Saudi sovereign wealth fund netting world-class football talent
Flush from its prior success in golf, Saudi Arabia’s Public Investment Fund (PIF) is now redirecting its focus to the world’s most beloved sport: football.
Having made waves in the Premier League by acquiring Newcastle United two years ago, the Saudi sovereign wealth fund is intensifying its efforts to shine a spotlight on the domestic scene, bolstering the Saudi Pro League with an influx of world-class football talent.
The signing of Cristiano Ronaldo by Al Nassr on January 1, 2023, with a staggering two-and-a-half-year contract worth approximately $550 million, marked the heralding of a new era.
Ronaldo’s move to the Riyadh-based outfit effectively brought down the curtain on one of the greatest careers in the history of elite European club football.
Fast forward to June 2023, and the PIF made waves once again by transforming four prominent Saudi clubs – Al Ittihad, Al Ahli, Al Nassr, and Al Hilal – into majority-owned corporate entities, catalysing a seismic shift in the world of football.
Shifting camp
Global stars in the twilight of their careers such as Karim Benzema, N’Golo Kanté, and Sadio Mané have since joined the ranks of the Saudi Pro League.
However, what truly sets this initiative apart from prior attempts to import foreign stars to elevate a lesser-known league is the fact that the PIF’s financial prowess has managed to allure prime players away from Europe’s premier leagues, according to Felix Richter, a data journalist with Statista.
The colossal wages doled out by PIF-backed Saudi clubs have cast a shadow over even the hefty salaries of the Premier League.
The process of enticing players to abandon their European club affiliations has often required substantial effort – and, naturally, even more, substantial checks – yet persuading the selling clubs to part ways has surprisingly proven easier in many cases.
Jettisoning act
Reputed clubs such as Chelsea, Liverpool, and Bayern Munich have readily offloaded aging or out-of-favor players to Saudi Arabia, reaping above-market rates in the process.
This trend has led to widespread anticipation that Europe’s football landscape may inevitably grapple with the considerable financial muscle streaming out of Saudi Arabia.
Illustrated by the accompanying chart, the financial outlay on transfers by Saudi clubs this summer aligns with, or even surpasses, the expenditures made by top European leagues, except for the Premier League.
According to Transfermarkt.com, the collective summer expenditure by Saudi Pro League clubs stands at an astonishing $489 million, on par with France’s Ligue 1 and Germany’s Bundesliga, and even ahead of Spain’s La Liga.
The twin heavies
Delving into net transfer spending – the difference between spending and income – only the Premier League overshadows the Saudi investment.
While Serie A, Bundesliga, and La Liga operate with substantial transfer surpluses, the Saudi Pro league has witnessed a unidirectional flow of funds during this transfer window, resulting in net spending nearly mirroring total spending.
As the summer transfer period unfolds, the footballing world watches in awe as Saudi Arabia’s PIF reshapes the football landscape, leaving an indelible mark on both domestic and international fronts.
Last Updated on 9 months by Arnold Pinto
