Sports: As 2023 unfolds, the increasing impact of Saudi Arabia on professional golf and the broader sports landscape poses not just a moral dilemma for athletes and their supporters but also, according to some opinions, a potentially existential challenge to the multi-billion-dollar professional sports sector.
A year later, the discussion has evolved, mainly shedding its focus on the alleged threat of “sports washing” and the ethical distinctions between “right” and “wrong.”
Instead, attention is now centred on the considerable wealth the Saudis could generate for these athletes as they continue their investments.
Saudi Group
Two significant occurrences instigated the transformation. First, on June 6, the PGA Tour revealed its intention to collaborate with the Saudi group financing the kingdom’s LIV Golf, previously regarded as a threat by the tour.
Subsequently, six months later, Jon Rahm, initially resistant to LIV, opted to join the league in a reported contract worth around $500 million, marking a pivotal decision by the world’s third-ranked player.
World Cup in 2034
Less sensational but almost equally significant were the ongoing discussions between the Saudis and prominent figures in professional tennis. Simultaneously, Saudi Arabia’s persistent expansion into international soccer was evident, notably with a decision facilitating their hosting of the sport’s premier event, the World Cup, in 2034.
Dan Durbin, the Director of the Institute of Sports, Media, and Society at USC, commented on the Saudi strategy: “You’re investing in sports, which is one of the few growth industries in the world.
As far as we can see, it is an almost limitless growth industry.”
Public Investment Fund (PIF)
The discussion surrounding golf took centre stage as Saudi Arabia’s Public Investment Fund (PIF), the nation’s sovereign wealth fund, was preparing the foundation for LIV in early 2022.
The pivotal moment came during an interview with Phil Mickelson. With this six-time major winner, he referred to the Saudis as “scary (expletives),” alluding in part to the journalist Jamal Khashoggi’s murder.
This marked a defining moment, framing the situation as a confrontation between the established order and the disruptive influence of Saudi Arabia, perceived by some as a battle between good and evil.
Saudi Arabia
Largely overlooked in the discourse was the deeply embedded presence of Saudi Arabia across the global economy, primarily through its provision of approximately 15% of the world’s petroleum. The discussion also needed to highlight the kingdom’s strides in sports.
A prominent figure in soccer, Cristiano Ronaldo, aligned himself with a Saudi team supported by the identical investment fund behind LIV in a deal reportedly valued at $200 million annually.
Additionally, the Saudis made a substantial offer of $500 million per year to entice another soccer icon, Lionel Messi, to join their emerging domestic league (although Messi declined the proposal).
Furthermore, the PIF wealth fund holds ownership of the Newcastle soccer club in the Premier League.
Liberty Media Corporation
As we enter 2024, there is no indication of a slowdown in Saudi Arabia’s expansive foray into various sports ventures.
Hosting a Formula One auto race has garnered scrutiny, and there were reports of the Saudis contemplating the acquisition of the entire league from Liberty Media Corporation.
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However, the deal didn’t materialize as Liberty was unwilling to sell. Additionally, the Saudis are exploring a substantial investment of around $5 billion in the Indian Premier League of cricket, with aspirations to extend its influence to other nations.
Jeddah
The ATP, responsible for organizing men’s professional tennis, has secured a five-year agreement to host one of its premier events in the Saudi port city of Jeddah.
Ongoing discussions are reportedly occurring between the Saudis and the women’s tennis tour. Reflecting the evolving dialogue, Billie Jean King, a pioneer in advocating for equal pay for women in sports since the 1970s, has indicated that introducing the sport to the kingdom might not be entirely negative despite its historical track record of suppressing women’s rights.
Earlier this year, she remarked, “I don’t think you change unless you engage.”
Durbin interprets the kingdom’s enthusiastic embrace of sports as an effort by Saudi Arabia to transcend its image solely as an oil-producing nation with a problematic human-rights record. Some might label this as the classic definition of “sportswashing.”
Sports has been at the core of soft diplomacy for decades,” he expressed. “The aim is to foster a positive perception and sentiment about your values by adhering to the principles of sports.
Saudi investment
The conclusion of 2023 and the entirety of 2024 are poised to be overshadowed by the outcomes of extensive negotiations spanning months between the PGA Tour and the Saudi investment fund, decisively shaping the destiny of LIV.
Rahm’s decision might be perceived as a proactive risk, grounded in the recognition of the inevitable reunion of the golf community. Nothing is amiss about having an additional $500 million in reserves if such a reunion occurs.
One of the primary concerns for the Spaniard regarding his relocation was the potential exclusion from the Ryder Cup. The esteemed golf team event, where players are not reimbursed for participation, was widely perceived as being off-limits for those who joined LIV, particularly on the European side.
LIV Players
Presently, even Rory McIlroy, who was initially a staunch critic of LIV, has proposed that the authorities overseeing the Ryder Cup reconsider their position and be more accommodating towards allowing LIV players to compete for Europe.
His perspective on Rahm is clear:
“You can’t criticize someone for making a decision they believe is in their best interest,” he conveyed to Sky Sports earlier this month. “Is it disheartening for me? Yes. But the golf landscape shifted on June 6.”
Demonstrating the notable influence of Saudi Arabia’s presence in golf, the collective earnings of the top 10 players on the PGA Tour surged from $86.6 million in the 2022 season to $124.1 million in 2023. Concurrently, the top 10 players on the LIV Tour amassed $159.4 million in earnings in 2023.
This sheds light on why, in 2024, the discourse within golf and the broader sports sphere is not expected to revolve around whether the transformations have been beneficial. Instead, the focus is likely to shift towards the extent of the sports universe that Saudi Arabia can acquire.
“As you benefit from a share of that wealth, it transforms from being ‘dirty’ money,” remarked Durbin.