Key Points
The Saudi Pro League’s 2023 spending spree put it on the global football map . A host of stars such as Cristiano Ronaldo joined the league — enticed by mammoth transfer fees to leave European football. It spent more than $1 billion on transfers in 2023. Spending has since eased, although the figure so far this year has already amounted to $486 million, with more big-name signings. And now, with money splashed and the spotlight secured, the league is deploying a new strategy for greater ambitions: privatization. ‘High-risk’ strategy? Football is a core part of Saudi Arabia’s Vision 2030, a sweeping plan to diversify its economy away from oil revenues and reposition the kingdom as a global cultural and commercial hub. The country is already making major infrastructure investments for the 2034 FIFA World Cup, which it was selected to host. Kieran Maguire, host of the Finance of Football podcast, told CNBC that Saudi Arabia chose football because it is the “world’s global sport,” and part of a broader strategy “in terms of entertainment and cultural opportunities.” With that goal in mind and the league’s profile now firmly established, Saudi authorities are turning their attention to privatization. By moving from state-led spending to private ownership, the kingdom is looking to professionalize its domestic league so it can compete with the big leagues. Over this summer, the Public Investment Fund — the kingdom’s sovereign wealth fund — and the Ministry of Sports have opened the door to privatization and outside capital . Three clubs have been sold to private entities, with the first foreign deal closed in July, when U.S.-based Harburg Group bought Al-Kholood. Reports have also surfaced that the PIF and the Ministry of Sports are looking to sell their stake in the “big four” clubs of the league. Maguire said he believes privatization is the next step because the PIF has already “done the initial investment” of building infrastructure, spending, and forming a squad that will attract interest. But he also cautioned that it is a “high risk strategy,” noting the possibility of pitfalls for investors and the kingdom alike because it is “difficult for owners to make a profit from running a club” and it is “highly unlikely Saudi clubs will be run profitably.” Reasons for privatization Financial sustainability and expertise are big reasons for privatization. In emailed comments, Kristian Coates Ulrichsen, a Middle East fellow at the Baker Institute, noted a “slowing down of major new player acquisitions and few huge transfer fees since 2023,” and if clubs want to purchase a player, “they have to make room in their budget.” Noting recent budget cuts “across the board” in Saudi Arabia, Paul Williams, co-host of The Asian Game podcast, told CNBC that the league is looking at “limiting the amount that clubs can spend.” He added that “spending $1 billion each year is clearly unsustainable” for a football ecosystem. In an interview with CNBC, Ben Harburg, the new owner of Al-Kholood, likewise said that Saudi football clubs “can’t keep dumping money into clubs that are burning it every year.” He cited financial sustainability as one of the reasons for privatization. Harburg, who also has a stake in a Spanish club, said the Saudi experiment resembles what’s been tried and tested in Europe, where clubs can “make money by developing young local talent” before “selling them to bigger clubs.” Another advantage of privatization is the expertise that business owners bring. Ulrichsen said foreign investors “bring credibility and global networks” to the table, while also generating “significant foreign investment” for the kingdom. He added that private ownership could lead to “investment in training facilities and improve the professionalization of the league,” making it an “attractive destination for top players.” Privatization has been touted as the next step for the league’s global ambitions because it follows the same commercial and competitive blueprints that define Europe’s elite leagues. Williams said privatization is a move that ultimately gets the “best Saudi talent to Europe,” which would raise the reputation of its domestic league. It’s an opportunity for players to develop and reach Saudi’s “big ambitions of qualifying for the next World Cup.” What’s next after privatization? But the privatization of football alone won’t help Saudi Arabia achieve its Vision 2030 goals. Maguire said it must “have a quality product” to go beyond the sporting goals of Vision 2030 and the 2034 World Cup. Building a proper football ecosystem benefits the wider Saudi aim of diversifying away from oil. Maguire likens it to a “Trojan horse” — if the country is able to get investors “into the football side of things,” it’ll have them investing in “the broader economy.” For success beyond the pitch, Saudi Arabia must strike a balance between spectacle and sustainability. If its football playbook succeeds, it could become the catalyst for the shift away from oil.
