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Saudi wealth fund commits $2.3 billion to football sponsorships

Saudi Arabia’s sovereign wealth fund has committed more than $2 billion to new long-term soccer sponsorship deals this year, a sign of the kingdom’s growing ambitions in the world’s most popular sport.

The Public Investment Fund said in its latest financial statements that it has entered into sponsorship deals “with several football clubs amounting to SAR 8.75 billion. [$2.3bn]in the first eight months of 2022. Most of the money goes to domestic football.

The agreements highlight how the PIF, which manages assets of over $600 billion, is being used by Crown Prince Mohammed bin Salman to diversify the country’s economy. Unlike most other wealth funds, the PIF has a dual mandate to help build the nation and seek financial returns.

Most of the increased spending comes from a series of 20-year business partnerships between holding companies Qiddiya and Jeddah Central and a handful of domestic football clubs; and a five-year deal to sponsor the Saudi football league by property developer Roshn, which PIF owns.

The football spending spree was revealed in accounts PIF shared with investors as part of a $2 billion bond it raised earlier this week.

The accounts also show that the sovereign wealth fund received a qualified opinion from KPMG for its 2021 financial statements, meaning the audit firm was unable to familiarize itself with certain aspects of the accounting. In an audit letter dated August 2022, KPMG reported that it was “unable to obtain sufficient appropriate audit evidence” regarding transactions with PIF board directors and their family members. . The PIF declined to comment.

Crown Prince Mohammed bin Salman, center, ahead of the inaugural Saudi Arabian Grand Prix in Jeddah in December © Andrej Isakovic/AFP/Getty Images

The steep rise in football spending comes a year after the PIF bought Premier League club Newcastle United for just over £300million. Since the takeover, the new owners have spent over £200million on players and hired a new head coach and general manager.

Noon, a Gulf-based online retailer backed by PIF, became one of the team’s shirt sponsors in June this year. The company also has a business partnership with Manchester City, which is owned by a member of the Abu Dhabi royal family.

As Saudi Arabia pushes further into football, neighboring Qatar is gearing up to host the World Cup next month. Qatar already have an established presence in European club football – they bought Paris-Saint Germain in 2011. The team’s chief executive, Nasser el-Khelaifi, is now president of the European Club Association, a group pressure from elite teams.

Saudi ambitions in football are set to grow further. In August, Crown Prince Mohammed bin Salman attended a boxing match in Jeddah with Gianni Infantino, secretary general of FIFA, world football’s governing body. Since then, speculation has grown that Saudi Arabia will submit a bid for the 2030 World Cup, with Egypt and Greece touted as potential partners in a bid across three continents.

A Saudi-led bid would face competition from a joint bid from Spain, Portugal and Ukraine, and a likely pan-South American bid to mark the centenary of the inaugural FIFA World Cup. world in Uruguay.

Saudi Arabia has also made its mark in other sports. He has set aside at least $2 billion for PGA Tour rival LIV Golf, and Jeddah hosted Formula 1’s first Saudi Grand Prix last year, part of a 15-year commitment.

Human Rights Watch, a campaign group, has accused the Saudi government of using football, motor racing and golf for “sportswashing”, which it defines as “an effort to distract from its grave violations of human rights by supporting events that celebrate human achievement”. .

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