Xabier Rodríguez / The Jump
After the football season, the transfer market reopens. Real Madrid has already closed the millionaire signing of the Englishman Bellingham. Barcelona, immersed in a deep economic crisis, has adjusted spending and its star signing, the Turkish Gundogan, has arrived for free from Manchester City. Everything within the expected and foreseeable. The extraordinary has come from the hand of the Saudi clubs, capable of offering disproportionate amounts against which European clubs can hardly compete.
Last December, the Al Nassr club announced the signing of Cristiano Ronaldo and made him the highest paid footballer in history. Already then, from Saudi Arabia they anticipated that new hires would follow. At the beginning of June, the Al Ittihad club presented Karim Benzema as its brand new star. Real Madrid failed to convince the player to accept their renewal offer and the Frenchman decided to change teams in exchange for a salary estimated at 200 million euros per season. Both signings are interpreted as golden retirements, nothing that is not usual among footballers who face the end of their careers.
The strength of Saudi soccer began to worry when the signing of players wanted by the big European clubs was announced, when they began to compete with the richest in the soccer industry. Chelsea’s Senegalese Kalidou Koulibaly was on the agenda of several of Europe’s top clubs, but he ended up accepting Al Hilal’s offer. The same team that managed to win over Barcelona and signed the Portuguese striker Rubén Neves. In both cases, the players have prioritized salaries that are beyond the reach of the most renowned teams in world soccer, despite the fact that the Saudi league is much less competitive.
The entry of the PIF in football
This offensive against the European football oligopoly became public at the beginning of June, when the Saudi government announced what is called the Sports Clubs Investment and Privatization Project. In a country where it is often not easy to distinguish between public and private money, the acquisition of the four main football clubs by the sovereign wealth fund Public Investment Fund (PIF) has been called privatization. In this way, the investment fund now owns 75% of each of these clubs, leaving the remaining 25% in the hands of a foundation, with which control, which until now was in the hands of businessmen linked to the royal family, will be managed more directly by the PIF. A slight change that contains a transcendental step.
Like Qatar or the United Arab Emirates, Saudi Arabia also has its own Vision 2030 plan, in which sport plays a strategic role in reducing economic dependence on oil.
Because, whoever follows the news of the Arab countries and their links with football, will not be surprised to know that, like Qatar or the United Arab Emirates, Saudi Arabia also has its own Vision 2030 plan. Sport has a strategic role in this plan to reduce economic dependence on oil. This is how the designation of Trojena as the venue for the 2029 Asian Winter Games is understood, the Dakar rally dispute in the Arab country and also this new project to turn the Saudi league into one of the most important in the world.
For years the government has been seeking to attract foreign capital to the country and it also wants to do so through sports. In the case of soccer, the objective is to bring some of the best soccer players on the planet to the country, raise the level of the competition and thus attract a greater number of viewers, until turning the Saudi league into a much more attractive product for television and sponsors. Without forgetting the added value that football has in the facelift of the State abroad and, fundamentally, towards international investors.
a repeated pattern
This Saudi idea is not new. Since the main European clubs began to sign the best soccer players in America in the 1950s, a gap opened up that increased in the 1990s with the boost of income from television. Since then, several countries have made heavy investments with the aim of growing the local league and their examples can serve to gauge the Saudi chances of success.
Already in the 70s, the American NASL captured the attention of the whole world when the director of Warner Inc., Steve Ross, achieved what Real Madrid, Barcelona or Juventus had not achieved: get Pelé out of Brazil and convince him to sign by his team, the New York Cosmos. It was, however, a 34-year-old Pelé, attracted by money from a league that was supported by private investment from different businessmen and that had the support of politicians like Henry Kissinger.
The project worked as long as the attraction of figures of the caliber of George Best, Beckenbauer, Cruyff or Pelé himself was enough to maintain high attendance at stadiums and notable audiences on television. But the NASL was not able to consolidate itself and ended up disappearing when the interest of the fans dropped, investments fell and the big stars disappeared. The United States needed the encouragement of hosting a World Cup in 1994 to once again have a professional soccer league.
In the early 1990s, it was Japan that seduced footballers of the caliber of Zico or Laudrup and used their claim to grow the newly born J-League and be named organizers of the 2002 World Cup along with South Korea. Since then, the Japanese league has established itself with a loyal following and the claim of some international star, such as Andrés Iniesta, David Villa or Fernando Torres.
Qatar was the next preferred destination for footballers facing retirement, and the generation of Romario, Batistuta or Guardiola spent some of their last active years on the shores of the Persian Gulf. The goal of the Qataris was no secret: to organize a World Cup. Once achieved, the local league continues to attract some veteran footballer, although it has not aroused much interest among the local population.
And the most recent example has been that of the Chinese Super League. A case in which the public powers encouraged privately owned clubs to borrow, trusting in the future increase in income and also trusting in achieving the organization of a World Cup in the medium term. In little more than a decade, the adventure proved unsustainable and many of the best clubs in the Chinese Super League ended up going bankrupt or being relegated.
The Saudi pattern
On the horizon of this Saudi project is the same goal that the Japanese and Qataris have already achieved: the organization of the FIFA World Cup, the jewel in the crown of sportwashing along with the Olympic Games. Initially, they were going to stand for the election of the headquarters in 2030, the centenary World Cup, within a joint candidacy with Greece and Egypt, although, finally, the difficulties surrounding this candidacy weighed too heavily and Saudi Arabia decided to withdraw and wait. It would not be strange if they tried again for the 2034 edition. In the meantime, they will focus on raising the level of the Saudi team and, above all, that of their national league.
For the latter, they have PIF funds and the absence of a Financial Fair Play, with which UEFA limits the indebtedness of European clubs. This is how Saudi teams allow themselves to offer salaries that are beyond the reach of the greats in Europe. Thus, too, they will generate inflation that will force the rest of the leagues to raise their salary costs.
This model, however, has already encountered its first obstacles. In October 2021, PIF became the owner of English Premier League club Newcastle United. Already the acquisition of the club aroused much suspicion in the UK and it has resurfaced now that Saudi clubs have signed Mendy, Koulibaly and Kanté, all from Chelsea. Sales that would not raise doubts were it not for the fact that the investment fund Clearlake Capital has a stake in the property of the London club and, in turn, the PIF has a stake in the fund itself. Therefore, the relationship between Chelsea, Newcastle, the Saudi clubs and the PIF itself is not clear, which has led to the opening of an investigation by the Premier.
Saudi Arabia’s commitment to soccer is determined and a strong investment is expected with which they could attract some of the stars of European soccer
In any case, Saudi Arabia’s commitment to soccer is determined and a strong investment is expected with which they could attract some of the stars of European soccer. They have already achieved it with some big names, although the refusal of Messi or Modric shows that the lure of incomparable sums of money is not going to be enough. Because, just as it happened to the American NASL or the Chinese Super League, the Saudi project must become profitable in the long term and for this it must compete with the prestige of the Champions League, the Premier or La Liga. The incalculable value of these competitions is what makes European football the most attractive in the world; the one that has allowed the creation of an oligopoly around the big clubs of the continent, which requires such a high investment from anyone who wants to challenge it that, in practice, it becomes unfeasible in the long term.
In favor of the Saudi dream is the success obtained by the LIV golf circuit, financed by the PIF and which made its appearance in 2022, offering players sums well above what is usual in this sport. The threat to the traditional PGA Tour has been so important that a merger between the two circuits was announced on June 6.
So far, Saudi Arabian investments in the sports industry have achieved their goals, but football is another level. It requires much more investment and facing much greater opposition. For now, Saudi ambition does not seem to stop them.
