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Controversial mega A merger between the PGA Tour and LIV Golf in the Kingdom of Saudi Arabia It is just one step in the Kingdom’s ambitious tourism and investment strategy – and its pursuit of big-name sports is just beginning.
Saudi Investment Minister Khalid Al-Falih told CNBC’s Dan Murphy in Riyadh: “We’re kind of proponents of finding a strategy (all of the above) in sports.
“Any sport that has global and local consumers is a sport that we are interested in as an investment opportunity, not only to achieve commercial returns for investors, whether they are the Public Investment Fund or private investors, but also to improve the quality of life in Saudi Arabia, as it is part of our tourism agenda.”
The Public Investment Fund is Saudi Arabia’s public investment fund, a $600 billion sovereign wealth fund controlled by Saudi Crown Prince Mohammed bin Salman. It is being used as an economic tool for Vision 2030, a years-long project aimed at modernizing and diversifying the kingdom’s economy away from oil.
News that the PGA Tour and LIV Golf in Saudi Arabia were back together last week brought an end to a two-year battle between the two arch-rivals.
The agreement, which includes the DP World Tour — also known as the European PGA Tour — will combine the business and rights to the PGA Tour and LIV Golf in a new yet-to-be-named for-profit company.
Founded in 2021 with the goal of becoming the world’s premier professional golf tour, LIV Golf has been backed by PIF and has lured some of golf’s biggest stars away from the PGA Tour with huge paychecks. This led to litigation between the two entities until the decision to merge, which ended all pending lawsuits.
“The region is more than capable of being part of this global phenomenon, which is the latest phenomenon of the rise of sports as part of the global economy,” Al-Falih said of the Middle East. “And golf is part of it, and it’s an important part of it, and it addresses an important segment of the population that also plays and follows golf.”
Team Captain Brooks Koepka of Smash GC and Ricky Elliott shake hands on the 18th green during day three of the LIV Golf Invitational – Jeddah at Royal Greens Golf & Country Club on October 16, 2022 in King Abdullah Economic City, Saudi Arabia.
Charles LaBerge | Leaf Golf | Getty Images
As part of the PGA-LIV merger, the Saudi Public Investment Fund is now the exclusive investor in the new golf entity, and has the right of first refusal for any new investment.
The PIF is rapidly expanding into sports, hosting Formula 1 Grand Prix and major boxing matches, and buying the English Premier League football team Newcastle United.
Saudi Arabia has also lured soccer legends Cristiano Ronaldo and Karim Benzema With contracts worth hundreds of millions of dollars to play in the local Saudi leagues, it is expected to bid to host the 2030 World Cup.
In the past few years, the huge Public Investment Fund has also It bought stakes in major companies included AmazonAnd UberAnd the alphabetAnd MicrosoftAnd BoeingAnd American bankAnd Disney And meta.
Al-Falih pointed to the power of sports in attracting tourism, but also in offering something attractive to Saudis already in the country.
He said, “Sport is an important component of the global economy, consumption, media and digital content, and it is now in our hands and laptops, and it is part of it as individuals and as families and companies.” “And of course, as investment minister, I welcome it as an opportunity for us to create more – Formula E, Formula One, boxing matches, football matches.”
“It is part of retaining our Saudi citizens and global residents who choose Saudi Arabia as their home, to stay in Saudi Arabia and consume this product that is in high demand,” the minister added, “as well as to bring global sports followers to the Kingdom for the various activities and sports that will be held here.”
The racing teams prepare on the Jeddah Corniche grid for the F1 Grand Prix in Saudi Arabia. A missile attack before the race raised new doubts about how the host’s decisions were made.
Clive Mason | Getty Images
Many human rights groups and lawmakers in other parts of the world criticize Saudi Arabia’s financial interference in the world of sports as “sports laundering”, or an attempt to cleanse its image of human rights abuses.
Saudi Arabia has It has long been criticized for its human rights recordwhich includes the imprisonment and execution of political opponents, harsh punishments including execution for members of the LGBT community, and the murder of US-based journalist Jamal Khashoggi in 2018 by Saudi agents.
CNBC has contacted the Saudi Ministry of Foreign Affairs for comment.
Portuguese soccer star Cristiano Ronaldo poses for a photo with the shirt after signing with Saudi Arabia’s Al-Nassr Football Club in Riyadh, Saudi Arabia on December 30, 2022.
Al Nasr Football Club/Handout/Anadolu Agency via Getty Images
The kingdom’s aggressive campaign to promote its image as a reformed and socially liberal country is a central part of the crown prince’s Vision 2030. It includes expanded freedoms for women – although many female activists remain behind bars – and allowing previously forbidden things like cinemas and concerts.
Seventy percent of Saudi Arabia’s population is under the age of 35, and the kingdom’s youth are digitally active and highly connected, creating a massive market for televised sports and sports events.
“We have one of the highest consumption rates per capita for many sports activities and … electronic sports and digital games,” Al-Faleh said. “The establishment of these activities in the Kingdom of Saudi Arabia, with the ownership of Saudi entities such as the Public Investment Fund, will direct this demand in positive ways and will generate commercial returns. I think it will increase the flow of investment by Saudi investors, as I said, this will improve the quality of life and make the Kingdom of Saudi Arabia Saudi Arabia is a more attractive place for international visitors to visit, come and live in our country.”
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