- Saudi top-flight clubs to be privatised with the goal of making the league among the top ten in the world
- Multi-club ownership model with Newcastle United not thought to be on the cards
The Saudi sovereign wealth fund which owns Premier League outfit Newcastle United has taken majority stakes in four of the Middle Eastern country’s biggest soccer clubs, including Cristiano Ronaldo’s team Al Nassr.
The Public Investment Fund (PIF) is taking 75 per cent stakes in Al Nassr, Asian Champions League finalists Al Hilal, Al Ahli and Al Ittihad, who are understood to be interested in signing Karim Benzema after his intention to leave Real Madrid at the end of the season was confirmed.
The PIF also own an 80 per cent stake in Newcastle following the completion of a protracted and controversial takeover in October 2021. Sources close to the fund have told the PA news agency that the move to take controlling stakes in the four Saudi Pro League clubs does not constitute the creation of a multi-club ownership model involving Newcastle.
Each club will be managed by an independent board and have separate executive management, the sources said.
The clubs in the Saudi top flight, who have technically been owned by the country’s Ministry of Sport until now, are being privatised as part of a government initiative to help the sport further develop. At the announcement ceremony, the country’s minister of sport said the changes would help the competition be among the top ten leagues in the world.
Four other clubs will also come under the control of other companies backed by the state. Saudi oil giant Aramco will buy a stake in Al Qadsia, while Neom has acquired ownership of Al Suqoor FC. The Driyah Gate Development Authority and Royal Commission for Al-Ula Governorate have also separately invested in Al Diriyah Club and Al Ula Club respectively.
Fifa has been approached for comment on the issue.
A statement on the PIF Twitter account read: ‘As part of today’s announcement of the Sports Clubs Investment and Privatisation Project, four Saudi clubs – Al Ittihad, Al Ahli, Al Nassr, and Al Hilal – have been transformed into companies, each of which is owned by PIF and non-profit foundations for each club.’
PIF said existing members of each club would be included in the four foundations and that the fund was working closely with the Ministry of Sport on the necessary regulatory procedures to complete the clubs’ transfers to their new structures as newly-founded companies alongside non-profit foundations.
‘The transfer of the four clubs will unleash various commercial opportunities, including investment, partnership and sponsorships across numerous sports,’ the PIF statement concluded.
The Saudi government said in a release from the country’s national press agency issued earlier on Monday that it hoped that as well as further bolstering participation in sport at grassroots level, the move to privatisation would raise the league’s revenues from SAR450 million (US$120 million) last year to SAR1.8 billion (US$480 million) and increase its market value to more than SAR8 billion (US$2.13 billion) by 2030.
The decision taken by Saudi authorities will give clubs even more fuel to make audacious offers to the sport’s big names, as it looks to make the Saudi Pro League an attractive destination for elite players. What’s more, the deeper funding pool should mean more money for coaching and developing Saudi players, as it looks to become a global soccer power.
In turn, this will help the country gain further legitimacy in the eyes of fans and its counterparts around the world. Without any financial regulation imposed on clubs, the league can also become a salary dumping ground for European clubs struggling to meet financial fair play (FFP) rules, complimenting the current transfer market. The high spending on soccer players will inevitably also draw accusations of sportswashing, with critics arguing that the country is diverting attention away from its human rights record.
The announcement will give the country more confidence in its soccer ambitions, particularly when it comes to its goal of hosting a World Cup. While a 2030 joint bid with Greece and Egypt has long been rumoured, it has been reported that the country is now looking at an approach for the 2034 edition. It has already looked to shore up support among African federations through a cooperation and development agreement, with a potential sponsorship of the African Super League also said to be on the cards.
PIF already is in business with the country’s top-flight, with its real estate development subsidiary Roshn inking a title sponsorship for the competition worth SAR478 million (US$127.5 million). It has denied being a direct representative of the Saudi state, having previously provided “legally-binding assurances” to the Premier League for the Newcastle takeover to occur.
However, documents from PIF’s legal team published in a court case related to the LIV Golf and PGA Tour dispute described PIF as “a sovereign instrumentality of the Kingdom of Saudi Arabia” and PIF governor and Newcastle chairman Yasir Al-Rumayyan as “a sitting minister of the Saudi government”. The Premier League has declined to comment on whether it had opened an investigation following the publication of the court documents.
PA Media contributed to this report