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The Guardian - UK
The Guardian - UK
Paul MacInnes

Why Saudi Arabia can afford to play a long game in bid to control sport

Rory McIlroy, one of the holdouts against the LIV Golf tournament, talking to the press in the wake of last week’s merger deal.
Rory McIlroy, one of the holdouts against the LIV Golf tournament, talking to the press in the wake of last week’s merger deal. Photograph: Nathan Denette/AP

It’s not often that a multi-millionaire sports star is a pawn in a global power play, but that was the situation Rory McIlroy found himself in last week. The Northern Irishman, currently ranked the third best golfer in the world, was having to explain how he felt after his long campaign to hold out against a disruptive Saudi Arabian competition had ended with the Gulf state sharing control over the entirety of his sport.

“It’s hard for me to not sit up here and feel somewhat like a sacrificial lamb and feeling like I’ve put myself out there and this is what happens,” he said.

McIlroy had reportedly turned down hundreds of millions of pounds to join a global tournament paid for by the Saudi Public Investment Fund (PIF). LIV Golf, as it was known, was a team-based competition that looked less like the traditional golfing world and more like a Las Vegas nightclub. The teams, comprised of expensively recruited stars, were called things like “Smash” and “4 Aces”. There was music playing on the fairways. Its slogan was “Golf but louder”. Donald Trump was a big fan and several of LIV’s inaugural events were held on his courses.

It was also something of a flop. LIV failed to secure a TV deal for its first season. The crowds were largely underwhelming and apathetic. Only one player ranked in the game’s top 10 signed up. Then there were the lawsuits, to and fro between LIV and the PGA Tour, the traditional powerhouse in the men’s game.

It was a year of acrimony the likes of which the buttoned-down sport had never seen. And then, suddenly, it was over. On Tuesday morning, the PGA announced that it was to merge with LIV and the Europe-based DP World Tour, “a landmark agreement to unify the game of golf, on a global basis”.

Saudi Arabia has a 10-year deal to stage Formula One races.
Saudi Arabia has a 10-year deal to stage Formula One races. Photograph: Alamy

The news was a bombshell in the world of sport, prompting intense speculation as to whether Saudi Arabia had effectively bought golf. It also raised questions over what the country wants to achieve with its expansive strategy of investing in professional sport and to what extent it hopes to “sportswash” its abhorrent human rights record.

For golf is not the only sport Saudi Arabia has spent the past year trying to disrupt. On the same day as the golf deal was announced, Karim Benzema, the current world footballer of the year, was on his way to Riyadh to ply his trade for the Saudi Pro League team Al-Ittihad, on a two-year deal thought to be in the region of £160m. Benzema is not the first – he joins Cristiano Ronaldo, who signed for a rival club, Al-Nassr, in January – but he won’t be the last either.

At times last week it seemed as if every ageing world-class footballer was being linked with a Saudi club. The wages those clubs, four of which are now owned by the PIF, can pay far exceed anything even the biggest clubs in Europe can afford. The influence of Saudi money has reached the shores of the UK with the PIF’s ownership of Newcastle United, while the country also hopes to host the 2030 World Cup.

Saudi Arabia has a 10-year deal to host a Formula One Grand Prix each season, and the rumour is they would already like to host another. Meanwhile, the world of boxing increasingly revolves around Jeddah and Riyadh rather than Madison Square Garden and Wembley. Anthony Joshua was a pioneer when he took his championship rematch with Andy Ruiz Jr to Saudi Arabia in 2019; now he is one of four heavyweights, alongside Tyson Fury, Oleksandr Usyk and Deontay Wilder, thought to be lined up for a “mega show” in the country at the end of the year.

With its estimated reserves of more thasn £500bn, PIF can afford to spend big. And, according to Kristian Ulrichsen, a fellow for the Middle East at Rice University’s Baker Institute for Public Policy in Houston, these deals are based on what he describes as a “non-conventional return on investment”. The benefits, he argues, “are likely to be based as much on strategic as commercial objectives, and the return may be as much intangible as quantifiable”.

Anthony Joshua’s big-money bout against Andy Ruiz Jr in 2019.
Anthony Joshua’s big-money bout against Andy Ruiz Jr in 2019. Photograph: Richard Heathcote/Getty Images

“The strategic aspect of the deal is that golf reaches an affluent segment of ‘middle America’ and contributes to changing the way people think and talk about Saudi Arabia, away from a narrative rooted in 9/11, the killing of Jamal Khashoggi, and the war in Yemen.”

Saudi officials have claimed the investments having nothing to do with geopolitics. “We host it for the people, for the youth,” said the Saudi sports minister, Prince Abdulaziz bin Turki al-Faisal, of the grand prix this year. “There’s a big interest, but also a big participation for the community in the kingdom. When we hosted the Joshua-Ruiz Jr fight, there were just six gyms in Saudi Arabia that had boxing. Now we have 57, and the participation in the sport grew by 300%.”

It’s possible to raise an eyebrow over these claims. As the London Olympics proved, top-class sporting events do not guarantee a sporting legacy, no matter how grand the infrastructure. Similar question marks hang over the global sporting strategy. Newcastle have qualified for the Champions League in their first full season under PIF ownership, following a path laid out by Saudi’s gulf rivals the UAE, and Abu Dhabi’s Sheikh Mansour bin Zayed al-Nahyan, who owns Manchester City. But bigger LIV-style gambits come with issues.

“The challenge with LIV was always going to be its legitimacy as a competition,” says Omar Chaudhuri, chief intelligence officer at sporting consultancy Twenty First Group. “That’s one of the big markers of sport, right? Sport has to feel like it means something.”

Crown Prince Mohammed bin Salman watching the 2018 World Cup in Moscow.
Crown Prince Mohammed bin Salman watching the 2018 World Cup in Moscow. Photograph: Getty Images

It could be that PIF’s strategy, driven not by annual financial results but by the ambitions of its ruler, Crown Prince Mohammed bin Salman, means it can operate on a different timescale to practically every other stakeholder in sport. Bin Salman’s grand document, Vision 2030, wants his country’s economy to diversify away from a reliance on oil. And while investments might not deliver a grand return now, they may in future.

“I think as it stands, probably not,” says Chaudhuri of Saudi football’s chance of creating a financially successful product. “But ultimately if you get to a stage where you’ve got legitimacy and control of the entire ecosystem then you certainly can. The levels of money we are seeing are completely out of whack with what we are seeing in other investment scenarios.”

There is a way it works out financially, Chaudhuri suggests, but it’s not one that sports fans elsewhere in the world may appreciate. “If you get to the stage where you have control of the ecosystem it gets a lot easier to control costs, manage the commercialisation of your asset and so on. It wouldn’t surprise me if there was a world, perhaps not in 10 or even 20 years’ time, maybe 40, where from a purely financial point of view these investments make a lot more sense.”

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