Show me the money: Will Saudi Arabia's football splurge pay-off?
The Saudis are bringing some of the world’s biggest stars to play in the Saudi Pro League (SPL) and have spent an insane amount of money in the process. Even for the uninitiated, it has been hard to escape such headlines over the past six months.
The firing shot was a gigantic deal (200 million Euros/year through June 2025) to bring Portuguese star Cristiano Ronaldo to Riyadh-based side Al-Nassr in January.
It seemed that his rival, Argentine World Cup winner Lionel Messi was to set up camp on a deal that would pay him 400 million/year at rivals Al-Hilal only to be gazumped by US-based side Inter Miami at the 11th hour.
Since then other stars have left Europe to join teams in the Kingdom, lured by the chance to earn exponentially more in a state where income tax is only 20%.
This raises a couple of burning questions: Why are the Saudis doing this? Is there a path to sustainability? And will the landscape of the sport be altered forever?
Why are the Saudis doing this?
Ask anyone affiliated with the SPL project their raison d’etre and a number of reasons — tied to Vision 2030 — are given: Saudi Arabia wants to diversify its economy and become less reliant on oil, it wants to give its young population (63% of the Kingdom is under the age of 30) the best football league to boost their quality of life, and it also aims to encourage a healthier lifestyle amongst a population where nearly 60 percent are said to be overweight or obese.
That said, everything about Saudi Arabia’s sports investments seems to be for a foreign, rather than a domestic, audience.
"For all the talk of trying to cater to a domestic audience, the SPL spending spree seems to be more about foreign influence than addressing domestic needs"
Consider that before the SPL started luring elite talents the Public Investment Fund (PIF) — the country’s sovereign wealth fund — first announced its arrival by spending billions to create a golf league to rival the PGA tour.
The LIV tour disrupted the sport to such a degree that the PGA Tour had no choice but to give in and agree to a merger only months after swearing it would fight the upstart league with everything it had.
That investment had little to do with catering to the needs of the Saudi public. Golf remains a game few Saudis play and even fewer understand.
During this time, the PIF managed to acquire Premier League team Newcastle United in spite of the objections of many in British society.
Pressure asserted by Boris Johnson’s government assured that the takeover did happen in spite of the condemnation of the other 19 clubs in the league and criticism from Amnesty International who called it a “blatant example of Saudi sportswashing”.
For all the talk of trying to cater to a domestic audience, the SPL spending spree seems to be more about foreign influence than addressing domestic needs.
Consider that less than a year ago, the Saudi national football team pulled off one of the greatest upsets in World Cup history beating eventual World Cup champion Argentina 2-1 in their opening World Cup game.
That achievement sparked celebrations never seen before in the Kingdom, erased painful memories of past World Cup failures, and also caused the international media to stand up and take notice of Saudi football and its passionate fans.
It seems that if the PIF really wanted to create a football ecosystem for a domestic audience more would be done to ensure that Saudi Arabia beating teams like Argentina is a regular occurrence and a once-in-a-generation type event.
Is this sustainable?
For fans of the credit theory of money, the SPL provides the perfect example of “currency representing transferable debt, and nothing else.”
European teams are in crisis right now because the COVID-19 epidemic ate into profits. It kept fans away from the stadium and deflated the value of TV rights which were in exponential growth over the last twenty years.
At the same time, clubs were on the hook for the guaranteed contracts they had signed with their players and for the payments of transfer fees agreed to when times were good.
"The fact that Saudi football has a history of spending beyond its means should be a red flag to all involved. In 2018, Crown Prince Mohammed bin Salman cleared the cumulative debts of $333 million USD"
This unfortunate sequence of events left even the world’s richest football club — FC Barcelona — in the lurch.
Wages and Transfer fees always made up the bulk of a football club's expenditure but in Europe, it has become common to see teams spending 70, 80, and sometimes 90% of their revenue on player salaries; a phenomenon that has since required some much-needed belt-tightening.
With Europe’s elite teams all in a managed financial crisis, a new market had to be created to transfer debts to and the SPL seems to have sprung up at the right time.
English Premier League side Chelsea has offloaded more than one bad contract by selling to Saudi Arabia. Inter Milan, whose Chinese benefactor was handed a summary judgment in a Hong Kong court for debts totalling $225 million, has also used the SPL to offload debt.
In the case of all three transfers, the players involved were over the age of 30 and with multiple years left on their contracts. To entice the players to agree to the transfer all will be making more money than they did in Europe.
Is this a sustainable practice? It is hard to see how Saudi Football will parlay this into improved global TV rights deals, big sponsorship deals, or into selling clubs to foreign investors for hundreds of millions of dollars.
The fact that Saudi football has a history of spending beyond its means should be a red flag to all involved. In 2018, Crown Prince Mohammed bin Salman cleared the cumulative debts of $333 million USD.
A report in November of 2022 put the total debt of SPL clubs at $400 million — before Ronaldo signed his mega deal.
The money swishing around the league is in some way tied to the state. The PIF agreed to take over four clubs in the SPL Riyadh-based Al-Nassr and Al-Hilal in addition to Jeddah-based sides Al-Ahli and Al-Ittihad. A fifth club, Khobar-based Al-Qadsiyah was acquired by state oil company Aramco.
"Saudi Arabia is plugged into social media and its population are among the most active on platforms like Instagram, Twitter, and YouTube"
The main sponsorship deals for these clubs are with Savvy Games, KAFD, the Jeddah Central Development Company, Red Sea Global, and Yelo. All are wholly owned subsidiaries of the PIF.
As such, it is near impossible to see how the SPL can become a self-financing entity in the near future.
Will the football landscape change?
The Saudis are far from the first to try and disrupt the football ecosystem by attracting stars to play and coach their teams.
A decade ago, China embarked on a similar project which proved to be futile. The level of the Chinese national team did not improve, the domestic league bought talents but generated few of its own stars, and due to a lack of Western social media platforms in the country, talented players disappeared to the Far East and were never heard from again.
Saudi Arabia is plugged into social media and its population are among the most active on platforms like Instagram, Twitter, and YouTube but it remains to be seen if the Western press will take this sporting element of this platform seriously enough to dictate resources to its coverage.
Football also has an incredible capacity to renew itself. Yes, the SPL now have the 2022 Balon d’Or winner (Karim Benzema), the 2021 UEFA Goalkeeper of the Year (Edouard Mendy) and the 2016/17 Premier League Player of the Year (N’Golo Kante) to add to the marquee signing of Cristiano Ronaldo.
Football has moved on, though. Erling Halaand, Vinicius Jr Victor Osimhen, Kylian Mbappe, and Jamal Musiala are the toast of Europe’s Big 5 leagues. All are under the age of 25. Three out of five were born in the 21st Century.
For the football landscape to fundamentally change Saudi Arabia will have to start producing talents of its own or nurturing talents from the region with an aim to sell them on for a profit.
"There is glitz and glam associated with the SPL revolution and just like Neom and Al-Murabaa’, it seems to herald a bold new futuristic world — one that features Saudi Arabia as a strong regional and global player"
An influx of foreign talent to the league should push the local players to up their game, except as the foreign player spots in the SPL have increased to eight, we have noticed a different phenomenon taking place- a lack of Saudi talent at key positions.
Consider the fact that the Saudi national team departed for the World Cup last year without a proven goalscorer and without a single goalkeeper being an established starter of his SPL team.
In other countries, this would push players to move abroad in search of more playing time. In the case of nearly all Saudi players, they are reluctant to leave the comforts of home and accept a reduced salary. If that trend continues, it could mean that Saudi Arabia loses its status as one of the big national teams in Asia.
There is glitz and glam associated with the SPL revolution and just like Neom and Al-Murabaa’, it seems to herald a bold new futuristic world — one that features Saudi Arabia as a strong regional and global player.
Though one must ask: if the future is Saudi then why are the minds and might behind the project from European shores?
Bassil Mikdadi is the creator of Football Palestine and an international football pundit. His work has been featured in the BBC, The Totally Football Show, and The Guardian
Follow him on Twitter: @6mikdadi