By James M. Dorsey
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Since arriving in Saudi Arabia five months ago, soccer superstar Ronaldo has scored 14 goals in 16 games for his new club, Al Nassr. Yet, more was needed for Al Nassr to win the Saudi championship or advance in the Saudi Cup.
Even so, Mr. Ronaldo’s presence has helped improve the competitive “mentality of the dressing room and the club,” according to former Singapore international Sasi Kumar.
Mr. Ronaldo has also significantly enhanced Al Nassr’s following on social media. Tabloid reporting on his luxurious lifestyle, unmarried cohabitation with his partner, Georgina Rodriguez, and Instagram photos of Ms. Rodriguez in a bikini help Saudi Arabia project itself as a socially more liberal society, no longer bound by strict Islamic norms.
Saudi Arabia hopes to build on Mr. Ronaldo’s initial contribution to attract other superstars who will help propel the Saudi Pro League into the world’s top ten.
Former Real Madrid forward Karim Benzema has signed a deal to join the kingdom’s Al Ittihad football club on a three-year deal.
As part of its effort, the kingdom this week transferred ownership of its four top clubs, including Al Nassr and Al Ittihad, to its sovereign wealth fund, the Public Investment Fund (PIF). The transfer allows PIF to invest hundreds of millions of dollars in acquiring players and preparing the clubs for privatization.
Mr. Ronaldo has a US$225 million, three-year contract with Al Nassr. Officials did not disclose Mr. Benzema’s salary. Lionel Messi, an ambassador for Saudi tourism, reportedly turned down a US$1 billion contract.
In addition, Saudi Arabia acquired English Premier League club Newcastle United in 2021 for US$373 million.
Saudi Arabia’s rationale for boosting sports in general, and particularly soccer, makes perfect sense. Sport is a key pillar of Crown Prince Mohammed bin Salman’s effort to diversify the Saudi economy and make it less dependent on oil exports.
The kingdom hopes to increase Saudi Pro League revenues from 455 million Saudi riyals (US$ 121 million) in 2022 to 1.8 billion riyals (US$480m) annually by 2030.
Saudi Arabia further expects its strategy to generate private-sector investment opportunities and increase the market value of the Roshn Saudi League from three billion riyals (US$799 million) to more than eight billion riyals (US$2.1 billion) by 2030. It also assumes sports will boost tourism, another key pillar of Mr. Bin Salman’s economic diversification plan.
In addition, promoting sports has public health significance in a country where more than 50 per cent of the population is overweight, and more than 20 per cent are obese. Moreover, Saudi Arabia has the Middle East’s second-highest diabetes rate and seventh-highest in the world.
Finally, massive investment in soccer and sports helps Saudi Arabia garner soft power and project itself on the international stage, polish its image tarnished by human rights abuses, and position the kingdom as the region’s top dog, in part by moving the centre of sports gravity away from Qatar, which last year hosted the World Cup, and the United Arab Emirates that fathered Gulf involvement in global soccer with its acquisition of Manchester City in 2008.
The question is not the kingdom’s rationale for emphasising sports but whether its approach can succeed.
If Mr. Messi’s rejection of a Saudi offer suggests that money cannot buy everything, so does China’s experience. China’s lesson is that money alone does not buy sustainable performance or mandatory organic growth, even if a massive investment is geared towards those goals rather than relying on superstars nearing the end of their careers.
China has yet to climb the ranks of FIFA, the sport’s governing body, or emerge as an Asian soccer powerhouse despite investing billions of dollars in tens of thousands of academies and schools offering special football education over the last decade and the acquisition of top foreign players such as Carlos Tevez, Alex Teixeira, and Oscar.
This week’s merger between golf’s PGA Tour, the longstanding organizer of the sport’s flagship events, and LIV Golf, its Saudi-backed US$405 million, 14-tournament league rival, tells a similar story. The merger is as much a tale of the kingdom successfully wielding its financial muscle to gain substantial influence as it is a story of money buying a lot but not everything.
Money allowed Saudi Arabia to grease the merger and improve its weak negotiating position. Two years into its existence, LIV Golf signed top players with mouth-watering financial packages but failed to attract corporate sponsors and new star players and garner credible television ratings.
In addition, litigation threatened to put the PIF’s secretive decision-making in the public domain after a US federal judge ordered the fund to answer questions and produce evidence as part of the discovery process in a legal battle between LIV and PGA.
The merger ended the litigation that could have led to LIV Golf being deemeda foreign influence campaign in the United States This would have meant that its US employees had to register as foreign agents under the Foreign Agent Registration Act, or FARA.
In another dent in its sports blitz, Saudi Arabia suffered a setback when Egypt withdrew from plans to be part of a joint bid that would also include Greece for hosting the 2030 World Cup.
The withdrawal undermined Saudi hopes of circumventing standard FIFA practice to rotate tournaments among regions by packaging its bid as a tricontinental offering. In principle, FIFA’s practice would have mitigated against awarding the tournament to a Gulf state so soon after the Qatar World Cup.
To secure buy-in from its proposed partners, the kingdom had reportedly agreed to foot Egypt and Greece’s infrastructure and other costs in exchange for the right to host most 2030 World Cup matches.
Setbacks notwithstanding, Saudi Arabia is set to make a continued splash with its high-profile, well-funded sports initiative that also includes the hosting of multiple global and regional events such as this year’s FIFA Club World Cup, the 2027 Asian Cup, and chess, boxing, and horseracing tournaments as well as potential bids for the acquisition of Formula 1 and World Wrestling Entertainment.
All of which will keep the kingdom, already a regional soccer powerhouse, in the limelight. What it will not do is ensure that Saudi Arabia becomes an all-round sports performance dynamo and a major top-level international competitor.
Saudi investment in infrastructure and sports academies is a key step in that direction. The kingdom has already embarked on that road. Nevertheless, the ultimate litmus test of the kingdom’s sports strategy will be the development of a sports culture in which Saudis excel at the grassroots and elite level rather than employing financial muscle to purchase sports prominence off the shelf.
The question of what the Saudi sports strategy should emphasis is brought into sharp relief by doubts about the kingdom’s ability to fund its grandiose Vision 2030 development plans.
S&P Global Ratings warned this week that “the Saudi banking system alone cannot provide funding to vision 2030” as deposit growth has not kept pace to fund the expansion in loans, and foreign reserves fell in April to the lowest in more than 13 years, down more than 44% since its 2014 peak.
Dr. James M. Dorsey is an award-winning journalist and scholar, an Adjunct Senior Fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies, and the author of the syndicated column and podcast, The Turbulent World with James M. Dorsey.