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How Saudi's Multi-Billion Dollar Investments Have Transformed the World of Sports By Aaliyah Ahmed This year, the world of sports witnessed a seismic shift as renowned football stars like Neymar, Benzema, Firmino, and Mane found new homes in Saudi Arabian clubs. What appeared to be a sudden influx of talent is the result of Saudi Arabia's strategic investments in sports, totaling over 6 billion USD since 2021. These staggering investments have not only reshaped the sports landscape within the nation but have also sent ripples across the global sports arena. Origins of Saudi Arabia's Sports Investments Saudi Arabia's foray into sports investments can be traced back to 2016 when the Saudi Vision 2030 program was launched, aiming to diversify the country's economic portfolio. While the world knows Saudi Arabia primarily for its vast oil reserves, the nation is determined to shed the one-dimensional image and establish itself as a multifaceted global player. Sports emerged as a key component of this vision, serving as a focal point for economic growth and development. Not Just Football While high-profile football transfers have grabbed headlines, it's essential to recognize that Saudi Arabia's investments transcend this single sport. The Public Investment Fund (PIF), the sovereign wealth fund of Saudi Arabia, has not only sought out top talent but has strategically engaged in various sports ventures with global significance: 1. Football: Acquiring a majority ownership stake in Newcastle United for $409 million, bolstering the club's stature in the English Premier League. 2. Golf: Committing at least $2 billion in funding to back LIV Golf, a move aimed at making the sport more accessible and popular in Saudi Arabia. 3. Formula 1: Hosting the Saudi Arabian Formula 1 Grand Prix, which has attracted global attention and further established Saudi Arabia as a sports destination. 4. WWE: In 2018, Saudi Fund and WWE agreed to a 10-year deal worth 1 billion USD, leading to numerous high-profile events in the country. 5. Boxing: Saudi Arabia hosted two Anthony Joshua fights, investing approximately 100 million USD to host these globally significant events. 6. E-Sports: The acquisition of ESL Gaming for 1 billion USD, followed by a merger with FaceIt (acquired for 500 million USD), forming the ESL FaceIt Group, a powerhouse in the e-sports industry. Hang On, Hasn’t China Done This Already? While China did embark on a journey to invest in sports, the results were not as favorable as Saudi Arabia's. China's rise as an economic powerhouse was largely built on producing low-cost commodities and then exporting them for profit. However, as production costs rose and global competition intensified, China sought to transition into a middle-income country by expanding into the services sector, including sports. The challenges China faced in its sports investments were multifaceted. Socialist characteristics within the country led to civil unrest as sports figures earned significantly more than the average citizen, creating inequality and discontent. In contrast, Saudi Arabia's monarchy structure affords greater stability and control over such disparities. Moreover, Saudi Arabia's strategic location and favorable climate have made it an attractive destination for sports events, drawing global attention. 'Sportswashing' Controversy Critics have raised concerns that Saudi Arabia's substantial sports investments are not solely for economic benefits but also serve as a means to divert attention from the nation's controversial events. This phenomenon, known as 'sportswashing,' involves using sports achievements to distract from and overshadow political or human rights issues. While this remains a valid point of contention, it is essential to acknowledge that sports investments have become a legitimate driver of economic growth in the country. The Globalisation of Sports The Major League Soccer (MLS) in the United States is also experiencing the influence of Saudi Arabia's sports investments. As the league focuses on expanding its reach beyond Europe, particularly into Latin America, it is positioned to disrupt the global sports landscape further. Saudi Arabia's investments have catalysed changes worldwide that are contributing to the globalisation of sports. Saudi Arabia's multi-billion-dollar investments in sports have fundamentally altered the global sports landscape. From high-profile football transfers to hosting major sporting events and investments in various other sports, Saudi Arabia has leveraged its resources and strategic vision to become a significant player in the world of sports. While concerns about 'sportswashing' persist, the economic impact and influence of these investments cannot be denied. As Saudi Arabia continues to shape the future of sports, the world will undoubtedly keep a close eye on its evolving role in this dynamic industry. Check out the latest episode of Money Matrix to get Seb and Micky’s perspectives on this topic. And make sure you sign up to the Blocks2Bags newsletter to find out the latest on stories like this, and stay in the loop with the business, finance, and tech world!


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