Saudi Arabia’s sovereign wealth Public Investment Fund (PIF) has acquired controlling stakes in four leading domestic soccer clubs in an effort to grow the national league.
The move by the PIF is part of the Sports Clubs Investment and Privatisation Project launched on Monday (June 5) by Prince Mohammed bin Salman.
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The fund announced it had acquired a 75% stake in Al Hilal, Al Nassr, Al Ittihad, and Al Ahli of the top-tier Saudi Pro League (SPL).
The remaining 25% will be controlled by a non-profit organization. The Saudi Ministry of Sport said each club board will comprise seven members – five appointed by the PIF and the other two by the non-profit.
In its statement on Monday, the PIF said it was “working closely with the Ministry of Sport on all the necessary regulatory procedures to complete the clubs’ transfers to their new structures as newly founded companies alongside non-profit foundations.”
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The Saudi fund stated: "The transfer of the four clubs will unleash various commercial opportunities, including investment, partnership, and sponsorships across numerous sports."
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By GlobalDataThe PIF also owns Newcastle United after its controversial takeover of the English Premier League club was approved in October 2021.
Following a protracted process, the takeover was eventually ratified after "legally binding assurances" the Saudi government would not have any control over the club.
Outside of soccer, the PIF owns the LIV golf circuit, which has rivaled the traditional PGA Tour in recent years.
The Sports Clubs Investment and Privatisation Project, which aims to encourage private investment in the sports sector, is aligned with the kingdom’s Vision 2030 and will have a particular focus on soccer.
One of the primary objectives is to transform the SPL into one of the top 10 leagues in the world.
Significant money is being pumped into the clubs to attract more star players after Al-Nassr signed Portuguese superstar Cristiano Ronaldo in December.
Frenchman Karim Benzema, Ronaldo’s former teammate at Spanish giants Real Madrid, is set to join him in the SPL and sign for Al-Ittihad this week.
The current Ballon d’Or winner will reportedly earn $643 million over three years.
Al-Hilal are keen to lure Argentina’s World Cup-winning star Lionel Messi and are understood to have presented a similarly lucrative contract.
The 35-year-old recently announced his departure from Paris Saint-Germain after two seasons in France and is now a free agent.
The Sports Clubs Investment and Privatisation Project is aiming to raise the league's commercial revenues from SAR450 million ($120 million) in 2022 to over SAR1.8 billion annually “while generating private-sector investment opportunities and increasing the market value of the Saudi League from SAR3 billion to more than SAR8 billion by 2030.”
Despite the arrival of Ronaldo, Al-Nassr were pipped to the SPL championship by Al-Ittihad this season. Al-Hilal, the competition’s most successful team with 18 league titles, finished third.
Meanwhile, Al-Ahli have been promoted back to the SPL next season after being relegated to the second tier for the first time in their history.
The ownership structure of four other Saudi clubs will also change, with oil giant Aramco taking a stake in Al Qadsia, Royal Commission for Al Ula Governorate in Al Ula Club, Diriyah Gate Development Authority in Al Diriyah Club, and Neom in Al Suqoor FC.
Prince Salman’s statement outlined that the new initiative would comprise two primary components, saying: “The first entails the approval of corporations and public sector organizations investing in sports clubs, with investment amounts corresponding to each club's value. The second component involves privatizing sports clubs starting from the final quarter of 2023.
“Three strategic objectives underpin the project: fostering investment opportunities and an appealing investment environment in the sports sector; boosting professionalism, governance, and financial sustainability in sports clubs; and enhancing clubs' competitiveness and infrastructure.
“The ultimate impact will see the provision of world-class services to sports fans, enriching the fan experience and driving community participation.”
His statement added: “The privatization and ownership transfer of clubs aims to accelerate progress in a variety of sports across the kingdom further growing participation, providing cutting-edge facilities, increasing competition, and nurturing future champions.”
Image: Yasser Bakhsh/Getty Images
