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June 14, 2023

Editor Note: Andy Marston takes the controls on Wednesday mornings. You will find his latest Sports Pundit column is below. I'll be back tomorrow.

PIF Takes Control of Four SPL Clubs Signifying New Saudi Sports Era

While much attention over the last week has focused on the investment Saudi Arabia’s Public Investment Fund (PIF) made to bring LIV Golf and the PGA Tour together, the sovereign wealth fund also recently acquired majority stakes in four of Saudi Arabia’s most prominent football clubs, including Al Nassr (think: Cristiano Ronaldo’s team) and Al Ittihad (which recently signed Karim Benzema and N’Golo Kante to blockbuster deals).Historically speaking, the clubs have been under the Ministry of Sports’ control and dependent on state funding. But that is changing. The transformation of ownership to the PIF signifies a new era for the sport in the country.The State is looking to eliminate any complacency that may exist in club operations and build the Saudi Pro League (SPL) into one of the most competitive in the world. “The hope is that placing the clubs under PIF's control will bring about a sense of private companies running the individual clubs, thereby increasing accountability,” a source close to the Saudi’s Ministry of Sport, who asked to remain anonymous, said. The State is also hopeful PIF’s involvement will help draw international investors to the league.“As PIF develops and organizes the clubs, they want to attract private owners to come in as seen in the Premier League or MLS,” the source said. “That's the model they're trying to build.”The PIF has a similar vision for LIV Golf.“[Its] emphasis on the team format means that as the teams generate greater brand value through the association with world class talent, private ownership [in the clubs] becomes increasingly attractive,” the source said.But the SPL league will need to offer more than just financial accountability to entice private capital from the west. It needs to develop the infrastructure capable of supporting these teams as independent businesses. The Saudi Press Agency (SPA) reports the SPL has a plan to grow annual league revenues from $120 million to $480 million by 2030. Should that occur, the expectation is the collective value of the clubs would rise from $800 million to ~$2.14 billion.Its plan revolves around three key pillars: creating an appealing investment environment, improving league governance to help ensure greater professionalism and financial sustainability, and making facility infrastructure upgrades.The State asserts the substantial transfer fees paid to bring in players like Ronaldo, Benzema and Kante address the former. It believes having world-class players raises awareness of the individual clubs' brands and will ultimately enable them to sell as established international sports franchises in the future.The Ronaldo signing has undoubtedly enhanced Al Nassr’s profile. The club's Instagram following has grown from 860,000 followers to more than 15 million.The deal has also helped to spark global broadcast interest in the league. Prior to Ronaldo joining Al Nassr, the SPL’s sole broadcast rights deal was a regional pact with Saudi Sports Company (SSC) that covered the Middle East and North Africa. The SPL now has 37 different rights partnerships and carriage in 125 countries, including China, Thailand and Indonesia.Benzema doesn’t bring quite as large of a global following with him. But as just the second Muslim to win the Ballon d’Or, the former Real Madrid star should be influential in growing the league’s popularity across the Arab world. While the SPL is improving the talent level on the field, it is seemingly making progress off it too. The league recently named former Asian Football Confederation (AFC) and UAE Pro League executive Carlo Nohra as its chief of league ops. It also bolstered the board with the additions of veteran media executive Peter Hutton and women’s football head Lamia Bahaian. Saudi Arabia will host the FIFA World Club Cup later this year and the AFC Asian Cup in ‘27. Those two events should raise the country’s profile among sports industry insiders.Perhaps more importantly, at least in the context of growing SPL revenues, the State is funding improvements to academies and stadiums used by the league’s teams in preparation for them. The dollars spent and improvements made should increase the franchises’ viability, and their value to private investors, long after the games are done.The Saudis are motivated to promote private sector involvement as they look to create a more robust and diversified economy, and reduce dependence on oil revenues (see: Vision 2030). If the SPL can capitalize on the league’s growing awareness and attract lucrative sponsors and strategic investors, there’s no reason to believe that it won’t become the multi billion dollar property the State has mapped out.

About the Author: Andy Marston leads growth and marketing at Zone7, a proprietary AI platform committed to helping sporting organizations unlock greater performance data insights. Based in London, he founded Sports Pundit in 2020. In addition to this column, he publishes a ‘Highlight Reel’ newsletter each Friday breaking down key stories from across the industry. You can find him here.