Saudi Arabia strong sports industry mission

Article posted by Coliseum, June 22^nd, 2023

Image: Coliseum GSVA

The Saudi Minister of Sports, Abdulaziz bin Turki Al Saud, recently announced a significant development in the sports sector.

A ‘LinkedIn Post by Salem Badughaish, Partnership and Sponsorship Manager, Sport Talent Company,’ stated that during a presser, it was revealed that the ownership of the Saudi Arabian professional football club Al Qadsiah FC will be transferred to the petroleum company Aramco, while the Saudi Professional League (the highest division of association football in the Saudi Arabian league system) club Al Hilal SC, the UAE Pro League (the top professional football league in the United Arab Emirates) club Al-Nasr SC, the Saudi Professional League clubs Al-Ittihad and Al-Ahli Saudi FC will be transferred to the Public Investment Fund (PIF).

Saudi Aramco, officially the Saudi Arabian Oil Group or simply Aramco, is a Saudi Arabian public petroleum and natural gas company based in Dhahran. As of 2022, it is one of the largest companies in the world by revenue and has repeatedly achieved the largest annual profits in the global corporate history.

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Riyadh (Saudi Arabia)-based the Public Investment Fund (PIF) is the sovereign wealth fund of Saudi Arabia. It is among the largest sovereign wealth funds in the world with total estimated assets of US$620 billion. It was created in 1971 for the purpose of investing funds on behalf of the Government of Saudi Arabia.

The ‘LinkedIn Post by Salem Badughaish, Partnership and Sponsorship Manager, Sport Talent Company,’ further stated that the above move is part of the investment and privatization project for sports clubs launched by Prince Muhammad bin Salman bin Abdulaziz Al Saud, the Crown Prince and Prime Minister of Saudi Arabia.

The project aims to achieve the goals set out in Saudi Vision 2030 for the sports sector, which involves building a strong sports industry and encouraging private sector involvement to enhance the performance of national teams, sports clubs and athletes.

The project comprises two main aspects in its initial phase. The first involves allowing major companies and development agencies to invest in sports clubs in exchange for ownership transfer. The second aspect focuses on privatizing a number of sports clubs, with the process set to begin in the last quarter of 2023.

The project is built upon three strategic objectives. Firstly, it aims to create favorable investment opportunities and an appealing environment in the sports sector to establish a sustainable sports economy. Secondly, it seeks to enhance professionalism and improve the administrative and financial governance of sports clubs. Lastly, the project aims to elevate the quality and infrastructure of clubs to provide excellent services to sports fans, ultimately enhancing the overall spectator experience.

The transfer and privatization of clubs are intended to bring about significant advancements in various sports in Saudi Arabia by 2030. The goal is to develop an exceptional generation of athletes on the regional and global levels. Specifically in football, the project aims to elevate the game and its competitions, positioning the Saudi League among the top 10 leagues globally. Furthermore, it aims to increase the annual revenues of the Saudi Professional League from 450 million riyals to over 1.8 billion riyals and raise its market value from three billion to over eight billion riyals.

Vision 2030

Saudi Arabia’s Crown Prince Mohammad bin Salman has launched the sports clubs investment and privatization project, as part of the kingdom’s ambitious Vision 2030 reform program that seeks to diversify the economy away from heavy reliance on oil revenues.

The Saudi Vision 2030 is a strategic framework to reduce Saudi Arabia’s dependence on oil, diversify its economy and develop public service sectors such as health, education, infrastructure, recreation, and tourism.

‘Gulf Business’ stated that the project comprises two primary components. The first entails the approval of investments by corporations and public sector organizations in sports clubs in exchange for ownership transfer.

The second proposal involves privatizing sports clubs starting from the final quarter of 2023.

‘Gulf Business’ further stated that the sports clubs’ investment and privatization project will create opportunities and foster an attractive investment environment, promote professionalism and financial sustainability in sports clubs and enhance clubs’ competitiveness.

Sports are one of the pillars of the country’s global ambitions under the Vision 2030 plan that seeks to build new industries and create jobs.

Saudi Arabia said the privatization and ownership transfer of clubs will accelerate the progress of sports across the kingdom further growing participation and providing cutting-edge facilities. It will also increase competition and nurture future champions.

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