of Riyadh’s spending was unprecedented, and had the potential to leave a lasting impact on the entire region.

“Saudi Arabia is now shaping the commercial, industrial and geopolitical networks of sport,” he added. “It is starting to test the limits of the rules and the regime.”

PIF officials were not immediately available for comment.

The PIF caused ripples in the golf world when it launched the LIV circuit last year, spending billions to lure top players from the US PGA Tour to set up a new team-based tournament. But last month the two rounds agreed to a cease-fire, ending a long court battle and agreeing to merge their business interests.

The sovereign fund is chaired by Crown Prince Mohammed bin Salman, the kingdom’s daily ruler, who has tasked the PIF with steering his country’s economic reform plan, increasingly centralizing targeted sectors including sports under the sovereign wealth fund.

PIF governor Yasser al-Rumayyan is set to preside over a partnership between the LIV and the PGA, which still faces significant opposition among US lawmakers.

He is also the chairman of the sovereign wealth fund English football club Newcastle United which bought in 2021. The team, which was struggling at the time of the acquisition, finished fourth in the previous season’s Premier League to qualify for the top European competition, the UEFA Champions League. ,

Neither LIV Golf nor Newcastle United will come under the new company, according to a person familiar with the matter, which said it would focus on new opportunities.

The company’s launch will coincide with PIF’s emphasis on a greater role in the state’s footballing ambitions, which includes strengthening its clubs domestically. The country has attracted late-career football stars including Cristiano Ronaldo and Karim Benzema to their league this year on lucrative contracts, as well as adding young players. PIF also recently announced that it would take over the four largest domestic football clubs.

The Financial Times reported last month that the sovereign fund had also held talks with the men’s ATP tennis tour over potential events and investments.

The PIF has sought to centralize the sectors by creating a national champion to oversee strategy and investment.

The new sports company could take the same approach that PIF has taken towards the gaming industry with its investment company Savvy.

The company, which is headed by Prince Mohammed and has a war chest of $38 billion, has spent nearly $8 billion on acquisitions over the past 18 months in what one analyst described as a “bulldozer approach”, with the US -based games are also included. developer Scopely for $5 billion.

Additional reporting by Josh Noble in London