Why Saudi Arabia Wants To Own World Football

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Today At A Glance:

Cristiano Ronaldo, Karim Benzema, and Neymar have joined the Saudi Pro League on nine-figure annual contracts. And the oil-rich league isn’t slowing down anytime soon, bidding to host marquee FIFA events and compete with Europe’s top football clubs. So today’s newsletter examines the league’s overall strategy and the impact that it will have on the global sports landscape.

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Friends,

On Saturday, Neymar arrived at the private airport in Paris. He jumped out of a luxury sprinter van with three others and boarded a private Boeing 747 airplane.

The plane was sent to Paris by Prince Al Waleed bin Talal, the cousin of Saudi Prime Minister Mohammed bin Salman Al Saud. And it’s one of the world’s most luxurious aircrafts, containing several bedrooms, a spa, a grand piano, a 14-person dining table, a prayer room, a movie room, and an elevator connecting all three floors.

But Saudi Prince Al Waleed bin Talal didn’t need the airplane, as he also owns an Airbus A321 and a Hawker Siddeley 125. So he loaned the $500 million custom plane to Neymar, so his six-hour flight to Saudi Arabia was that much more enjoyable.

And that’s not it — because when Neymar arrives in Saudi Arabia’s capital city, Riyadh, his two-year, $327 million contract reportedly grants him access to a fully-staffed luxury mansion and a fleet of private jets, helicopters, and supercars.

Neymar’s Al Hilal Contract

• $326 million over two years ($3.1M per week)

• A private plane and fully-staffed mansion

• $546,000 per social media post promoting Saudi Arabia

• $87,000 bonus for each Al Hilal win

Add in the fact that Saudi Arabia had to pay a ~$100 million transfer fee to Paris Saint-Germain even to get Neymar, and the deal doesn’t sound believable, much less real.

But that’s the world we live in today. Saudi Arabia has spent billions on every sport, from golf and WWE to Formula 1 and esports. And now, the oil-rich country wants to upend the world’s most popular sport by building up the Saudi Pro League (SPL).

The Saudi Pro League (SPL) is the highest division of association football in Saudi Arabia. The competition began in 1976, and the league was most recently ranked as the world's 58th strongest domestic football league.

Strongest Domestic Football Leagues

1. Premier League (England)

2. Bundesliga (Germany)

3. La Liga (Spain)

4. Serie A (Italy)

5. Ligue 1 (France)

   * For context: Major League Soccer (MLS) is currently ranked 16th

But with Saudi Arabia’s Crown Prince concerned about the country’s dependence on fossil fuels —oil accounts for 42% of Saudi Arabia’s total GDP and 90% of the country’s export earnings — the Saudi Pro League is being drastically revamped.

For example, in June 2023, Saudi Arabia’s $650 billion sovereign wealth fund took control of four Saudi Pro League clubs: Al Nassr, Al-Ahli, Al-Ittihad, and Al-Hilal.

The country now owns a 75% stake in each of the four clubs, effectively providing them with a bottomless pit of cash to go out and sign some of the world’s best players.

And that’s precisely what they have done. Players like Cristiano Ronaldo, Karim Benzema, N’Golo Kante, Malcom, Sadio Mane, Riyad Mahrez, Jota, and many more have signed on the dotted line to play in Saudi Arabia, leaving behind their former teams to accept salary increases ranging from $20 million to $200 million annually.

(Chart: Sportico)

And let’s not forget about Lionel Messi and Kylian Mbappé, who each turned down billion-dollar contracts that would have made them the world’s wealthiest athletes.

• Lionel Messi: Turned down a 3-year, $1.6 billion offer ($533 million per year) from Al-Hilal.

• Kylian Mbappé: Al Hilal submitted a $332 million transfer offer for Mbappé to Paris Saint-Germain. According to Fabrizio Romano, Al Hilal also offered Mbappé a whopping $221 million salary to play just 1 season for the club.

Still, the Saudi Pro League isn’t done. They reportedly want to sign 50 players from major European leagues (they have already signed 30). They want to increase annual revenue from $120 million to $480 million by 2030. And they want to become a Top 10 league by 2030, making SPL the go-to league outside of the European Big 5.

But more importantly, Saudi Arabia wants to use its domestic league as a trojan horse to secure some of the sport’s biggest events. The FIFA Club World Cup, for instance, will be hosted in Saudi Arabia later this year. The kingdom has also secured the Asian Cup in 2027 and is expected to be one of the final bids to host the 2030 World Cup.

• FIFA events being hosted in Saudi Arabia

  • 2023 FIFA Club World Cup (first FIFA event in the kingdom since the 1997 Confederations Cup)

  • 2027 Asian Cup

• FIFA events Saudi Arabia is bidding on or expected to bid on

  • 2026 Women’s Asian Cup

  • 2030 FIFA World Cup

Now, many people are saying this type of investment isn’t sustainable. They’ll point to the Chinese Super League, which saw Chinese billionaires invest vast sums of money in eight-figure transfer fees and crazy salaries for some of the world’s top players (Oscar, Hulk, Alex Teixeira, etc.), only to disappear during the pandemic.

But Saudi Arabia’s investment feels different. For one, the government is using its $650 billion sovereign wealth fund to bankroll the teams, transfers, and salaries. And that money will not run dry anytime soon, whether there is another pandemic or not.

Secondly, I would argue Saudi’s investment in football isn’t damaging the global game nearly as much as people say. There is the sportswashing element, of course. But that is an entirely separate issue. And Saudi’s cash is actually helping many top clubs.

Take Neymar, for instance. Not only would no European team pay anywhere close to $327 million for his services, but PSG would have never gotten a $100 million transfer fee from anyone else. And the same logic applies to virtually all of the other big-name players Saudi Arabia has signed, most of which are on the wrong side of 30 and only went to Saudi Arabia because they were the largest financial offer.

So while the country appears to be upending the traditional football structure by injecting large sums of money into the world’s most popular sport. In some weird way, they are actually helping the world’s biggest clubs that have been facing financial pressure from the rising salaries occurring throughout the sport’s five biggest leagues.

And that’s why the Saudi Pro League is not a threat to the top European leagues.

But remember, this money isn’t being spent to develop the world’s best football league. Instead, it is being spent to improve Saudi’s image, attract marquee events, and turn the country into a tourist destination like Dubai. And that’s how Crown Prince MBS plans to diversify the economy away from fossil fuels in the long run.

If you enjoyed this breakdown, please consider sharing it with your friends!

I hope everyone has a great day. We’ll talk on Wednesday.

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Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 100,000+ others who receive it directly in their inbox each week.

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