Iran war, sports boom crumbles: Desert earthquake: Saudi Arabia sends stunning shockwaves

Iran War, Sports Boom Stumbles

Desert Earthquake: Saudi Arabia Sends Shocking Shockwaves

A new era of Saudi Arabia in the global sports world has begun: Riyadh turns off the money tap, cuts funding for the LIV Golf Tour, and juggles clubs. Behind this are new strategies of the kingdom, the 2034 World Cup – and bombs in Iran.

Approximately five years ago, Saudi Arabia launched an attack on global sports. It struck established, mainly Western players in the heart.

After billion-dollar investments in boxing, the kingdom then acquired a majority stake in the English Premier League club Newcastle United through the state investment fund PIF. It soon made significant parts of the financial ecosystems in sports such as football, motorsport, tennis, cycling, e-sports, and mixed martial arts dependent on Saudi financing. Close relationships were built with FIFA, and in golf, a new LIV Tour sparked a sports civil war.

Now Saudi Arabia is sending shockwaves into the sports world once again. But this time, global heavyweights tremble as the kingdom turns off the money tap. Because the Saudi sports boom has stalled – and the one trillion US dollar PIF (aiming for two trillion by 2030) is readjusting its entire strategy.

Sportswashing and LIV Golf

In December 2024, when Saudi Arabia single-handedly won the bid to host the 2034 FIFA World Cup, it seemed that anything was possible for Riyadh in sports. Even though the kingdom faced accusations of sportswashing – diverting attention from human rights abuses in the country through sports events – an imminent hosting of the Olympics was considered as inevitable as given. Looking back, this was likely the peak of Saudi Arabia’s attempt to take over global sports.

The tide has turned. The Asian Winter Games in 2029, long considered a dress rehearsal for the Olympics, had to be handed over to Kazakhstan because the Trojena ski resort on the Red Sea would not be completed in time. And during the week, the kingdom surprised everyone with two groundbreaking steps that show its increasing retreat from the world of sports.

As reported by the Financial Times, PIF is on the verge of withdrawing its support for LIV Golf. The decision caused turmoil in the sports world, as the rebellious tour was funded with over five billion US dollars five years ago and chosen as one of the key instruments for Crown Prince and de facto ruler Mohammed bin Salman to establish his country as a leading sports destination and organizer worldwide. Reports indicate that LIV has incurred billions in losses over the years and is not expected to make a profit in the next five to ten years.

Saudis with a New PIF Strategy

In a second step, on Thursday, PIF sold a 70% stake in the Saudi football record champion Al Hilal for around 373 million US dollars. Although the club remains in the family, being acquired by the Kingdom Holding Company, the company of the billionaire entrepreneur and member of the Saudi royal family, Prince Alwaleed Bin Talal. But the sale shows that PIF is increasingly relinquishing control in national sports and aiming for privatization of clubs.

Both decisions are part of a new five-year overall strategy presented by PIF on Wednesday and approved by bin Salman. The term “sport” was not mentioned in the broad investment portfolio until 2030. While sports are likely to be included in the tourism, travel, and entertainment sector, the explicit omission raised significant attention in the global sports world. Furthermore, the focus will primarily be on national investments.

In the English media, there has been much debate about Saudi support for the struggling Newcastle United in the Premier League with German national player Nick Woltemade. The club is making profits, but PIF has also invested heavily, and the construction of a new stadium is delayed, fueling speculation.

While successful e-sports and disciplines like boxing, MMA, and Formula 1 are still financed by PIF in the kingdom, sports lacking success are likely to be harshly cut moving forward. In tennis, the three-year contract for hosting the WTA Tour Finals in Riyadh, which expires in November, has not been renewed.

Private Investors for World Cup Stadiums?

The new direction of PIF aligns with the Saudi government’s argument over the past two years that due to a growing budget deficit, “budget discipline” is necessary. Even parts of the Neom mega-project had to be scaled back. In sports, money will primarily be invested in the largest prestige project, the 2034 World Cup. Eleven expensive stadiums still need to be built – reports suggest Riyadh is hoping for private investors. Additionally, investments in necessary infrastructure make the endeavor even more costly.

And then, there’s also the US-Israeli war against Iran. The Gulf states, dependent on oil and gas exports, bore the brunt of Iranian retaliations during the conflict escalation when Iran attacked energy facilities and effectively blocked the Strait of Hormuz. Although the new PIF plan was developed before the conflict escalation, PIF Governor Yasir al-Rumayyan stated on Wednesday to the Saudi TV channel Al Arabiya that they are reviewing “all investments and businesses due to the war.” Will there be even less money for sports? The war would “increase the pressure to rearrange some priorities,” al-Rumayyan said.

Above all, the war undermines bin Salman’s dreams. The powerful crown prince plans to transform his country into a dazzling trade and tourism center, independent of oil and gas, and attract foreign investments through events like sports. The withdrawal from the LIV Golf Tour is likely also related to the war.

A New Era Affects Ronaldo as Well

According to the Financial Times, PIF has become more strategic and less opportunistic in the last two years, with the fund no longer seen as a source of easy money. However, it remains financially strong, as shown by the $55 billion acquisition of Electronic Arts by a PIF-led consortium, or the recent support for Paramount in the takeover of Warner Bros Discovery.

But in the sports sector, there will definitely be fewer investments from Saudi Arabia in the future. The LIV Rebel Tour will likely continue for now, as CEO Scott O’Neil reportedly informed his employees in an email. But the Saudi retreat seems certain – and without this funding, the entire tour is likely to collapse.

The shockwaves are not only felt in golf. A new era of relations between Saudi Arabia and the global sports world has begun. Even Cristiano Ronaldo is affected. The Portuguese superstar, as hoped by PIF, is expected to eventually buy his club Al Nassr, in which he already holds a small stake.

Source: ntv.de