Messi and Benzema: Big-ticket football signings to boost Saudi economic prospects

Sports have risen to prominence in the kingdom thanks to their potential to attract foreign investment, putting the country on the world map

Karim Benzema poses with the jersey of Saudi Arabian football team Al Ittihad. Reuters

The flurry of investments made by Saudi Arabia's sovereign wealth fund in local football clubs is being viewed as part of the kingdom's strategy to strengthen its national economic diversification agenda, according to experts.

While Riyadh has consistently concentrated on a number of economic sectors, including technology, hospitality and tourism, sports have risen to prominence thanks to their potential to attract foreign investment, putting the kingdom on the world map, they said.

“This isn't about making a return on investment directly, but is more about what it will do for the long-term ambitions of Saudi Arabia,” Chris Brown, managing director of CB Football Management, told The National in an interview.

The kingdom can use football “as its vehicle to diversify and build a sustainable ecosystem relating to sport, tourism, infrastructure and the creation of jobs for Saudis”, he said.

On Monday, the Public Investment Fund announced that it had taken 75 per cent stakes in Al Hilal, Al Nassr, Al Ittihad and Al Ahli of the Saudi Pro League, with the remaining 25 per cent to be controlled by a non-profit organisation. The valuations of the stakes and terms of the deals were not disclosed.

The teams carry with them the attraction of being four of the top five clubs in the league in terms of championships won, and the legacy of having been part of Saudi football's top tier since its first tournament in 1976.

Also, on Monday, Crown Prince Mohammed bin Salman launched a new project aiming to boost the Saudi Pro League and make it one of the top 10 in the world, to attract top talent and to increase its revenue of 450 million Saudi riyals ($120 million) to more than 1.8 billion riyals annually.

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Top 10 Saudi Pro League targets - in pictures

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Overseas investments in Saudi football clubs could come from several fronts, take different forms and also present an opportunity for global brands to make their presence felt in the Middle East, said Simon Chadwick, a professor of sport and geopolitical economy at the Skema Business School in Paris.

“Absolutely, one of the outcomes that the Saudi Arabian authorities are trying to achieve is this inward investment from overseas. And it would come in terms of club ownership or private equity investment coming from the US, for instance,” he told The National.

“It could also mean investment coming from shirt sponsors. So, instead of having Saudi Arabian companies on the front of shirts, instead what we'll get is Google, Jeep or Chevrolet, or one of these other global brands appearing on there.”

Investments may also come “in the form of company head offices in auxiliary sports in the shape of research and development entities and technology to enhance different sports thus creating a positive economical impact”, Mr Brown said.

Al Nassr – tied with Al Ittihad for the most Saudi Pro League titles with nine and behind Al Hilal's 18 – made headlines in December when it signed Cristiano Ronaldo in reportedly the most lucrative player deal in football history.

That kicked off speculation that top global stars might be the next targets of Saudi clubs: Lionel Messi, another all-time great, has reportedly been linked to Al Hilal. Other big names on the list include Karim Benzema, Sergio Ramos, Luka Modric and Angel Di Maria.

“All the talk is of the right substance around long-term sustainable development, but things can change so quickly so I hope the real fundamentals of building a sport from the grassroots up are applied and done properly rather than just throwing huge money at international players and coaches,” Mr Brown said.

“There has to be a balance in order to raise the profile of the country and what it is doing in sport so blockbuster names are great but, alone, they are not the answer.”

Foreign investors, organisations and brands sponsoring football clubs are not new to the sport, as they seek to tap into its potential and, more importantly, its global appeal.

Football – known as soccer in other parts of the world to distinguish it from American football – has more than 3.5 billion fans around the world, according to World Atlas.

Fifa, football's governing body, pegs this number at about five billion. In either case, its following is a significant chunk of the global population, which was reported by the UN to have hit eight billion last year.

The Fifa World Cup, held every four years and last held in Qatar in 2022, is also one of the most watched sporting events worldwide.

On the flip side, global football has also garnered significant attention from Middle East organisations over the past several years, most notably in Europe.

In 2008, Manchester City was bought by Sheikh Mansour bin Zayed, UAE Vice President, Deputy Prime Minister and Minister of the Presidential Court. Since then, the club has won seven league titles.

Dubai's Emirates airline, meanwhile, has been the shirt sponsor of AC Milan of Italy's Serie A, Spain's Real Madrid and the Premier League's Arsenal, whose stadium is also named after the company. The world's biggest long-haul airline is also the title sponsor of England's FA Cup.

La Liga's FC Barcelona had the Qatar Foundation and Qatar Airways on their kits in the 2011-2013 and 2013-2017 seasons, respectively.

Manchester City topped the Deloitte Football Money League 2023 list, the second straight year it has done so, with revenue of about €731 million ($780 million). The combined revenue of the top 10 club football teams was pegged at more than $6.3 billion, according to the consultancy.

Fifa's revenue, meanwhile, was nearly $5.8 billion in 2022, surpassing its previous record of $4.64 billion set in 2018.

The PIF's move is about “creating more attractive commercial entities that investors will want to be associated with”, said Mr Chadwick, who noted that Saudi Arabia is focusing on football, racing and combat sports.

“What does it mean for the status of Saudi sports in general? Clearly it reaffirms Saudi Arabia's commitment to investing in elite professional sport,” he added.

“It also confirms to the world that Saudi Arabia is open for business and it does want to engage.”