Saudi wealth fund takes over clubs, lures football stars

Next season, Saudi Arabia’s football league will feature some of the sport’s top players, including Cristiano Ronaldo, Karim Benzema, and N’Golo Kante. The Saudi Professional League (SPL) is set to commence in August, and more high-profile signings are anticipated. In addition to these transfers, the kingdom’s sovereign wealth fund, the Public Investment Fund (PIF), overseen by Crown Prince Mohammed bin Salman, has announced its takeover of four major domestic football clubs: Al Nassr, Al Hilal, Al Ittihad, and Al Ahli. This move marks the beginning of a privatisation process for clubs that were previously under the control of the Ministry of Sports and financially dependent on the state.

Simon Chadwick, professor of sport and geopolitical economy at SKEMA Business School, said, “Now, they are trying to culturally transform these organisations from being state dependent into being much more purposeful strategic and businesslike organisations.” The privatisation process aims to foster the sport’s growth by attracting further investment and eventually enabling private sector involvement in clubs. The plan focuses on creating an appealing investment environment, improving club governance, and boosting competitiveness by upgrading infrastructure.

The initial goal is for SPL’s revenue to grow from the current US$120m a year to US$480m by 2030. During the same period, the league’s value is expected to increase from US$800m to about US$2.14bn. The arrival of high-profile players like Ronaldo has already helped the league secure numerous overseas broadcasting deals. Pat Janssen, former CEO of Riyadh-based club Al Shabab, believes that with the right strategy in place, the SPL can become one of the top 10 leagues in the world.

However, achieving change can be challenging, as demonstrated by mixed results in privatisation efforts in Asia. Chadwick points to the success of last year’s World Cup in Qatar as a model and inspiration for Saudi Arabia, stating, “The Qatar World Cup demonstrated that Gulf countries can bridge this gap and what is intended can be delivered successfully. Saudi Arabia will draw inspiration from this and believe it can succeed where other Asian countries have failed.”

In addition to attracting better players, the SPL will need to invest in better stadiums. Hosting the 2027 Asian Cup is expected to aid in this development. Ronaldo himself has noted that improvement should not be solely focused on players, stating in an interview with the Saudi league, “They need to improve a little bit more the infrastructure. And in my opinion, if they continue to do the work that they want to do here, for the next five years, I think the Saudi league can be a top-five league in the world.”