Saudi Arabia Pulls Back on LIV Golf, But Sport Strategy Stays on Track
Saudi Arabia is scaling back LIV Golf and other sports investments after 5 years and $5B+ spent, but officials say the kingdom isn’t exiting sport.
Analysts say the kingdom is moving from visibility-driven deals to a more sustainable sports strategy...
After five seasons and over $5 billion spent, LIV Golf’s pullback makes the project look like a poor investment on paper, but the Saudi-backed tour wasn’t a total loss for the kingdom.
Funded by oil money, LIV lured big names away from the established tours and disrupted golf’s status quo. Experts say that disruption put the conservative kingdom in the global spotlight, which was one of its main goals.
Analysts say the withdrawal, announced Thursday after weeks of rumors, doesn’t mean Saudi Arabia is pulling back from sports, even with the recent Middle East conflict and Iranian strikes near the Gulf.
“Saudi Arabia is not going cold on sport,” said Simon Chadwick, professor of Afro-Eurasian sport at the Emlyon Business School in Shanghai, speaking to AFP. “It is evaluating the work that has thus far been done, what remains to be delivered, and what has worked (or hasn't worked). The trajectory remains the same.”
The $900 billion (£662m) Public Investment Fund has invested heavily in sport to raise Saudi Arabia’s profile, bringing in stars like Cristiano Ronaldo and later securing the hosting rights for the 2034 World Cup.
As the world’s largest crude exporter, the desert monarchy is using oil wealth through the PIF to diversify its economy. The plan is to grow tourism, business and domestic spending to cushion against an expected drop in fossil fuel demand.
“Perhaps Saudi plans were rather too grandiose to begin with, but equally the grifters and opportunists of global sport have been seeking to take advantage of the country's sports spending,” Chadwick said.
Blank cheque PIF-funded LIV ("54" in Roman numerals), promised to reshape golf when it debuted in 2022 with 54 holes, shotgun starts, dance music on the course and stars such as Dustin Johnson and Phil Mickelson on reported nine-figure deals.
A dispute with the US PGA Tour was headed for the courts until the two rivals announced surprise merger talks which dragged on for years without resolution. In the meantime, LIV failed to land a major broadcast deal or build a significant fanbase.
Saudi sport investments - sometimes criticised as “sportswashing,” or an attempt to divert attention from human rights - have grown since LIV was announced in October 2021.
PIF acquired English football club Newcastle United around the same time, the F1 Saudi Grand Prix began two months later and Ronaldo arrived to huge fanfare in January 2023.
“That phase was primarily about visibility and positioning Saudi Arabia as a major global player,” Amro Elserty, a France-based Middle East affairs sports analyst, told AFP.
“What has changed is not that this objective disappeared, but that the marginal value of continuing to spend at the same level on a single project like LIV has declined.”
The next phase involves cutbacks that extend past LIV Golf. The Saudi Pro League, which once spent freely on veteran players, has scaled back big signings, and the PIF sold a majority stake in Al Hilal last month.
“PIF stated from the beginning that financial support for the Saudi league would not be sustainable,” said Amir Abdelhalim, an Egyptian football analyst.
Sports Pullback
The WTA Finals will finish its 3-year run in Saudi Arabia this year, and the Saudi Arabia Snooker Masters was canceled last month. That event, one of snooker’s richest, ended after 2 years despite a planned 10-year deal.
Broader Spending Cuts
The slowdown in sports matches other cutbacks to projects like tourism resorts and NEOM, the $500 billion (£368b) futuristic city. Saudi Arabia is scaling back some of its most ambitious ventures.
Reputation vs Reality
Elserty said walking away from LIV, which was pushed by PIF governor and golf fan Yasir Al-Rumayyan, does have “reputational impact... but it is unlikely to be seen internally as a significant setback.”
“Within the logic of PIF's strategy, this is better understood as a controlled exit from an experimental phase rather than a failure in the conventional sense.”
According to Chadwick, “observers and critics are the people who have turned the supposed sports divestment into a melodrama.”
No comments:
Leave comment here