PIF’s acquisition of Saudi football clubs sets stage for sports revolution

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With Saudi Arabia’s Public Investment Fund (PIF) announcing it would be acquiring a large percentage of four major Saudi football clubs, the move is set to be a game changer for sports in the Kingdom.

The $600-billion fund, which owns Newcastle United FC as well, will acquire 75 percent of Al Ahli, Al Hilal, Al Ittihad – who recently signed a contract with Karim Benzema – and Al Nassr – which iconic footballer Cristiano Ronaldo plays for – as part of a project launched by Crown Prince Mohammed bin Salman.

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Meanwhile, each club’s NGOs will own the other 25 percent.

“The privatization and ownership transfer of clubs aims to accelerate progress in a variety of sports across the Kingdom, further growing participation, providing cutting edge facilities, increasing competition, and nurturing future champions,” the Saudi Press Agency (SPA) reported.

According to the PIF, transferring the four clubs will “unleash various commercial opportunities, including investment, partnership and sponsorships across numerous sports.”

Saudi Arabia fans inside the stadium before a match. (File photo: Reuters)
Saudi Arabia fans inside the stadium before a match. (File photo: Reuters)

Creating ‘massive’ opportunities

The move will also significantly impact Saudi Arabia’s sports scene, both domestically and internationally, according to Sports Marketing Specialist and Writer Khalid al-Rubian.

“The impact will be huge, whether domestically or internationally,” al-Rubian told Al Arabiya English.

“The greatest domestic impact of this decision will be creating massive opportunities for Saudi youth. There will be 30,000 to 40,000 jobs created in just the first two years, which is a great indicator of the Kingdom’s continued investment and support for the youth and their employment.”

Raising the private sector’s contributions to the sports sector is also a significant outcome of the Crown Prince’s decision to allow the privatization of sports clubs.

Since launching the Vision 2030 reform plan to diversify the economy, Saudi Arabia has been ploughing billions of dollars into non-oil sectors.

Spectators wait for the start of the Qatar 2022 World Cup Group C football match between Poland and Saudi Arabia at the Education City Stadium in Al-Rayyan, west of Doha on November 26, 2022. (File photo: AFP)
Spectators wait for the start of the Qatar 2022 World Cup Group C football match between Poland and Saudi Arabia at the Education City Stadium in Al-Rayyan, west of Doha on November 26, 2022. (File photo: AFP)

The latest project will surely “ease the burden” on the government as the responsibility will shift onto private companies, the Sports Marketing Specialist said.

According to al-Rubian, the move is also set to improve the governance of sports clubs in the Kingdom, making them more professional and sustainable.

“The Saudi Pro League has now entered its professional era strongly, just like European clubs. It is an era without limits for the clubs.”

The project will create a competitive environment among domestic and foreign investors hoping to reap the benefits of the rapidly growing sector, al-Rubian added.

Other clubs converted to companies

Moreover, four other clubs were converted into companies, and their ownerships were transferred to development agencies.

Al Qadisiyah Club’s ownership was transferred to Saudi Aramco, Diraiyah Club’s ownership was transferred to the DGDA, AlUla Club’s to the Royal Commission for AlUla (RCU), and the Suqoor Club to NEOM.

In addition, an investment fund was established for each of the eight club companies whose ownerships have been transferred to achieve sustainable returns for the companies.

Three strategic objectives are at the heart of the project: fostering investment opportunities and making investing in Saudi Arabia’s sports sector appealing; improving the governance of sports clubs in the Kingdom and making them more professional and sustainable; and enhancing clubs’ infrastructure to make them more competitive.

Growth of Saudi football

PIF’s acquisition comes when Saudis are playing more sports than ever before.

Mass participation in sports by both men and women has increased from 13 percent in 2015 to close to 50 percent in 2022, according to SPA.

Meanwhile, the number of sports federations in Saudi Arabia has increased from 32 in 2015 to over 95 in 2022, demonstrating investment potential.

Saudi Arabia fans in the fan zone before a match. (File photo: Reuters)
Saudi Arabia fans in the fan zone before a match. (File photo: Reuters)

With over 80 percent of Saudi Arabia’s population either playing, attending, or following football, the project puts the Saudi Pro League – which boosts players from over 40 countries and has seen attendance increase by nearly 150 percent in the last year – center stage, further accelerating the remarkable growth it has seen in the past few years.

The league’s commercial revenues are expected to rise from 450 million riyals ($119.9 million) in 2022 to over 1.8 billion riyals annually under the new project while generating private-sector investment opportunities and increasing its market value from 3 billion to more than 8 billion riyals by 2030.

Under the new project, the Saudi Pro League will be greatly supported in its ambition to be amongst the top ten leagues in the world.

It also does not hurt to have internationally renowned players, such as Cristiano Ronaldo and Karim Benzema, recognize the significant potential of the Saudi Pro League, according to al-Rubian.

Al Nassr's Cristiano Ronaldo and teammates pose with a shirt for David Ospina in a team group photo before the match. (File photo: Reuters)
Al Nassr's Cristiano Ronaldo and teammates pose with a shirt for David Ospina in a team group photo before the match. (File photo: Reuters)

With millions of followers on social media, the iconic football players can use their platform to showcase just how professional and competitive the league can be.

“The world’s view on Saudi Arabia’s sports sector will shift,” al-Rubian told Al Arabiya English.

“In the past three or four years, because of the Crown Prince, we excelled in politics, we excelled in the field of economy, we excelled in the fields of tourism and entertainment. Now it is time to excel in sports.”

Al Nassr star player Ronaldo even believes the league has the potential to be among the top five in the world in the next couple of years if investments in the sector’s infrastructure continue.

“I think the league is very good, but I think we have many, many opportunities to still grow. I think the league is good, competitive. We have very good teams. We have very good Arab players. The infrastructure, I think they need to improve a little bit more,” Ronaldo said in an interview with the Roshn Saudi League earlier this month.

“In my opinion, if they continue to do the work that they want to do for the next five years, I think the Saudi league can be the fifth [top league] in the world.”

Read more:

Saudi Crown Prince launches Sports Clubs Investment and Privatization Project

Acquisition of sports clubs is a testament to the growth of the Saudi sports sector

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