Four things to know about investing in Saudi Arabian sports

Four things to know about investing in Saudi Arabian sports

Saudi Arabia’s cultural capital has swelled as it continues to invest in global sport. In the past couple days, the Saudi Professional League has targeted Premier League club Chelsea and their bloated squad issues, offering high wages in a rapidly growing division. The move further cements the nation as both a lucrative and attractive option for sports business dealings. Here are the four most important things to know about the rapidly growing influence of Saudi Arabia if you are seeking sponsorship from or within the nation. 

Things move fast: look to the next growing market 

As journalist Miguel Delaney notes, ‘Saudi Arabia is now trying…every approach.’  Government sources have indicated that the nation is aiming to host 25 world championships across a number of sports by 2030. 

If anything indicates this tactic, it’s the country’s recent takeover of golf. LIV Golf, the PGA Tour, and DP World Tour announced an agreement to merge commercial operations under common ownership by the Public Investment Fund. The PGA Tour was founded in 1929 - the standing it has taken the PGA Tour nearly a century to acquire, Saudi Arabia has, in effect, reached in just over two years by buying it. Yes, things move fast. 

With Saudi Tourism Authority’s successful IPL partnership, the nation is further spreading its influence into cricket after twenty years as a member of the ICC (International Cricket Council). Importantly, the partnership was leveraged at a geopolitical level, with the opening of dedicated visa centres in India, increasing accessibility between the two countries and helping fulfil STA’s ambition for India to be a leading tourism source market by 2030. To read more about the landmark deal, click here.

Clearly, there are two central factors determining Saudi Arabia’s investment movements: geopolitical opportunity and the development of a range of sports domestically and abroad. 

Fast growth doesn’t always mean clear opportunities

The fast growth has also meant uncertainty for sponsors. With information on dates scarce, sponsors of the remarkable new golf tournament could be left without ample time to plan long-term activations. The previous PGA Tour schedule could well change to respond to new climates and partnerships need to keep up to date in order to maximise the opportunity.

With regards to its domestic football league, the only precedent for such an expansion is the Chinese Super League. Investors ought to be aware of a potential bubble which caused the CSL to wane in influence. For Uefa president Alexsander Čeferen, Saudi Arabia is “making the same mistakes as China” by not investing in the development of their own players. That said, when paired with wider expansions, including a potential takeover of the African Super League, Saudi Arabia appears to be building for long-term stature in the world of sport. 

Know the Saudia Arabian audience 

Understanding the culture and demographics of Saudi Arabia is key to knowing its next steps. First, it’s a young nation, with 70% of the population under 35. It is also football-obsessed. Since Ronaldo joined, attendance at Al Nassr games is up by 143 per cent. Clearly, the investments have domestic relevance that is waiting to be leveraged. 

Saudi Arabia also has a long-standing football culture through one of the more successful national teams in Asia. It is not so much of a surprise that the country has been able to attract players such as Ballon D’or holder Karim Benzema. True, the investment is astonishing, but the country nonetheless has fertile sporting roots and a population eager to capitalise on them. 

With its money and global geopolitical network, the Saudi Arabia league appears to be easing Chelsea’s bloated squad issue, proving its worth as a big game player and building relationships for the future.

Understand the debate and know where you fit in 

“If they’re going to be investing this kind of money in the sport, we’ve got to be realists,” said Eddie Hearn after Anthony Joshua’s victory over Andy Ruiz Jr in Diriyah in 2019. The levels of investment that Saudi Arabia’s various investment channels provide are nonpareil. However, even with the remarkable rate of change, culturally and financially, Saudi Arabia’s human rights record remains a factor for global audiences. 

Just recently, FIFA dropped plans for Saudi Arabia’s tourism arm, Visit Saudi, to sponsor the 2023 Women’s World Cup. It followed a backlash from co-hosts Australia and New Zealand, players including Arsenal's Vivianne Miedema, and fellow sponsors. 

Prior to the sponsorship scrapping, Football Australia and Football New Zealand wrote letters to FIFA President Infantino outlining their disappointment and concern over the possibility of the sponsorship, which had been negotiated without their knowledge or input. "We cannot express strongly enough the potential repercussions and fall-out that could result from this decision," the letter said.

Fortunately, that was avoided. It did, however, highlight the potency of public opinion around Saudi Arabia’s expansionism. Knowing where you are as a brand, and where your audience sits within the debate is crucial to avoid destructive campaigns.