Date
12 December 2017
The Saudi royal family is leading the country toward some of the most radical changes it will have encountered in recent history. Photo: Reuters
The Saudi royal family is leading the country toward some of the most radical changes it will have encountered in recent history. Photo: Reuters

Privatisation of Saudi state assets set to fuel sports boom

For what is now the best part of a decade, Qatar and its huge ambitions have been at the forefront of global sporting conversation. Whether it is the country’s forthcoming staging of football’s World Cup, its investments in horse racing or the naturalization of athletes, it seems Qatar is never far away from the epicentre of developments in several sports.

At the same time, some of Qatar’s partners in the Gulf Cooperation Council (GCC) have also embraced the sport as a means through which to pursue a multiplicity of agendas. For example, Dubai has engaged in sport through sponsorship, to promote its national airline which is now associated with some of world football’s most famous names, notably Real Madrid.

So too Abu Dhabi: not only does its national airline sponsor English Premier League club Manchester City, the club is also owned by the country’s royal family. Abu Dhabi’s investment in sport extends into motor racing too, the country playing host both to an F1 grand prix and to the Ferrari World theme park. Likewise, Bahrain: hosts of the GCC’s other annual F1 race, and also a major shareholder in the McLaren F1 team.

However, as its smaller regional neighbors have invested heavily in the sport during the last two decades, the GCC’s biggest nation has appeared almost passive. The Kingdom of Saudi Arabia (KSA) does not own a portfolio of international sports properties, nor has it attempted to exert global soft power influence through sport or boost its image by vigorously pursuing elite-level sporting success.

Yet, KSA shares the same natural resource endowments as the likes of its GCC partners Qatar and Dubai. For example, it holds the world’s second largest reserves of petroleum, and is the world’s largest exporter of petroleum products. In addition, the country possesses the world’s fifth largest reserves of natural gas, and has even achieved double-digit growth at various times over the last decade.

One reason for KSA’s relative sporting anonymity is perhaps that, unlike its neighbors, the country has not sought to build its profile through sport. Unlike, say, Qatar (which only became independent from Britain in 1971) and its use of sport as a soft power instrument, KSA has not perceived the need to boost its image or reputation by bidding for events such as the World Cup.

One reason for this could be the somewhat conservative socio-political structures that have dominated KSA for years. The country is often perceived as being entrenched and in a way other GCC nations are not. This has been bound-up in the leadership of the traditional ruling family, which has often emphasised stability over progressive change. Among other things, this has resulted in KSA adopting a “big state” philosophy whereby the government has dominated.

Yet, all this seems about to change as the country heads toward some of the most radical changes it will have encountered in recent history. Prince Mohammed bin Salman, a 31-year-old Saudi royal, has recently been anointed crown prince in the absolute monarchy, and he appears intent on changing KSA. If a signal of this is needed, the past week’s announcement that Saudi women will be able to attend football matches from next season is surely evidence of changes coming down the line.

Prince Mohammed’s accession is in keeping with an emerging KSA narrative that finally appears to be acknowledging the importance of sport. Indeed, in 2016, the government revealed its vision for the sport, acknowledging that opportunities for playing sports in the country have historically been limited, but that sport is an important part of an active, healthy lifestyle among its population.

The vision statement also explained that the country is aiming to “encourage widespread and regular participation in sports and athletic activities, working in partnership with the private sector to establish additional dedicated facilities and programs. We aspire to excel in sports and be among the leaders in selected sports regionally and globally”.

As part of this process, the following were identified as being particularly important: grassroots development of sports and sporting infrastructure; development of women’s sport; privatisation and promotion of football and other sports clubs; and the commercialisation of trademarks and logos.

The use of sport to promote better health and well-being by KSA is consistent with what other GCC nations have been doing for many years, as is the goal of promoting the commercial development of its sports properties. However, what is especially eye-catching about the country’s more active engagement with the sport is its proposed privatisation program.

This is part of a much larger programme designed to roll back state involvement in KSA, but could lead to Saudi clubs dominating Asian football in years to come. Al Hilal has already reached this year’s Asian Champions League Final, reflecting the continuing heritage and strength of KSA football teams in continental competition. However, the club’s recent agreement with Kingdom, a diversified investment holding company, reveals something about the country’s ambitions for its professional teams.

If Kingdom has signed to ensure that Al Hilal is privatised in a highly lucrative deal, then it is simply a reflection of other developments in KSA. For instance, the proposed privatisation of Saudi Aramco (the state’s oil and gas corporation) could be worth up to US$10 trillion, which would make it the world’s most valuable company.

Significantly, the Chinese government has reportedly made inquiries about acquiring 5 percent of Aramco. Given Beijing’s own football ambitions, allied to its willingness to utilise the sport as a way of securing access to natural resources, it is not inconceivable that a Chinese investor could purchase a KSA club such as Al Hilal.

There is some way to go yet before we can label Saudi Arabia as being the new Qatar or, for that matter, the new China. However, for observers of sport across the world, it is worth paying close attention to the country’s sport. Fundamental changes are taking place which could dramatically change the balance of sporting power in Asia.

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BN/RA

Abu Dhabi’s investment in sport extends into motor racing. The country plays host to the F1 Grand Prix and the Ferrari World theme park. Photo: Ferrari World Abu Dhabi


Prince Mohammed bin Salman, recently anointed crown prince of Saudi Arabia, appears intent on changing the kingdom. Photo: Bloomberg


Al Hilal has reached this year’s Asian Champions League Final, reflecting the continuing heritage and strength of Saudi football teams in continental competitions. Photo: Goal.com


Chinese President Xi Jinping (right) and Saudi King Salman bin Abdulaziz Al-Saud meet in Beijing. The Chinese government has reportedly made inquiries about acquiring 5 percent of Aramco. Photo: Reuters


Simon Chadwick is Professor of Sports Enterprise at Salford University Manchester in the UK, where he is Co-Director of the Centre for Sports Business. He is also a Senior Fellow of the University of Nottingham's China Policy Institute.

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