Saudi Arabia’s Sports Investments Under Review
The decision by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), to cease bankrolling LIV Golf at the end of the season has cast uncertainty over the future of the breakaway series. This move has also prompted questions regarding the kingdom’s extensive portfolio of other sporting investments.
Over the past decade, Saudi Arabia has invested tens of billions of pounds to establish itself as a global sports hub, hosting numerous major events, from high-profile boxing matches and Formula 1 races to tennis and horse racing. Most notably, the kingdom is set to host the men’s FIFA World Cup in 2034.
So, what does PIF’s withdrawal from LIV Golf signify for the remainder of its sports portfolio?
BBC Sport delves deeper into the situation.
PIF Reaffirms Commitment to Sports Sector
“PIF remains committed to deploying capital internationally in line with its investment strategy, including its substantial current and future investments in various sports as a priority sector.” This was the concluding sentence of the statement released by PIF on Thursday, confirming its exit from LIV Golf after weeks of intense speculation. The message was clear: despite discontinuing support for a tour it once championed as the future of golf, Saudi Arabia maintains its commitment to the global sports arena.
Until recently, such reassurance might not have been necessary. The kingdom’s significant spending has also involved attracting some of the world’s biggest stars, including Cristiano Ronaldo, to its revamped domestic football league, and acquiring a majority stake in Premier League club Newcastle United. A wide array of sports sponsorships solidified its growing influence in international sport, with a future Olympic bid appearing to be a formality.
The country has stated that these initiatives are designed to modernize and diversify its economy by boosting tourism, aligning with Crown Prince’s Vision 2030 strategy, while also encouraging its population to be more active. Critics, however, have raised concerns about its human rights record, accusing the kingdom of ‘sportswashing’ its reputation. The country’s international standing was significantly impacted by the 2018 killing of Jamal Khashoggi, a US-based Saudi journalist and prominent government critic. It has also faced scrutiny over its use of the death penalty.
But regardless of the motivations, has Saudi Arabia’s engagement with sport begun to moderate?
Shifting Spending Priorities Amidst Economic and Geopolitical Dynamics
In January, BBC Sport learned that towards the end of last year, there was “a shift” in the kingdom’s approach to certain investments, with “everything in the PIF world under serious review.” This change in strategy, emphasizing more sustainable investments expected to yield returns, followed a significant budget deficit of $73 billion last year, driven by increased spending and lower oil revenues.
Notably, the 2029 Asian Winter Games in Saudi Arabia were suddenly postponed indefinitely. Subsequently, it emerged that the end-of-season WTA Finals in women’s tennis would be leaving Saudi Arabia after a three-year hosting deal was not extended. The perception that the era of lavish spending was drawing to a close seemed to be reinforced by broader regional developments.
Geopolitical tensions in the Middle East have introduced new dynamics, potentially influencing spending priorities towards security and essential infrastructure. Last month, PIF confirmed a renewed emphasis on “sustained value creation…and maximizing long-term returns,” with a statement that made no mention of sport, further fueling speculation about a potential shift in focus.
Soon after, PIF announced it had sold Saudi Pro League club Al-Hilal. The Saudi Arabia Snooker Masters was cancelled just two years into a 10-year deal, and the country reportedly abandoned plans to bid to host the 2035 Rugby Union World Cup.
However, the most significant casualty was LIV Golf, with PIF stating: “The substantial investment required…is no longer consistent with the current phase of PIF’s investment strategy. This decision has been made in light of PIF’s investment priorities and current macro dynamics.” When viewed in this context, it is understandable that LIV, which had accumulated billions of pounds in losses since its 2022 launch, was no longer compatible with PIF’s revised investment strategy, especially given the vast sums needed for preparations for the 2034 World Cup in just eight years.
Dr. Johan Rewilak, an expert in sport management at Loughborough University, commented, “With the 2034 World Cup approaching, Saudi Arabia faces enormous infrastructure and delivery costs. It is plausible that the government is reallocating capital and reassessing its wider sports portfolio. Geopolitical tensions and rising construction costs may also be accelerating these decisions, shifting spending priorities toward security and essential infrastructure rather than prestige sports assets.”
Prioritizing Sports with Local Appeal and Talent Pathways
Some sports appear to be in a more secure position than others, particularly those with mass appeal among Saudi Arabia’s youthful population. Last year, Saudi boxing chief Turki Alalshikh insisted that reports of a slowdown in spending on the sport were “100% not true.” In July, Riyadh is set to host Anthony Joshua’s heavyweight fight against Kristian Prenga, along with the Esports World Cup.
In cricket, the country is reportedly exploring plans for a global T20 cricket competition, although a women’s tournament scheduled for later this year has been postponed due to regional considerations. Next year, Saudi Arabia is due to host the AFC Asian Cup for the first time. A new, state-of-the-art Formula 1 circuit is also under construction near Riyadh.
According to sources familiar with PIF, the fund will now prioritize sports that already have a fan base in the country (like combat sports) and in which Saudis have a chance of excelling, with more investment directed towards talent development pathways. “People think the PIF has a limitless supply of money, but it’s a misconception,” said one source. “It is an investment fund designed to maximize the quality of life for people in Saudi, and now the need for more selective spending has been accelerated because of regional dynamics.”
The BBC has also been informed that PIF’s long-term commitment towards Newcastle United remains unchanged, with a major capital investment expected to be confirmed in the coming days. This news will undoubtedly bring relief to many fans increasingly concerned about the future backing of their owners. However, the fate of LIV Golf also serves as a warning to all those who had become reliant on Saudi Arabia’s extensive sporting spending. They now understand that nothing is guaranteed.
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