Sporting Futures
With #Week34 behind us – and, according to the Met Office, the last sunny days of what has been a distinctively average UK summer – football fans everywhere are waiting to see if their clubs will pull any rabbits out of hats before the transfer window closes on September 1st. But has sport now become a credible alternative in the bids to drive foreign direct investment?
The headlines in the UK have focused on England captain Harry Kane’s move from Tottenham Hotspur to Bayern Munich, but arguably the more important business has come from Saudi Arabia. Both in the Premier League – through Newcastle United, partly owned by the Saudi Public Investment Fund (PIF) – and its domestic Saudi League, the Kingdom has been cutting a dash in the transfer market. Genuine footballing stars such as Cristiano Ronaldo, Karim Benzema, N’Golo Kante, Sadio Mane and Neymar have made the move to Saudi Arabia, no doubt attracted by some major paydays but also perhaps spotting the way the wind is blowing with new investment into clubs, leagues and other sporting infrastructure.
With a collective spend in excess of US$400 million on transfer fees alone, more millions on salaries – and promises that this year’s business is “no one off” – the scale of the Kingdom’s ambitions is easy to see. Put it alongside its moves into boxing and golf, and it is clear that the billions being spent represent something much more strategic.
There is a misconception that this is about “sportswashing”, but in truth there are different motivations at play. The huge investments in sport are in fact part of the Kingdom’s wider diversification strategy, a move into an industry of the future as it faces up to a world where its previous source of wealth – principally oil – is less certain.
Almost all of Saudi Arabia’s vast investment can be seen through this lens. It knows it needs to convert its petrodollars into sustainable future wealth, and it has identified a number of key pillars to do so. Sport is one. Real estate is another. Take a look at the megaprojects it is undertaking, incorporating everything from The Line, within the new NEOM area in the north of the Kingdom, to schemes such as Diriyah in Riyadh, and you get a feel for what the true impact of the Kingdom’s Vision 2030will be.
As the sports industry investments show, this diversification is not limited to physical infrastructure. If the country is to achieve its goal of becoming a global economic force, it also has to be somewhere that people come to live, work, socialise and exchange ideas. This thinking underpins recent, ongoing cultural shifts, and moves into events and forums that both drive innovation and showcase the opportunities in the Kingdom and wider region. Cityscape Global – the world’s most ambitious real estate event, being held in Riyadh for the first time from 10th September, which Innesco has been advising on PR, marketing and social media activity – is a prime example of the calibre of events being hosted.
Sport is a unifying, powerful force, and Saudi Arabia has identified it as an area that can be a catalyst for FDI and national growth, something that helps take the country into a new era. To many, the headline investment figures are mind-boggling, but taken in the context of Saudi Arabia’s diversification they suddenly start to make sense. This strategy is shaping what the future looks like, and its overall success will be measured many years from now.
Take a look at what has already been achieved, and it becomes very hard to bet against their goals being met.