In a significant move aimed at bolstering its ambitious plans in the sport, the Saudi government has transferred ownership of four top domestic football teams to its deep-pocketed sovereign wealth fund.
The Public Investment Fund (PIF) announced on Monday that Al Ittihad, Al Ahli, Al Hilal, and Al Nassr, where Portuguese star Cristiano Ronaldo currently plays, have been transformed into corporate entities, relinquishing their previous state-run status. Under the new arrangement, the $600 billion fund will hold a 75% stake in each of the four clubs, while the remaining shares will be held by newly established non-profit foundations.
This ownership restructuring coincides with Saudi Arabia's concerted efforts to attract more top players to the country. Since Ronaldo's arrival in January, lucrative offers have reportedly been made to Argentina's World Cup-winning captain Lionel Messi and Karim Benzema, the winner of the 2022 Ballon d'Or. While these footballing icons are approaching the twilight of their careers, their presence would undoubtedly enhance the league's profile. Notably, Messi already has a promotional deal with Visit Saudi, the country's tourism board.
According to the Saudi Press Agency, the changes implemented at the four clubs aim to stimulate investment in the sport, enhance competitiveness in the league, and foster professionalism and financial sustainability. Riyadh envisions the Saudi Pro League becoming one of the top ten leagues globally and anticipates that the privatization initiative will help quadruple the league's annual revenue to 1.8 billion rials ($480 million), as stated by SPA.
The PIF believes that the new ownership structure will unlock diverse commercial opportunities, encouraging further investment and sponsorship in the football clubs. Chaired by Crown Prince Mohammed bin Salman, the sovereign wealth fund is actively driving the country's economic reform agenda to diversify revenue sources beyond oil. PIF has made notable acquisitions and investments in various sectors, ranging from electric vehicle manufacturers to construction and green energy.
Saudi Arabia has been pouring significant investments into sports worldwide, including football, Formula One, and a $2 billion venture in golf. LIV Golf, now in its second year, has been disrupting the sport by enticing renowned players with lucrative contracts to join its rebel tour.
Additionally, Riyadh launched an events investment fund in January to support culture and sports initiatives.
Football, in particular, has garnered significant attention due to its popularity both domestically and globally. In 2021, PIF led the £310 million takeover of English Premier League club Newcastle United. Under Saudi ownership, the team has made impressive strides up the league table and secured a spot in next year's Champions League after finishing ahead of Liverpool.
Highlighting Saudi Arabia's aspirations in the sport, the PIF has committed over $2 billion to long-term sponsorship deals within the domestic league.
As a potential World Cup host, Saudi Arabia has been under consideration following the successful tournament held by neighboring Qatar late last year.