Saudi Arabia launching new sports investment firm

On the heels of the proposed merger between LIV Golf and the PGA Tour, the Kingdom of Saudi Arabia is building a new sports investment company.

The Financial Times reported that this group will be part of its sovereign wealth fund, the Public Investment Fund, and will be designed to acquire and partner with other sports teams and organizations around the world.

Saudi Arabia's aim to diversify its economy through these investments beyond oil but has spent much of the last decade fighting against claims of sportswashing of its human rights record.

Though concerns about sportswashing are age-old, going back to the dawn of the modern Olympics, the phenomenon seems to have fully entered our timelines when Saudi Arabia began making inroads with events that gained Western attention. World Wrestling Entertainment (WWE) had staged several house shows in the country for a few years, but it angered fans in 2018 when it signed a ten-year deal with the kingdom to stage premium live events there. Heavyweight boxers Tyson Fury, Anthony Joshua and Andy Ruiz Jr. have headlined major fight cards, and most recently iconic soccer star Cristiano Ronaldo signed a stunning $75 million per year deal to play in the nation's fledgling league.

One interesting observation in the FT report came from a professor in Paris who examines how sports fit into the global economy.

Simon Chadwick, professor of sport and geopolitical economy at Skema Business School in Paris, said Saudi Arabia’s push into sport was in some ways “nothing new”, drawing comparisons with previous 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 across the sector.“Saudi Arabia is now shaping the commercial, industrial and geopolitical networks of sport,” he said. “It’s beginning to test the limits of rules and governance.”

With the potential merger of the PGA Tour and LIV Golf, observers have wondered what will the kingdom set its eyes on next, especially as several sports leagues like the NBA have allowed sovereign funds to buy stakes in individual franchises. The Saudis already had conversations with the NBA, but also had discussions with Major League Baseball and Major League Soccer in the past. In the eternal chase for the next dollar, this new investment arm is likely going to lead to more discussions, whether anyone likes it or not.