Saudi Arabia kicks off sports clubs privatisation project
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Saudi Arabia kicks off sports clubs privatisation project

Saudi Arabia kicks off sports clubs privatisation project

The project seeks to raise Saudi Pro League’s commercial revenues from SAR450m in 2022 to over SAR1.8bn annually

Kudakwashe Muzoriwa
Saudi Arabia sports clubs’ privatisation plan

Saudi Arabia’s Crown Prince and Prime Minister Mohammad bin Salman has launched the sports clubs investment and privatisation project, as part of the kingdom’s ambitious Vision 2030 reform programme that seeks to diversify the economy away from heavy reliance on oil revenues.

The project comprises two primary components. The first entails the approval of investments by corporations and public sector organisations in sports clubs in exchange for ownership transfer, according to the state-run Saudi Press Agency (SPA).

The second proposal involves privatising sports clubs starting from the final quarter of 2023.

The project seeks to raise Saudi Pro League’s commercial revenues from $120m (SAR450m) in 2022 to over SAR1.8bn annually while generating private-sector investment opportunities and increasing the market value of the Roshn Saudi League from SAR3bn to over SAR8bn by 2030.

The sports clubs’ investment and privatisation project will create opportunities and foster an attractive investment environment, promote professionalism and financial sustainability in sports clubs and enhance clubs’ competitiveness.

Sports is one of the pillars of the country’s global ambitions under the Vision 2030 plan that seeks to build new industries and create jobs. “The ultimate impact will see the provision of world-class services to sports fans, enriching the fan experience and driving community participation,” according to a statement carried by SPA.

Saudi Arabia said the privatisation and ownership transfer of clubs will accelerate the progress of sports across the kingdom further growing participation and providing cutting-edge facilities. It will also increase competition and nurture future champions.

Saudi Arabia’s ambitious sports strategy

Meanwhile, Saudi Arabia’s Public Investment Fund (PIF) said four clubs – Al Ittihad, Al Ahli, Al Nassr, and Al Hilal – have been transformed into companies, each of which is owned by the wealth fund and non-profit foundations for each club as part of the sports privatisation.

PIF said it holds 75 per cent shareholding in each club company while the clubs’ respective non-profit foundations hold 25 per cent ownership.

The fund, which expects the ownership transfer to unleash various commercial opportunities, said it is working closely with Saudi Arabia’s Ministry of Sport to secure all the necessary regulatory approvals to complete the clubs’ ownership transfers.

The launch of the sports clubs’ privatisation plan comes as French soccer player Karim Benzema is expected to join Cristiano Ronaldo in Saudi Arabia after reportedly agreeing to a more than $107.1m (EUR100m) contract with Saudi Al Ittihad club.

Ronaldo joined Saudi Arabian club Al Nassr on a $75m-per-year contract last year. Similarly, Lionel Messi, who has been a tourism ambassador for Saudi Arabia since 2022, is reportedly preparing to sign a deal with Al Hilal while Sergio Ramos is linked with a move to Al Nassr.

The sports ministry said second division football club al-Suqoor will be turned into a company and owned by NEOM, energy giant Saudi Aramco will own Saudi First Division club Al-Qadsiah, Third Division side Alula FC will be owned by the Royal Commission for Al-Ula while First Division club al-Diraiyah FC will be controlled by Diriyah Gate Development Authority.

Read: Saudi wealth fund PIF to acquire 30% stake in Tamimi Markets

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