RIYADH: Commercial opportunities in Saudi Arabia’s sports sector are set to grow at an unprecedented rate even before the Kingdom hosts the 2034 FIFA World Cup, an industry expert has forecast.
Speaking to Arab News, Jurg Kronenberg, partner at global management consulting firm Bain & Co., praised Saudi Arabia’s developments in the industry, which he claimed were both innovative and disruptive.
Turning the Kingdom into a key player in the international sporting arena is a key ambition of Crown Prince Mohammed bin Salman, and Saudi Arabia has already hosted several major events in this regard, including high-profile boxing matches, ATP tennis tournaments, and Formula 1 racing since 2021.
The Kingdom’s progress will be cemented by the hosting of the 2034 World Cup, which is set to deliver an economic boost to Saudi Arabia.
The most recent World Cup, held in Qatar in 2022, helped deliver a 4 percent surge to the host country’s gross domestic product, up from the 1.5 percent growth observed in 2021, according to a Cushman and Wakefield report.
The analysis said: “Qatar’s hosting of the World Cup resulted in the launch of numerous tourism and leisure projects throughout the country, which are hoped to support the tourism and hotel sector in the long term.”
Kronenberg believes that even before that event, the Saudi sports sector is set to be responsible for more than 1 percent of the Kingdom’s total GDP by 2030.
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The Kingdom’s progress will be cemented by the hosting of the 2034 World Cup, which is set to deliver an economic boost to Saudi Arabia.
PIF’s establishment of SRJ Sports Investments Co. is dedicated to accelerating sports sector growth, with the company acquiring intellectual property, and organizing major global events in Saudi Arabia.
The Kingdom’s football industry has been a key and high-profile area of investment, with PIF acquiring a 75 percent stake in four major football clubs.
The Saudi Pro League, featuring players from more than 40 countries, has witnessed a 150 percent attendance increase in the past year.
In 2021, the PIF-funded LIV Golf tour was established, and on June 6 a deal was struck with the two legacy organizations – PGA Tour and the DP World Tour – to merge their commercial rights.
He said: “The KSA sports sector is expected to increase 5-7-fold until 2030, fueled by the investments and untapped commercial potential in the market.”
Kronenberg added: “It will take time and patience for some of the foundational pillars of the sports ecosystem to bear fruits, but the Kingdom was also able to leverage its strength to innovate and disrupt the sports sector and has created strong momentum.”
Saudi Arabia’s Public Investment Fund is one of the driving forces in this area as it aims to establish the Kingdom as a global leader in sports and entertainment.
PIF’s establishment of SRJ Sports Investments Co. is dedicated to accelerating sports sector growth, with the company acquiring intellectual property, commercializing competitions, and organizing major global events in Saudi Arabia, aligning with Vision 2030.
The Kingdom’s football industry has been a key and high-profile area of investment, with PIF acquiring a 75 percent stake in four major football clubs, including Al Ahli, Al Hilal, Al Ittihad, which signed Karim Benzema in June, and Al Nassr — home to global icon Cristiano Ronaldo.
The Saudi Pro League, featuring players from more than 40 countries, has witnessed a 150 percent attendance increase in the past year, and Ronaldo has previously said he sees it potentially becoming one of the world’s top five domestic competitions in the sport.
The focus has not been solely on football.
In 2021, the PIF-funded LIV Golf tour was established, and on June 6 a deal was struck with the two legacy organizations – PGA Tour and the DP World Tour – to merge their commercial rights.
The PIF-Aramco Team Series has been a milestone for women’s golf in Saudi Arabia, featuring top golfers competing for individual and team titles.
The Professional Fighters League, also backed by PIF, has secured a multi-year media rights agreement with US cable sports channel ESPN, positioning MMA as a mainstream global sports entertainment platform.
Kronenberg noted that investments into sports does not only lead to economic returns, such as through increased market revenues or the creation of more jobs, but it also delivers in the social sphere through better health outcomes, lower crime rates, and inclusion.
He emphasized that opportunities in Saudi Arabia are being supported by the Kingdom’s government, saying: “The aspiration in the sports sector is driven and strongly supported at the highest level of the country.”
The consultant added: “The KSA sports sector was able to define its approach and investments with a clean slate and leapfrog other nations.”
Kronenberg highlighted the fact that around 70 percent of the population in Saudi Arabia is less than 35 years old, and said: “This created unique opportunities to fulfill the needs of these generations in a differentiated way.”
In an interview with the BBC in December, the Kingdom’s Sports Minister Prince Abdulaziz bin Turki Al-Faisal highlighted Saudi Arabia’s commitment to sports development, citing a £5 billion ($6.33 billion) investment since 2021 as part of the Vision 2030 strategy.
According to Kronenbreg, investments of this magnitude have not only put the Kingdom on the world map of sports, but it has created the fundamentals to achieve similar economic outcomes as other nations.
“The critical path for the Kingdom is to find a way to commercialize these investments and assets in a sustainable way,” he said.
Of course, these investments are not solely focused on the financial bottom line, and Kronenberg added: “Beyond the economic competitiveness, we can expect to see an increased competitiveness of Saudi athletes and teams at Olympics and international club and team competitions.”
Among the initiatives rolled out over the past five years include the introduction of a national sports strategy, new investment initiatives, the launch of several marquee events, as well as the professionalization and privatization of clubs.
Kronenberg said: “We are still in the early days, and the talent pyramid remains a key challenge to drive the professionalization of the sports sector in the KSA.
“Many of the top coaches and club administrators are still foreigners with relatively high churn rates – historically the average tenure of a football coach was less than 6 months in KSA.”
Kronenberg added: “There are various programs under way that will address the professionals pyramid holistically – coach programs, educational degrees in sports.”
Newcastle United’s manager Eddie Howe earlier in December shared his positive experiences from his team’s visits to Saudi Arabia, highlighting the well-organized infrastructure.
Saudi Arabia’s sports industry is flourishing, and while the signings of Ronaldo and Benzema and the hosting of the 2034 FIFA World Cup have dominated the headlines in recent years, the whole sector is increasingly becoming match-fit.
