Saudi Arabia’s $650B PIF and Its Sports Connections, Explained
It has been two weeks since the PGA Tour announced its plans to create a new joint venture with the DP World Tour and Saudi Arabia’s Public Investment Fund (PIF). The deal has drawn attention to the PIF, an entity that tends to prefer discretion and backroom dealing to the public spotlight.
Today, the PIF is worth ~$650 billion, making it the seventh-largest sovereign fund in the world, behind Norway’s $1.37 trillion Government Pension Fund and China’s $1.35 trillion China Investment Corporation. In 2022, PIF’s governor, Yasir Al-Rumayyan, said he aims to grow the fund’s assets to $1 trillion by 2025.
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The sovereign wealth fund was established in 1971 by royal decree to reduce Saudi Arabia's economic dependence on oil by diversifying its investments and generating profits across different sectors. The fund has been more aggressive in its investments since the crown prince of Saudi Arabia, Mohammed bin Salman Al Saud, took power in 2017. Shortly afterwards, he launched his Vision 2030 plan, which provides the strategic framework to further diversify the kingdom's economy and develop its public service sectors.
The kingdom implemented social reforms, such as greater educational and social freedom for women, as part of Vision 2030, but Saudi Arabia's human rights record has not improved under MBS' rule. U.S. officials concluded that bin Salman approved the brutal 2018 murder of journalist Jamal Khashoggi in Istanbul. The lawsuit against him for the killing of Khashoggi was dismissed by a U.S. federal court last December.
Additionally, a 2023 Human Rights Watch report said hundreds of dissidents were arrested by the authorities for speaking out against the government. And despite recent promises to reduce use of the death penalty, Saudi authorities executed 81 men on March 12, the largest mass execution in decades, according to HRW.
Vision 2030 and Sports
A central pillar of Vision 2030 is sports. The kingdom has invested millions of dollars in landmark sports properties as part of MBS' strategy, which has often been criticized as "sportswashing." Here are some of those investments.
In 2018, the PIF signed a 10-year deal worth $1 billion with WWE to host two events a year.
The PIF started to host high-profile boxing events during Riyadh Season, the six-month-long festival launched in 2019.
The state-owned oil company Aramco is one of F1's main sponsors, signing a 10-year contract in March 2020 worth $450 million.
In 2021, the PIF acquired an 80% stake in the English Premier League's Newcastle United.
The kingdom signed a 10-year deal with Formula 1 worth $650 million also in 2021.
Last January, the Riyadh Season festival introduced the Riyadh Season Cup, a friendly soccer match between Qatari-owned Paris Saint-Germain and Riyadh XI, an all-star team with players from Al Nassr and Al Hilal. Messi's PSG beat Ronaldo-led Riyadh XI, 5-4 in this year's match.
This year's Italian soccer Supercoppa between Inter Milan and AC Milan was another big-ticket event held in Saudi Arabia as part of the Riyadh Season lineup.
On June 5, Saudi Arabia's sports ministry announced the fund would take a 75% controlling stake in four teams in the Saudi Pro League: Al Ahli; Al Ittihad; Al Nassr, where Cristiano Ronaldo plays for $75 million a year; and Al Hilal, which reportedly offered Lionel Messi a $410 million-a-year contract.
What About Other Sovereign Funds?
PIF is not the only sovereign fund that invests in sports. On Thursday, Sportico reported that Qatar Investment Authority is buying a passive minority stake in Washington Wizards and Capitals parent Monumental Sports & Entertainment, marking the first time a sovereign fund has invested in major U.S. team sports. Last year, the NBA became the first U.S. league to allow institutional investors along with sovereign wealth funds to buy shares in its teams.
Norway’s sovereign fund reduced its sports teams' investments in 2020 but still holds equity in Madison Square Garden Sports, Liberty Media and DraftKings. Qatar Sports Investment, which owns PSG, a minority stake in Portuguese soccer club Braga and Premier Paddle (A1), is a subsidiary of the Qatar Investment Authority (QIA), the country's sovereign wealth fund, which has assets worth an estimated $450 billion.
What's next?
Today, PIF invests across six continents and 13 strategic sectors, including aerospace and defense, automotive, financial services, mining, transport and logistics, food and agriculture, construction, healthcare and real estate, in addition to sports. The PIF is also backing Saudi Arabia's futuristic city, called Neom, and Riyadh Air, a new airline the kingdom is launching in 2025.
Saudi Arabia has won the right to host the 2027 Asian Cup (soccer) and is bidding for the 2026 AFC Women’s Asian Cup (soccer). The kingdom is also expected to make an official bid to host the 2030 and 2034 FIFA Men’s World Cups. PIF did not respond to Sportico's request to comment.
"For Saudi Arabia, and its public investment fund, anything is possible,” said Simon Chadwick, professor of sport and geopolitical economy at Skema Business School in Paris. He cited the prominence that LIV Golf attained in just two years. "As long as the deal is right for Saudi Arabia, keeping in mind that money is no object," he said, "we should be anticipating all manner of acquisitions.”
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