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Saudi Arabia plans to launch a new sports investment group following its foray into US golf and speculation the kingdom’s sovereign wealth fund will invest in other US sports.
The Financial Times reported on Wednesday that the kingdom is planning the new multibillion-dollar investment company following its “power grab in golf and success in English football (soccer).” The company will be part of Saudi Arabia’s sovereign wealth fund — the Public Investment Fund (PIF) — according to the outlet.
Why it matters: Saudi Arabia made a major push into US sports last month when its LIV Golf league announced a merger with the rival PGA Tour as well as the Dubai-based DP World Tour. The move shocked the sports world, but the details of the merger remain unclear. In late June, The Athletic reported that it had obtained a copy of the framework agreement between the entities. The future of LIV Golf as its own league and the amount the PIF will invest in the new entity, among other things, are not made clear in the document, according to the outlet.
The merger is also under investigation by the US Department of Justice for possible antitrust violations. Moreover, Sen. Richard Blumenthal (D-Conn.) will hold a hearing on the merger next Tuesday. Blumenthal invited PIF Governor Yasir al-Rumayyan, LIV Golf CEO Greg Norman and PGA Commissioner Jay Monahan to testify. Blumenthal cited “risks associated with a foreign government's investment in American cultural institutions” in his letters to the three men.
PGA Tour officials Ron Price and Jimmy Dunne will testify at the hearing, but nobody from the PIF or LIV will do so, according to the Senate’s permanent subcommittee on investigations. Monahan is currently on medical leave.
LIV Golf is continuing with its second season as the merger plays out. On Sunday, American Talor Gooch won the LIV tournament in southern Spain’s Andalucia.
The deal between LIV Golf and the PGA Tour has led to speculation that Saudi Arabia could soon move into other US sports. On Friday, American football commentator Mike Florio discussed the prospect of the Saudi PIF seeking to buy a team in the National Football League (NFL). The NFL should consider whether the Saudi sovereign wealth fund would opt to create its own competition in the event of a Saudi ownership bid being rejected, according to him.
“If the NFL finds out that Saudi Arabian interests want to use some of that PIF money to buy an NFL team, they need to ask themselves ‘What happens if we say no?’” said Florio on NBC.
Florio added there is a potential opportunity for a league to compete with the NFL by offering a rougher version of the contact sport that is also less focused on US political issues.
“If you can appeal to 30% of the audience, the population who would turn their back on the NFL … there’s an opportunity there if someone wants to do it and has the money. And we know the PIF definitely does,” he said.
On the other hand, Yahoo! Sports’ Charles Robinson reported last month that NFL team executives are skeptical of Saudi Arabia or another sovereign fund investing in the league. Robinson also pointed out that the NFL prohibits foreign ownership of franchises at present.
The NFL is the most profitable sports league in the world, and American football is the most popular sport in the country.
Saudi Arabia is also in talks to host professional tennis tournaments. Tunisian tennis superstar Ons Jabeur said on Tuesday that she supports Saudi investment in both the Association of Tennis Professionals (ATP), which governs the men’s game, and its counterpart, the Women's Tennis Association (WTA).
“If it benefits the player, I'm 100% there. I hope in Saudi Arabia they'll not just invest with the ATP — I hope with the WTA [too],” she said, as reported by Reuters.
In soccer, the PIF acquired Newcastle United in the English Premier League in 2021. The Saudi Pro League has also signed several major stars in recent months, most notably Cristiano Ronaldo.
Any further investment in Saudi sports is sure to generate controversy, largely due to the kingdom’s human rights record. Saudi Arabia is seeking to diversify its economy and reduce oil dependence, but critics accuse the kingdom of “sportswashing” with its sports investments.
Know more: The Qatar Investment Authority is in the process of buying a minority stake in Monumental Sports & Entertainment — the parent company of Washington's professional basketball and hockey teams. The National Hockey League has approved the sale, but the National Basketball Association (NBA) has yet to announce its decision on the deal, which is subject to review. The acquisition by Qatar’s sovereign fund could boost Qatari influence in Washington.
