After LIV forced a PGA partnership, could Saudi Public Investment Fund target NFL ownership?

When the PGA Tour’s partnership with LIV Golf was announced on June 6, it didn’t take long for the news to spread through NFL hallways. A multitude of franchises filled with golf-obsessed coaches, players and staffers were in some phase of their offseason program when word broke. With many in the NFL having ties to elements of the PGA through friends or players on the tour, it sent some individuals to their phones or televisions in disbelief.

“It was immediately out on the practice field,” one AFC C-suite executive told Yahoo Sports. “I heard it in the hallway and by the time I was outside, guys were already talking about it. I can’t remember the last time that happened. … I don’t know how we would have handled it if [Saudi Arabia] wanted a piece of the NFL, but I’d think that will at least be a back-burner conversation for [franchise] owners. Or maybe front-burner because of the timing, with the [Washington] Commanders sale finalizing and the [Seattle] Seahawks coming up.”

For a league that prohibits foreign ownership of its franchises, the odds of Saudi Arabia’s Public Investment Fund (PIF), or any sovereign wealth fund, acquiring an NFL stake remain extremely slim. But a handful of high-ranking team executives who spoke with Yahoo Sports following the LIV/PGA partnership shared a similar opinion about the NFL’s future and how it could be impacted by foreign wealth.

Something along the lines of: Never say never… but probably never.

As one NFL team president put it, “The fact that the PGA couldn’t sweat out LIV for a year is pretty bad.”

Another high-ranking executive was far more blunt: “The PGA was weak. They were talking tough, but how they folded in such a short time span says everything. The only way any part of the NFL will ever be owned in [a sovereign wealth] situation is if the league changes its mind and invites that money in. And maybe that happens. But the NFL isn’t going to be bullied into it. The closest thing we have to a distressed asset right now is going to sell for more than $6 billion, and that’s after a total s*** show of lawsuits and investigations. We’re not exactly operating from a position of weakness in any scenario.”

As fair as that argument might be, even the NFL can’t see around corners. And we’ll get to how all of this stacks up in relevancy for the league. But first, as the 2023 U.S. Open tees off Thursday with players from both sides of the PGA/LIV split merged again in one competition, you have to understand what Saudi Arabia’s sovereign wealth brings to the table and what supporters and detractors say is driving it. Not to mention what it is realistically capable of, whether the NFL is ready to invite it in or not.

'Sportswashing' has made it in America

Start with the PGA. Roughly one year ago, nobody would have believed the PGA could have been wrestled so quickly into a partnership with a foreign-owned golf tour. Especially after showing its public relations teeth in the fight against LIV, which included a highlighting of Saudi Arabia’s poor human rights record and pointing toward the Saudi nationality of many of the hijackers who carried out the 9/11 terrorist attacks in 2001. If anything, it looked like the PGA was prepared to throw down against LIV, both in a courtroom and in the court of public opinion.

One year later, the PGA decided the best course was to become business partners with LIV. And just like that, it became the latest in multiple globally recognized assets in the fast-growing sports and entertainment holdings of the Saudi regime. It's a portfolio that includes, but is hardly limited to, primary ownership of Premier League club Newcastle United, a massive stake in California-based ticket juggernaut Live Nation Entertainment, as well as deepening ties to Formula 1, the WWE, and development of The Saudi Cup, an international horse race boasting a world record $20 million purse. That's an impressive haul that wouldn’t be complete without mentioning the signing of iconic worldwide soccer star Cristiano Ronaldo to play for the Al Nassr Football Club in Riyadh. All for a mere $200 million euro ($215 million) per year.

That’s the kind of power showcased by the Saudis' sovereign wealth fund, which was last accounted to have holdings of over $650 billion with a target goal of $1 trillion by 2025. And Saudi Arabia’s quest for global sports imprint is just beginning. It was first noticeable enough in 2020 to draw the attention of Forbes, which reported on Saudi Arabia’s sudden and aggressive “hunt for cheap sports assets.” According to Forbes, that pursuit included Crown Prince Mohammed bin Salman circling multiple European soccer teams with revenues hit hard by the pandemic.

Reflected in positive light, Prince Mohammed’s pursuit of a broadened global sports presence was seen as using the PIF to carry out his “Vision 2030” initiative, which is aimed at reducing Saudi Arabia’s dependence on an oil-based economy while pivoting into other industries and investments. Along the way, those diversified assets and relationships would, in theory, help raise the outside profile of Saudi Arabia to the rest of the world, while also enhancing the quality of life and pride of its people.

There’s a critical flip side to that vantage. Critics suggest his embrace of global platforms and attempted sports footholds in the United States and Europe are nothing less than “sportswashing,” a term that effectively argues Prince Mohammed is attempting to utilize sports and entertainment to burnish the representation of his regime and wash away multiple perceived crimes. In addition to grave, widely publicized reports assailing Saudi Arabia's human rights record — which includes alleged migrant worker abuse and exploitation, gender inequality and severe restrictions on freedom of expression — a U.S. intelligence report concluded Prince Mohammed likely approved the 2018 killing of journalist Jamal Khashoggi.

This is where the assumption of an NFL pursuit comes in. In the pantheon of sport in the United States, some would argue there is no more powerful sportswashing machine than an NFL franchise. And that’s why many are presuming that Saudi Arabia will include the NFL among its next attempted sports purchases in America.

As one league executive put it: “If you wanted to say you’re involved in Americana, there’s no better way than the NFL.”

Yet, beyond the NFL’s stranglehold on the sports and entertainment landscape in the United States, there isn’t a clear sign the Saudis have legitimate interest in the NFL. That’s not the case with other leagues. According to a report in the The Guardian in 2019, Saudi sports minister Prince Abdulaziz bin Turki Al Saud and other Saudi lobbyists met with representatives from the NBA, MLB, NHL and MLS. The NFL was conspicuously avoided. And since then, there hasn’t been any sign of a materially important meeting between any NFL officials and Saudis seeking to advance a sports agenda.

Executives inside the league have theory why that is, too.

Why NFL, Saudis might be mismatched

“We’re a bad fit,” one said.

“It’s not Premier League soccer, where you can spend to the bottom of the barrel and all you need is a deeper barrel than everyone else. The salary cap puts limits [on] the number one resource: the player talent. What good is the money if you can’t use to outspend everyone else two or three fold in free agency?

“The benefit [for a sovereign wealth fund] would be in facilities and coaching and technology. Maybe travel, although I don’t know what’s better than a team plane at this point. Two team planes, I guess. I’m not saying that’s meaningless, but being able to spend exponentially more on players than everyone else is impossible with a [salary] cap. Even the benefit of having enough money to pay every single player a fully guaranteed deal — which would win you battles in free agency — then what happens when you have to cut someone? All of their guaranteed money is stuck on your cap.”

Added the team president: “The NFL stands as arguably the most equal league when it comes to a mutually agreed salary cap, revenue sharing, etcetera. That’s not a place that sovereign wealth funds have tended to gravitate toward. Football also has no residence in the Middle East. So what’s the value in it for them at home? I could see them going and buying [Karim] Benzema and Ronaldo — if I were them, I would far rather go buy soccer and bring it to the Middle East. Because my country plays soccer. Even basketball would make more sense, because you could [play] it. Golf, they play golf there. If you’re going to spend the kind of money you’re talking about, there better be some cultural overlap.”

It’s also worth noting that basketball has been popularized in Saudi Arabia to the point of the NBA being a very recognizable sports commodity in the country. The NBA also has a soft salary cap that allows teams to spend as far beyond the cap as they wish, with the only penalty being a luxury tax. It’s pricey, but it also fits the “no cap” soccer leagues that the Saudis have previously pursued. And lest anyone forget, the NBA opened its teams up to a 20 percent stake in foreign funds, a move that could eventually foreshadow basketball allowing a sovereign wealth fund to be the sole owner of a team.

Add all of that up, and it sounds like there are more enticing stomping grounds when it comes to the Saudis and American sports stages. None of which addresses the most obvious hurdle that remain in place: The fact that the NFL has never, to date, given serious consideration to changing its own franchise purchase rules. There has been no suggestion of an NFL appetite for involvement from foreign wealth funds. This despite the franchises skyrocketing in price and the pool of homegrown buyers with realistic liquidity not keeping pace.

Instead, the NFL is in the midst of trying to solve that problem another way, and we’re seeing it in the Commanders sale. For the first time, the league is structuring a team sale that not only allows the Commanders to be bestowed on a larger and more divided group of buyers, but it’s also allowing the group to finance more of the debt in the purchase. And if it works out well, it means there will be less of a need for ultra-wealthy investors who can simply write a check for the vast majority of their purchase.

“Naturally, more options on the table with your pool of buyers means less of a need to ever consider potentially bad options,” one executive said. “If you can do it the way it has worked for decades with a clear-cut primary owner who can afford to buy the majority of the franchise, and also add in the option of considering larger diversified groups who can finance more of the deal, then I’d say the need to change the rules is somewhere in that formula — not in creating new rules that allow in wealth funds. You could even change them to consider foreign buyers who can afford to buy the team in the traditional way while still excluding any wealth funds.”

“I’m sure there are owners who would love to have [Mexican business magnate] Carlos Slim in the league,” the team president said. “Rules [leaning into group ownership] will ultimately be what probably box out sovereign wealth funds. I think the NFL would probably rather have a great debt load on teams than sovereign wealth fund ownership.”

Here's how the Saudis could make their way into NFL ownership

So where would all of that leave Saudi Arabia if it wants into the NFL but didn’t have the traction to get a rules change to facilitate it? That’s where it would get extremely interesting.

The Saudis have the kind of investment capital to accomplish what many before them have failed to do: anchor a competing league and start hammering away at the NFL’s talent base by using massive amounts of money to steal players and gut drafts.

There’s some variance about how difficult something like this would be. One executive pegged the cost of propping up a competing league — even in a pared-down state of around eight teams — as landing in the neighborhood of $7 billion to $10 billion. That’s significantly more than it costs the NFL to operate eight teams, but the executive said the premium would be spent on blowing out salaries enough that major stars and the best draft prospects would turn their backs on the NFL.

There was some disagreement between the executives on the costs and measures it would take. One stated that it could be as simple as waiting for the USFL or XFL to fail, then swooping in and taking advantage of the infrastructure that is already in place. After that, the executive suggested overlapping the season with the NFL’s fall schedule, then aggressively sniping coaching and player talent over an expanse of several years. Another suggested a similar path that included a “buyout” of elite-level players in multiple drafts — with an emphasis on the best quarterbacks.

All agreed that it was a matter of doing what so many other leagues haven’t been able to pull off: spending enough money over a long enough timeline to hurt the NFL’s talent base and eat into some of its television audience.

One executive compared it to funding a technology startup, accepting the path of operating at loss and a significant cash burn until either disrupting your chief competition or turning a financial corner as a company. The end result being a PGA-LIV scenario where the NFL has to go down a path it never thought was possible. That approach would likely have to be fueled at merging all of the competing teams into the league, rather than simply opening a runway for sovereign wealth fund to buy a single franchise.

“It depends what your point is,” the team president said. “If you’re saying, ‘We can survive spending $7 to $10 billion a year for five years to bring the NFL to the table’ — sure, you can do that if you’re prepared to lose $50 billion. But what’s your ultimate goal? To go buy a piece of the NFL? If you’re willing to burn all of that money, you’d be far better off just walking in and saying, ‘Hey, Woody Johnson, I’ll give you $25 billion for your team.’ If you’re going to spend an absolute s*** ton, just go get a team and try to make that as valuable as possible.”

Added another executive, “A productive straw poll is what kind of support exists if a sovereign wealth fund attempts to obliterate the best offer on the table. The most recent two sales, what would the mood have been if the [Denver] Broncos or Commanders had drawn an offer — and this is just an arbitrary [number] — but what if the offer was 50 percent better than the best offer on the table? What if an offer was doubled? I’d assume another $3 to $6 billion premium would have put some fight into the Bowlen family and Dan Snyder. They would have tried to find a way to take that offer. And I’m not sure that some other owners wouldn’t have agreed. Throw a check for $9 billion out there and ask all the owners if any of them would be ready to sell for that number. You might be surprised by how many hands get raised.”

For now, it’s not something the league will grapple with. There is no crisis to force panicked change. There is no LIV-inspired competing league that is doing wildly unexpected damage. But that’s also today. There’s no telling what could change for the NFL in the coming years, or the team owners who control it. Five years from now, the league is expected to have a new commissioner. Seven years from now, it will need a new collective bargaining agreement. There’s no telling what what could happen in the span.

Seven years ago, the thought of the NFL getting into bed with the gambling industry or going anywhere near Sin City for a franchise was unthinkable. Now we have the Las Vegas Raiders and the league has at least seven official sports betting or sports book partners. When it comes to sovereign wealth investment, “Never say never … but probably never” requires a hedge in punctuation.

Probably never?

Charles RobinsonSenior NFL reporter

Charles Robinson has been a senior writer for Yahoo Sports since 2004, specializing in NFL and investigative reporting. Follow him on Twitter @CharlesRobinson.