This article has printed in “Tejarat_e_Farda” magazine, Dated: Saturday, August 5, 2023.
https://www.tejaratefarda.com/fa/tiny/news-44905
What MBS Wants from Football?
Brand renewal
Vahid Namazi / Journalist and Football researcher
Consider this scenario for a moment: a young CEO of a family-owned company with dozens of shareholders, including countless cousins, generates hundreds of billions in net revenue from its flagship product. Overnight, he decides to reduce the company’s decades-long dependence on this lucrative product and pour the family’s money into new ventures. Having recently warned the company’s shareholders to be transparent about their assets, he has cut expenses, raised the flag of innovation, and launched an anti-corruption campaign. Few take the young upstart’s actions seriously until he invites his smug cousins to the Ritz-Carlton in Riyadh, orchestrates a crackdown, and sends a clear message to the old commercial elite: “Times have changed, the game is different, and now everyone must play on my turf.” One of his billionaire cousins, due to a lack of transparency in his income, is removed from Forbes’ list of the world’s richest. The cousin, whose private jet was always ready to fly, is banned from leaving the country. He is forced to transfer 20% of his massive personal holding company’s shares to his young cousin, and his grand project—the construction of the world’s tallest skyscraper in Riyadh—is halted. The image of the half-built structure, once destined to touch the sky, now serves as a reminder that the “company’s” priorities have shifted, and “MBS” (Mohammed Bin Salman) has bigger, bolder projects in mind, the most ambitious of which is “Neom,” a futuristic city being built in the desert near the Red Sea.
The message is crystal clear: the old, conservative Islamic kingdom, which thrived on oil revenues while cautiously investing in secure U.S. treasuries and lucrative government contracts, must “change.” This is the new path of the “Saudi Company,” being written by Mohammed bin Salman, the 37-year-old son of the king and the all-powerful crown prince, who has torn up the old family rulebook to write a new one.
These days, Mohammed bin Salman is racing full throttle in a rally to diversify Saudi Arabia’s oil-dependent economy, backed by a mountain called the PIF—the Public Investment Fund—with roughly $700 billion in assets from oil revenues, tasked with transforming the outdated family business. By sitting at the helm of this fund, he has effectively bypassed the government and the country’s managers, enveloping all of Saudi Arabia in a bubble of power and wealth. The PIF, established in 1971 as part of the Ministry of Finance to provide loans for economic development and holding a significant share of the Saudi stock market, was relatively unknown abroad until March 2015, when it was “reborn” under MBS’s direct control.
Since 2017, when MBS sidelined his older cousin to become the heir to the throne, the size of the Public Investment Fund has doubled, fueled by injections from Saudi Arabia’s central bank and the initial public offering of the state-owned oil giant Aramco. The traditional financial powerhouses of Saudi Arabia, such as the Ministry of Finance, the Ministry of Economy, and the central bank, now pale in comparison to the PIF, like ants in the shadow of a mountain.
In the past five years, the PIF has grown so significantly that it has acquired at least 4% of Uber’s shares, taken a premium stake in the electric car company Lucid Motors as an example of growing non-oil industries, injected $200 million into golf, and acquired Newcastle United Football Club in England. The fund is also part of the consortium led by Todd Boehly that purchased Chelsea FC in 2022. Within Saudi Arabia, the PIF has had a transformative impact, reshaping the economy with its brand: creating over 80 new companies, generating more than 500,000 direct or indirect jobs, and investing at least $40 billion annually in sectors like real estate and luxury tourism.
These actions, alongside controlling oil flow, politics, security, and internal affairs, imprisoning critics, and silencing independent voices, have made Mohammed bin Salman the true ruler of Saudi Arabia, now wielding greater influence on the global stage. Western leaders want exactly this: a young leader with big ideas, running a country with a stable economy and vast wealth that helps reduce global inflation and channels capital into the world economy.
MBS, who has cited tech entrepreneurs like Steve Jobs and Mark Zuckerberg as role models and repeatedly stated his intent to apply their entrepreneurial mindset to Saudi Arabia’s growing economy, has used the PIF as a key tool to eliminate the country’s sloppy, tradition-bound bureaucracy and build a new Saudi Arabia resembling a “tech startup.” When MBS, alongside Saudi banker Yasir Al-Rumayyan, unveiled the “Vision 2030” plan to overhaul the Saudi economy and end its reliance on oil, the PIF was at the forefront of these reforms. Capital market reforms, removing barriers to foreign investment, and privatizing state-owned companies were among MBS’s initial actions through the fund. According to Vision 2030, the PIF’s assets are projected to exceed $2 trillion by that year, making it the world’s largest sovereign wealth fund. The PIF’s mission is clear: activate and empower the private sector, generate global-level returns, localize new industries, and accelerate knowledge transfer to the country. Andrew Leber, a Harvard researcher focusing on political economy in the Middle East, notes: “Saudi authorities want to instill a capitalist spirit among the people, but they don’t necessarily want a strong, independent private sector.” This precisely defines the PIF’s role: it focuses on specific investments too new or large for the private sector to take on. “If we can invest directly in certain companies through the PIF, why bother negotiating with talkative cousins and their outdated family businesses?”
How does the Public Investment Fund function in football?
Saudi Arabia’s national team, with its World Cup appearances and regional and club titles in Asia, has always been a football powerhouse in the region. Their stunning performance against world champions Argentina in the Qatar World Cup and the track record of clubs like Al-Hilal in the Asian Champions League highlight the country’s immense football potential, poised for a transformation into a global force. If successful, this could reshape the football landscape in West Asia and North Africa while tilting the balance in favor of a country long defined by tradition and single-product reliance. This is a strategy to diversify the economy away from oil and leverage “soft power” to build international credibility. Cristiano Ronaldo’s transfer to Al-Nassr last winter put the Riyadh-based club in headlines from Miami to Mumbai and Melbourne. Now, with a wave of other major and minor stars joining Saudi clubs—an unprecedented move in Asian and African football—MBS’s ambitious reform plans are becoming more evident. Al-Nassr and Al-Ittihad jerseys bearing the names of Ronaldo and Benzema are now seen worldwide, and with Saudi Pro League broadcasting rights sold to 36 regions globally, the games of these beloved stars are watched around the world—something none of Saudi Arabia’s neighbors can compete with.
But how does MBS’s football project work, and where do Saudi clubs get all this money? The story is simple: a portion of the massive wealth accumulated in the Public Investment Fund, nearing $700 billion, is being spent on developing football and the Saudi Pro League. Four major clubs—traditional rivals with thrilling derbies—two from Jeddah (Al-Ittihad and Al-Ahli) and two from the capital (Al-Hilal and Al-Nassr) are being transformed into a “corporate entity.” These clubs receive the necessary funding for their galactic operations from the PIF. These four clubs, along with other Saudi Pro League teams, are part of MBS’s project to advance sports in the country, undergoing privatization to help elevate the Saudi league into the world’s top 10. It’s estimated that the PIF, holding 75% of the shares of Al-Nassr, Al-Hilal, Al-Ahli, and Al-Ittihad, allocates over $1 billion per season to finance contracts, transfers, and league development for this four-club corporate entity. The logic behind prioritizing these four clubs is clear: Al-Hilal and Al-Nassr are the biggest clubs in the capital, while Al-Ittihad and Al-Ahli are the biggest in Jeddah, the country’s second-largest city, both with passionate and numerous fan bases. The derby-like rivalry between these two cities and four popular teams will heat up the league. Other Pro League clubs will also benefit from financial backers like Aramco and Neom. Al-Qadsiah, the largest club in eastern Saudi Arabia, where most of the country’s oil reserves lie, will be backed by Aramco, contributing to MBS’s ultimate goal of fulfilling one of Vision 2030’s objectives: hosting the 2030 World Cup.
Why is the Saudi Pro League project different from similar experiences?
Many countries, even in West Asia, have had experiences similar to what’s happening in Saudi football today. From Saudi Arabia’s smaller neighbors like the UAE and Qatar, which hosted the World Cup, to China and the United States, all have brought stars to their leagues with flashy football programs, entertaining fans for a while. But why is Saudi Arabia’s Pro League project different? One key reason is that, unlike their counterparts in Europe, Asia, and America, Saudi clubs are not bound by Financial Fair Play regulations imposed by regional football associations, which limit a club’s spending power. This allows them to sign massive contracts without worrying about regional oversight. Additionally, while football clubs in many European and South American countries have grown “organically” by drawing on local communities and talent, “commercialization” has created new opportunities and imbalances in football. Today, clubs struggling to avoid relegation from the English Premier League (like Newcastle a couple of years ago) or Chelsea and Liverpool, affected by global economic downturns, can now surpass other European clubs with the influx of Saudi money, securing spots in the UEFA Champions League, which brings millions in revenue.
In West Asia, similar experiments in Qatar and the UAE targeted stars like Gabriel Batistuta, Romario, and Pep Guardiola in the early 2000s, but none of those signings—not even Xavi as a player and later coach for Qatar’s Al-Sadd—had the off-field impact of Ronaldo’s move to Al-Nassr. Similarly, bringing Diego Maradona to coach the UAE’s Al-Wasl from 2011 to 2012 failed to draw global attention to the UAE league. Both the Qatari and Emirati leagues have stagnated in terms of continental performance and regional quality, and if current trends continue, they will fade in the shadow of their larger neighbor. Saudi Arabia has a massive and deep football fan base to rely on. For instance, Al-Ittihad averaged 40,000 spectators per game last season, while the entire Qatari league drew only 260,000 spectators for the season—one-tenth of Saudi Arabia’s total. Saudi Arabia boasts a club like Al-Hilal, currently among the top 10 clubs globally on Twitter by follower count, which also boosts industries like tourism.
Further afield, in North African football powerhouses like Egypt, Morocco, and Algeria, such potential is absent. While superstars like Mohamed Salah at Liverpool and Achraf Hakimi at Paris Saint-Germain shine in Europe, an increasing number of their teammates are now linked to the Saudi league, with players like Riyad Mahrez (from Manchester City to Al-Ahli) embarking on new adventures. Egyptian internationals Ahmed Hegazy and Tarek Hamed played key roles in Al-Ettihad’s championship last season, and players from Algeria and Morocco also feature in the Saudi league. While Egyptian giants like Al-Ahly and Zamalek or Morocco’s Wydad have long, storied histories and massive fan bases, they simply cannot compete with their counterparts in East Africa.
MBS’s football venture even differs from what’s happening in China and the United States. China spent years trying to establish itself as a destination for all sports. After hosting the 2008 Olympics, they launched an unlimited-budget development program for their clubs, signing massive contracts with big-name players. At the time, Chinese President Xi Jinping personally oversaw efforts to clean up a football league plagued by gambling and corruption. The government encouraged Chinese companies to inject money into football, buy foreign talent for the Chinese league, and even invest in European clubs like Italy’s Inter and AC Milan. Stars like Carlos Tevez (who became the world’s highest-paid footballer with a $31 million annual salary), Didier Drogba, and Nicolas Anelka joined, but these players pale in comparison to Benzema and Ronaldo, whose Instagram account boasts nearly 600 million followers, with each post boosting Al-Nassr’s online following. The arrival of aging stars in China added no intrinsic value to their product, and most reached the end of their careers without contributing to football’s overall growth in China. Another challenge for the Chinese league was the government’s insistence on maintaining a quota of Chinese players per team to improve the national team’s quality, which only reduced attendance. Additionally, China’s crackdown on corruption and illicit money flowing into football led to hefty fines for financial irregularities, severely damaging the league. Since early 2017, the government limited the number of foreign players per team, imposed a 100% tax on international transfers, and drastically reduced salaries for foreign players—sometimes to one-tenth of their original amounts—forcing big stars to abandon the Chinese football train.
Comparing MBS’s football project to the U.S.’s Major League Soccer (MLS) is also insightful. The Americans, masters of entertainment and franchising, brought aging stars like George Best, Franz Beckenbauer, and Pelé to their league in the 1970s, but their fundamental issue was the lack of public interest in “soccer” compared to sports like rugby, basketball (with the NFL and NBA’s multi-billion-dollar markets), baseball, tennis, and even ice hockey. The 1970s project failed, but renewed interest in football and the arrival of stars like David Beckham, Zlatan Ibrahimović, Wayne Rooney, and others gradually grew the MLS. Lionel Messi’s move to Inter Miami has taken the league to a new level, expanding club creation and revenue generation. However, one issue with the MLS compared to the Saudi model is its rigid structure and salary cap, governed by a specific algorithm enforced by the league and the U.S. Soccer Federation. Players deal directly with the federation and cannot earn unlimited salaries, nor can clubs pay whatever they want—even for someone like Lionel Messi. This is why Messi’s contract includes incentives like sponsorships from Adidas and other brands, as well as potential ownership of part of Inter Miami after his playing career, making the deal favorable for him.
Thus, Saudi Arabia’s approach may be more effective than the above examples. In the past, all Saudi clubs were government-owned, so private ownership of football never existed. Now, with clubs under the ownership of various funds or companies (even if state or quasi-state entities), it’s at least a step toward privatization—or even “nationalization” of football, akin to a franchise owned by a specific entity, the PIF.
This is a long and challenging but inevitable journey, as the Saudi Pro League, under the PIF’s oversight and MBS’s leadership, has set a revenue target of $120 million for the upcoming season, aiming to reach $480 million annually by 2030. It may sound easy, but just a few months ago, the idea of superstars like Ronaldo and Benzema playing weekly in Jeddah and Riyadh wasn’t taken seriously. Now, that dream has become reality. Yes, football is a “meta-phenomenon” where anything is possible, and change can happen rapidly—both on and off the pitch. The young, powerful crown prince understands this well.
Why do football stars go to Saudi Arabia?
The simple answer to why footballers go to Saudi Arabia is “money.” As most players approach retirement, they seek less competitive leagues to secure their financial future with higher earnings than the market typically offers, providing a safety net for their later years. For example, Karim Benzema is reportedly earning $100 million annually in the Saudi league ($80 million more than he earned at the wealthy, star-studded Real Madrid). However, football fans, particularly European media, are not thrilled with Saudi Arabia’s new approach to football. The reason is clear: the prince is engaging in “sportswashing.” After the 2018 murder of Saudi critic and Washington Post journalist Jamal Khashoggi, who was ambushed and dismembered by a 15-man squad in the Saudi consulate in Istanbul—an act intelligence agencies confirmed was directly ordered by MBS—the world condemned the act. Yet, soon after, the English Premier League opened its doors to the PIF’s dollars, managed by MBS, allowing him to acquire Newcastle United. Now, with a new wave of stars moving from major European clubs to Saudi Arabia, the PIF’s vast wealth is bailing out clubs like Chelsea, which spent €600 million in a single season and now, amid global inflation and excessive spending, needs a savior to balance its books. It’s simple economics: in a market of supply and demand, satisfaction is key, and today’s football market reflects this principle. Footballers seem unbothered by the Saudi royal family’s human rights record or its history of silencing critics; they’re happy to take the money and look the other way.
Is this project a form of “sportswashing”?
A country that has long been the most conservative on Earth, built on a conservative identity, now has a population of 36 million, 65% of whom are under 30, according to the latest census. Naturally, this generation is less committed to traditional values and the lifestyle of their parents or grandparents from three or four decades ago. Twenty years ago in Saudi Arabia, when prayer time arrived, religious police chased boys playing football in the streets. Today, the religious police are gone, women can drive freely, attend stadiums, and choose careers like men. These are examples of MBS’s conciliatory policies. Still, the global community views Saudi Arabia’s recent transformations with suspicion and doubt. Wahhabism still holds traditional power in major provinces, traditionalism is promoted, and fundamentalism retains a special place in this conservative society. To avoid another Arab Spring—or, in football terms, a “comeback”—MBS needs a powerful tool to deeply root his reforms in the young society. Economic diversification alone isn’t enough to move away from a conservative identity; a social transformation is also necessary. And what better tool for this than something the majority of the young population is passionate about, spends money on, and loves? The young crown prince saw this enthusiasm and thought, “Instead of others profiting from our people’s love for sports, let’s keep the money within our borders and build our brand.” Thus, sports and entertainment are helping MBS accelerate his reform vehicle—from chess, snooker, and golf tournaments to multimillion-dollar horse racing, Formula 1 races, and high-profile boxing matches. All are part of the grand transformation project, and football—the world’s most exciting and popular sport, now a “meta-phenomenon”—is the best tool for this change. Hardly a day passes without global sports or non-sports media reporting on another star joining a Saudi team. This trend began with Cristiano Ronaldo’s move to Al-Nassr last winter after leaving Manchester United and peaked with Karim Benzema’s transfer from Real Madrid to Al-Ittihad. Now, not only have Ballon d’Or winners chosen Saudi clubs for their next chapter, but players like N’Golo Kanté (champion of the Premier League, Champions League, and World Cup) have joined his French teammate at Al-Ittihad, Sadio Mané has moved from Bayern to Al-Nassr, and 26-year-old Rúben Neves chose Al-Hilal after teasing Manchester United and Barcelona. Names like Riyad Mahrez, Jordan Henderson, Malcom, Alex Telles, Roberto Firmino, Edouard Mendy, and Kalidou Koulibaly are also on this list, with the potential for another major news bombshell at any moment.
However, many, citing Saudi Arabia’s notorious human rights record—executions, suppression of dissent, the murder of critics like Jamal Khashoggi (in which MBS played a direct role), the deaths of over 100,000 Yemeni civilians in the recent war, and other ongoing issues—rightly view this new sports approach, particularly in football, as “sportswashing.” Yet, this approach is so enticing that it has captivated not only the Saudi people, who are thrilled by their country’s transformation and the arrival of global stars, but also the other side of the deal, opening the bank accounts of European clubs to MBS’s dollars.
So, where does this all stem from? Is this new approach a social-sports reform? Will Saudi Arabia’s new policy of playing an active regional and global role through sports disrupt the balance of power in the region?