Saudi Arabia has recently been one of the hottest topics in the international sports world. Let’s start with a few particularly well-publicized examples.
Newcastle United, founded in 1892, came under Saudi Arabian ownership in the fall of 2021. The purchase price was approximately EUR 350 million.
The launch of the Saudi-funded LIV tour threw the golf world into turmoil last year. The initial capital was 370 million euros. Last week, the golf world got another shock twist when it was announced that the PGA Tour, LIV and European Tour are merging.
The first Formula 1 race was held in Saudi Arabia in December 2021. In March 2022, the F1 weekend was continued, despite a missile strike near the track in Jeddah during practice. The value of the ten-year contract between the Saudis and F1 is 600 million euros.
Ukrainian boxing star Oleksandr Usyk defeated by the British Anthony Joshua in the heavyweight division of boxing in the fall of 2022 in Jeddah.
Cristiano Ronaldo plays for Al-Nassr with an estimated annual salary of more than 200 million euros.
It all boils down to three letters: PIF. But what was this PIF?
The state investment fund and its goal
PIF stands for Public Investment Fund. It is the Saudi Arabian government investment fund, which was established in 1971 to carry out investment activities on behalf of the country’s government.
Nowadays, the fund is controlled by the crown prince Mohammed bin Salmanwho is considered the de facto leader of Saudi Arabia — especially when King Salman was alive Salman bin Abdul-Aziz Al Saud87, is in poor health.
Researcher of international economic policy Alexis Montambault-Trudelle wrote, that state investment funds have penetrated more and more significantly into the global financial markets. According to the researcher, PIF is the fastest growing government investment fund.
It is estimated that more than 60 percent of PIF’s investments have been made within Saudi Arabia. PIF balances between political and business interests. PIF’s investments in Saudi Arabia are mostly aimed at groups whose owners belong to the country’s commercial elite and have long-term relations with the Saudi ruling family.
The daily operations of PIF are managed by the governor Yasir al-Rumayyan. The same man starts at the head of a new golf organization when the LIV tour, the European tour and the PGA agree to merge.
SWFI (Sovereign Wealth Fund Institute) studies ownership of public funds and sovereign wealth funds. According to The value of PIF is 650 billion dollars, or about 604 billion euros. At the top of the three are the Norwegian Oil Fund (officially the pension fund of the Norwegian government), the Chinese State Investment Fund and the Chinese SAFE (State Administration of Foreign Exchange), which have made strong results this year.
The Washington Post wrote at the beginning of the year, that the importance of PIF in the development of the Kingdom of Saudi Arabia is growing more and more enormous. PIF’s goal is to increase its assets to two trillion dollars by 2030.
Whether it’s acquiring sports clubs or building new cities in the desert, PIF’s goal is to diversify Saudi Arabia’s oil-dependent economy and increase Saudi Arabia’s influence globally.
Closed Saudi Arabia has also reformed as part of its Vision 2030 plan. In 2018, Saudi Arabia became the last country in the world to allow women to drive and movie theaters were allowed after more than 40 years of prohibition.
Bin Salman has been keen to invest in new technologies. Investments have also been made in tourism and travel by building luxury and entertainment centers.
Many of Saudi Arabia’s neighboring countries have been more successful in reforming their economies and attracting foreign investors and tourists, which has forced Saudi Arabia to open up and compete, Saudi researcher Anna Vidén The Swedish Foreign Policy Institute told STT in 2021.
Look at sports
Saudi Arabia’s and PIF’s investments in sports and entertainment continue. Saudi Arabia’s Vision 2030 includes the construction of Qiddiya. So Saudi Arabia is building an entire entertainment city 40 kilometers away from the capital Riyadh.
It is explained on the Visio 2030 website About PIF’s project, which aims to create an entertainment, sports and arts capital that offers “innovative, immersive and unparalleled experiences on an unprecedented scale”.
A golf icon is planned for the entertainment oasis Jack Nicklaus named after a golf course, a football stadium, a water park and a speedway. Prince Khalid bin Sultan Al-Abdullah Al-Faisal announced in March that in the future two F1 races per season would be run in Saudi Arabia.
Saudi Arabia is believed to be bidding for the 2030 FIFA Men’s World Cup along with Egypt and Greece.
Read also: Comment: “Welcome to Saudi Arabia 2030!” – Fifa and Gianni Infantino got billions and broken promises from Qatar, and nothing will change
Winter is also coming to Saudi Arabia. In the fall of 2022, Saudi Arabia was awarded the 2029 Asian Winter Games. Saudi Arabia is building a 505 billion euro futuristic urban environment in the desert, in the mountains of Trojena, which includes a year-round winter sports center.
In early June, PIF announced that it had taken control of four Saudi Arabian football league teams: Al-Ahli, Al-Ittihad, Al-Hilal and Al-Nassr. Cristiano Ronaldo plays in the latest.
Awarded as the world’s best male player last year Karim Benzema transferred to Al-Ittihad. According to media reports, the contract includes bonuses for advertising the hosting of the World Cup.
The fact that one and the same entity owns 75 percent of each team playing in the same league is, of course, strange. According to PIF, the goal is to promote investment opportunities in the sports sector, the professionalism, administration and financial sustainability of sports clubs, and to improve the clubs’ competitiveness.
More top players are being attracted. A lot of well-known top footballers have recently been linked to Saudi Arabia, among others Sergio Busquets34, and Luka Modric37, but also younger players such as N’Golo Kante32, and Wilfried Zaha30.
Read also: Analysis: The Finnish coach became part of Saudi Arabia’s game – Rosa Lappi-Seppälä is hardly the last to be wooed by the country
Criticism
From a Western point of view, Saudi Arabia’s plans and the PIF cause enormous criticism. Of course, other Persian Gulf countries have also come to the sport with a rush.
For example, Manchester City, which celebrated winning the Champions League on Saturday, is owned by Abu Dhabi United Group, and last year the eyes were on Qatar when the World Cup was played there.
Each country has its own characteristics and problems, but from a human rights perspective, Saudi Arabia is considered one of the worst.
Experts have assessed the extent to which people are free from government torture, political murders and forced labour, and to which extent the freedoms of movement, religion, expression and association are realized. In this human rights index the best reading is 1 and the worst is 0.
Last year, Sweden’s reading of 0.97 was the best. Finland’s reading was 0.95. Saudi Arabia’s reading was 0.14 and only seven countries were found behind it.
Criticism can be summed up in one word: sports underwear. In this case, it refers to Saudi Arabia’s effort to polish its image through sports.
– It’s about soft power, i.e. an effort to erase the image of a state that is conservative and strongly religious, professor of Middle Eastern studies Hannu Juusola summarized for Urheilu in the winter.
Juusola said that despite certain reforms, such as movies and pop concerts, critics actually have less space in Saudi Arabia than before and the development of democracy has gone backwards.
– The political leadership liberalizes the system, but at the same time fears that it will lead to growing political criticism of the system and suppress dissenters. The same was seen in Russia during the Sochi Olympics and World Cup football.
For example, from the beginning of the year The Guardian reportsthat professor of law Awad al-Qarni received a death sentence for his social media use. The grounds included that al-Qarni had used social media to share opinions that the administration deemed “hostile.”
Analyst at Play The Game, an organization that promotes transparency and freedom of speech Stanis Elsborg wrotethat Saudi Arabia has become one of the hottest topics in international sports.
According to Elsborg, Saudi Arabia has realized that sports offer a great tool for gaining political goodwill.
– That is why the Saudi Arabian administration is involved in this for the long term. The question is how the sports world will react to a regime that has a human rights record like Saudi Arabia’s but commits and invests so much in the world of sports. So far, the sports world has rolled out the red carpet.
You can listen below on Friday 9.6. published News podcast. Football reporter Saku-Pekka Sundelin analyzes in Uutispodcast what the bottomless coffers of the Persian Gulf oil giants are doing to football.
In autumn 2022, before the World Cup in Qatar, the news podcast discussed sports washing.