Saudi Arabia is on a drive to transform its oil-reliant economy and big sports stars such as Lionel Messi, Cristiano Ronaldo, golfer Phil Mickelson, and boxer Anthony Joshua are integral components of this initiative.

Allocating significant financial resources to the sports sector forms a crucial aspect of Vision 2030, an ongoing endeavor led by Crown Prince Mohammed bin Salman. The primary objective is to reduce the nation’s reliance on crude oil and secure a prominent position on the global stage.

Critics of the Gulf kingdom often argue that this investment strategy represents a clear example of “sportswashing.” It involves utilizing sports as a means to improve the image of an authoritarian regime that carried out nearly 200 executions last year and is widely suspected of orchestrating the brutal murder of Washington Post journalist Jamal Khashoggi in 2018.

However, the truth is that the Crown Prince harbors a more expansive aspiration: to elevate Saudi Arabia’s economic advancement.

Sports Spending Spree

The world’s leading oil exporter has invested billions of dollars in various sports sectors, including soccer, golf, combat sports, and Formula 1, during the last couple of years.

Saudi Arabia’s ambitious campaign to establish dominance in soccer is closely tied to an industrial city in northeastern England. In October 2021, the government-controlled Public Investment Fund (PIF) completed an 18-month negotiation process by acquiring an 80% stake in the Premier League club Newcastle United for £305 million ($372 million).

Within just under two years, they have expended hundreds of millions of dollars on new players, aimed at elevating the traditionally underperforming team to a position where they can qualify for the UEFA Champions League, Europe’s premier competition.

Ronaldo joined Riyadh-based Al Nassr in January, setting the stage for PIF to lure some of the world’s best players to Saudi Arabia.

In June, the fund secured controlling interests in the largest four clubs in the country. Since then, high-profile figures such as Ballon d’Or winner Karim Benzema, Brazilian legend Neymar, and former Liverpool forward Sadio Mané have made the move from Europe to the Saudi Pro League.

“Soccer is by far the most popular global sport so certainly, the rationale to invest in it will always be there,” Danyel Reiche, a visiting fellow at Georgetown University Qatar, told Insider. “But Saudi Arabia is piling into other sports too, because they want to achieve a lot in a short period of time.”

The same month it took over Newcastle, PIF invested an estimated $2 billion in the breakaway competition LIV Golf and global stars like Mickelson, Dustin Johnson and Brooks Koepka soon flocked to the new competition, which is set to offer prize money of $405 million this year alone.

Just two years later, LIV has effectively cannibalized the rival PGA Tour.

Sports Merger and Prestigious Event Hosting

In a significant development observed in June, the respective competitions made an agreement to merge into a unified entity. This newly combined entity will receive its funding and leadership from the Public Investment Fund (PIF), a move widely regarded as a strategic success for Saudi Arabia.

Outside the realms of soccer and golf, the Kingdom has allocated tens of millions of dollars towards hosting prestigious events. These include two high-profile heavyweight boxing matches featuring Joshua, numerous WWE shows, and a Formula 1 Grand Prix that has been held in Jeddah since 2021.

Additionally, the Gulf state is on the verge of hosting an undisputed heavyweight title clash between champion boxers Tyson Fury and Oleksandr Usyk. Boxing promoter Frank Warren has described this upcoming bout as “the most significant fight that our sport could possibly offer.”

“Call It Whatever You Want”

When confronted with allegations that his investment campaign amounted to sportswashing, Crown Prince Mohammed responded candidly in an interview with Fox News last week, stating, “I’m indifferent to that.”

“If it contributes to the growth of the Saudi economy, then I will continue to engage in sports initiatives. We’ve already seen a 1% increase in GDP from sports, and our target is an additional 1.5%. You can label it however you like, but we are determined to achieve that 1.5%.”

The Crown Prince’s statement underscores that the Kingdom’s investment in sports serves a dual purpose: not only to enhance its economic prospects but also to address its international image.

Crown Prince Mohammed has “set out on a sport industry journey that he’s going to seek to fulfill, irrespective of how we label Saudi Arabia,” says Simon Chadwick, a professor at SKEMA Business School in Lille, France.

“He laid it out very clearly. His principal objective is to secure GDP growth of between 2% and 3% through sport, and he doesn’t care if we call that ‘sportswashing’,” he adds, noting that sport makes up a similar proportion of the US, French, and German economies.

Political and Popular Impact of Saudi Arabia’s Sports Investment

In addition to stimulating economic expansion, Saudi Arabia’s substantial investment in sports is expected to strengthen the political standing of the crown prince, as asserted by both Chadwick and Reiche.

With the under-35 demographic constituting 70% of Saudi Arabia’s population, the government’s successful track record in attracting global superstars like Ronaldo, who boasts over 600 million Instagram followers, is likely to enhance its popularity among this age group, according to their analysis.

“The Crown Prince is consolidating his influence and control by expanding the range of entertainment options available to young people, thereby enhancing their satisfaction,” Reiche explains to Insider.

He further points out, “In contrast to Iran, where we witnessed young people taking to the streets, Saudi Arabia has not experienced a similar scenario, primarily due to bin Salman’s considerable popularity.”

Football, Fast Cars, and Fights

According to Chadwick, the Saudi government has a plan to appeal to its younger, more traditional population, and they’re doing it through three specific sports.

“They’ve been focusing their investments on football, high-speed cars, and combat sports,” he explained to Insider. “It may sound a bit macho, but it fits with Saudi Arabia’s traditional and male-dominated culture.”

On the other hand, Riyadh’s investments in golf serve a different purpose: boosting the rapidly growing tourism sector. Crown Prince bin Salman recently mentioned that tourism already contributes 7% to the country’s total GDP.

“Golf is part of Saudi Arabia’s effort to develop its tourism industry,” Chadwick noted.

“In my view, LIV is a part of a bigger plan to eventually make Saudi Arabia a top destination for sports, competing with places like Miami, Augusta, or St Andrews.”

Saudi Arabia, isn’t slowing down when it comes to investing in sports. They continue to put significant resources into soccer, golf, Formula 1, and combat sports, and it seems like they’re planning to expand their sports investments even further.

Expanding Sports and Global Impacts

In June, the chairman of the ATP Tour in tennis mentioned that he had “positive” talks with PIF and other investors about creating a competition similar to LIV, backed by Saudi Arabia. This idea has already gained support from star players like Nick Kyrgios from Australia and Ons Jabeur from Tunisia.

There’s also talk that Saudi Arabia is getting ready to launch a cricket competition similar to the Indian Premier League. Additionally, officials are cautiously optimistic about getting support from European countries to host the FIFA World Cup in 2034, which is the pinnacle of international soccer.

As Crown Prince Mohammed emphasized recently, all of these initiatives are part of a comprehensive strategy to boost Saudi Arabia’s economy through strategic investments. So, it looks like Saudi Arabia’s substantial financial commitment to sports will continue to be a significant topic in the sports world for the foreseeable future.

Conclusion

Saudi Arabia’s strategic investments in sports aim to drive economic growth, enhance political influence, and attract global attention. Crown Prince Mohammed’s commitment to this endeavor, regardless of labels, underscores its importance.

With a focus on soccer, golf, and more, Saudi Arabia is making significant strides in the sports industry, likely becoming a top sports destination globally. These investments are poised to remain a significant and enduring topic in the world of sports.

The post Why Saudi Arabia is Investing Billions of Dollars in Multiple Sports first appeared on Business d'Or.