Public Investment Fund Backs Four Domestic Clubs To Grow Game And Influence

Karim Benzema is the latest prominent soccer star to shift from Europe to Saudi Arabia. On Tuesday, his move to Al Ittihad was confirmed, but that was perhaps not the most eye-catching news coming out of the Arab Kingdom. A day earlier, Saudi Arabia’s Public Investment Fund (PIF) said that it will take control of four domestic clubs: Al Nassr, where Portuguese star Cristiano Ronaldo plays, as well as Al-Ahli, Al-Ittihad and Al-Hilal, the 2021 Asian Champions League winner.

It’s a landmark move to bolster the Arab Kingdom’s investment in the game. PIF, a $600 billion fund linked to the controversial Saudi crown prince Mohammed bin Salman, will acquire a 75% stake in the four clubs, with the remaining shares held by new non-profit foundations. The acquisition is part of a comprehensive government initiative described as “a bold investment and privatization project.”

“The transfer of the four clubs will unleash various commercial opportunities, including investment, partnership, and sponsorships across numerous sports,” said the PIF.

The drive to back the clubs, and hence the Saudi Pro League, with state funding, aligns with the government’s Vision 2030 economic diversification plan. In a statement, the Saudi Press Agency said that “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.”

In 2021, a new sports law was enacted to enable club privatization through external investments and protections. However, with the entry of the PIF into the domestic playing field, it seems that the Saudi state is driving the transformation of the game.

Prince Abdulaziz bin Turki Al-Faisal, the Saudi sports minister, also announced that Al-Qadisiyah Club was to be transferred to Saudi Aramco, Diraiyah Club to the Diriyah Gate Development Authority, AlUla Club to the Royal Commission for AlUla, and the Suqoor Club to NEOM.

The Arab Kingdom wants to become a top-ten league by 2030 with an annual revenue increase from $120 million to over $480 million, and an increased market value from $800 million to at least $2.13 billion.

The Saudis have created a war chest to attract and target the biggest names in soccer. Benzema’s move to Al-Ittihad exemplifies this strategy. However, the country has faced criticism in recent years for utilizing sports, particularly soccer, as a means to improve its reputation. Human Rights Watch has described the Saudi Arabia brand as deeply flawed, emphasizing that the country invests billions of dollars in hosting major entertainment, cultural, and sporting events as a deliberate strategy to divert attention from its reputation as a violator of human rights.

In the past, the country has repeatedly wanted to position itself as a new player in soccer and sports at large in an elaborate reputation-laundering exercise: a Saudi-funded Club World Cup, worth $25 billion; the long-running pursuit of a Premier League team, the launching of a new regional soccer federation, a Saudi sports channel that would drive up global TV rights, and the explicit backing of FIFA’s biennial World Cup.

In February, soccer’s global governing body FIFA, without much consultation or due process, awarded the 2023 edition of the Club World Cup to the Arab Kingdom, the second time Saudi Arabia will stage a major FIFA tournament following the Confederations Cup in 1997. Saudi Arabia will also host the 2027 Asian Cup and is actively bidding for the 2026 Women’s Asian Cup. The ultimate goal, however, is sports’ quadrennial mega event, the World Cup. The Arab country is expected to bid for the 2030 iteration of the global finals.

But spending big on soccer does not come without risks. China’s flirtation with the sport comes as a cautionary tale. The Chinese supercharged their domestic soccer with state-encouraged investments before the Chinese Super League imploded.