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The Guardian - US
The Guardian - US
Sport
Karim Zidan

Saudi Arabia has bought into soccer and golf. Will the NBA and NFL be next?

The NFL is a hugely popular product but does not have the global reach of the NBA
The NFL is a hugely popular product but does not have the global reach of the NBA. Photograph: Ted S Warren/AP

Earlier this week, golf’s civil war came to an abrupt end when the PGA Tour announced plans to merge commercial operations with its Saudi-funded arch-rival, LIV Golf.

The shock announcement marked the culmination of a year of disruption, player poaching and heated litigation. It also brought attention to Saudi Arabia’s growing ambitions in sports and raised the possibility that the kingdom will use its seemingly limitless resources to buy into US sporting behemoths such as the NFL and NBA.

While US professional sports are highly lucrative – the NFL alone generated $18bn in revenue last year and its most valuable team, the Dallas Cowboys are worth $8bn – the Saudis are not after short-term profits. Saudi Arabia’s agreement with the PGA Tour marks the latest in a series of high-profile investments aiming to transform a controversial kingdom marred with human rights abuses into a tantalizing hub for global sports and entertainment events. These investments are purportedly part of Crown Prince Mohammed bin Salman’s Vision 2030 initiative, which aims to reduce Saudi Arabia’s heavy dependence on oil by developing other industries.

Saudi Arabia already hosts a Formula One race, WWE shows, and the world’s richest horse race. The country’s sovereign wealth fund also financed the purchase of the Premier League’s Newcastle United, and is in the process of tempting high-profile footballers to join Cristiano Ronaldo in the Saudi Pro League – an effort that could be worth more than $1bn in wages for 20 foreign players.

And there are signs that the kingdom is expanding its sports empire in the US. According to documentation acquired by the Guardian in 2019, Saudi Arabia enlisted the services of an international consulting firm to lobby leading commissioners and sports bodies in North America. Prince Abdulaziz bin Turki Al Saud, the kingdom’s minister of sports, and other Saudi lobbyists went on to meet with several US-based sports leagues.

Prince Abdulaziz met with representatives from MLB and the NBA, as well as the commissioners of MLS and the NHL. Princess Reema Bandar al-Saud, who now serves as the Saudi ambassador to the US, also met with Kobe Bryant in 2018 to discuss the “development of basketball in Saudi Arabia”.

While the documents do not include any follow-up information regarding the meetings, they shed light on Saudi’s ambitious sports strategy and its interest in US sports leagues.

Stars such as LeBron James and Stephen Curry are popular around the world
Stars such as LeBron James and Stephen Curry are popular around the world. Photograph: Kyle Terada/USA Today Sports

The most obvious league for Saudi investment would be the NBA. Basketball is popular in Saudi Arabia – its national league was established in 1976 and its men’s team won the Arab Championship in 2018. With the likes of Ronaldo heading to the Saudi Pro League, could an investment in the NBA see ageing stars like LeBron James or Chris Paul fatten their wallets with one final season in the kingdom’s league? More significantly, the NBA would offer a chance to widen the soft power that is behind much of Saudi sporting ambitions. The NBA is a true global league, and has tens of millions of fans in Asia, Europe, South America and Africa who cut across a wide range of nationalities, races and religions.

The framework is there too. In December 2022, the NBA’s board of governors voted to let sovereign wealth funds, pensions and endowments acquire minority stakes in its teams, widening the pool of prospective team owners. Executives from Abu Dhabi’s Mubadala Investment Co and Qatar Investment Authority have since expressed interest in NBA ownership, and Saudi Arabia is likely to follow suit.

There is one more facet of the NBA that will appeal to Saudi Arabia. The free market of the Premier League means it is fairly simple to buy success – witness how Newcastle have gone from also-rans to the Champions League since Saudi investment in the club. That is much tougher in US pro sports, where salary caps ensure a (mostly) level playing field. However, the NBA has a “soft” salary cap, meaning teams can go over the cap in return for certain penalties.

Another potential target is MLB, which also has a soft salary cap – something that billionaire owners have already been happy to exploit. The league eased its ownership rules in 2019 to allow investment funds to acquire minority stakes in multiple teams. Three years later, MLB awarded its franchises the commercial rights to sign sponsorship deals in foreign markets, a process similar to that undertaken by the NFL. This could lead to sponsorship deals and other partnerships between franchises and the kingdom.

Saudi Arabia could also follow in the footsteps of its regional rival, the United Arab Emirates, which established a Dubai-based professional baseball league focused on the Middle East and southwest Asia. This effectively expanded the UAE’s influence into areas often ignored by the West, although baseball’s global popularity is small compared to the NBA.

It is worth noting that Saudi lobbyists did not meet with representatives from the NFL, which has a sole-ownership system and a “hard” salary cap that cannot be crossed. Such limitations greatly reduce Saudi Arabia’s economic power and thus make the NFL a far less likely target for potential partnership or acquisition. For example, French star Karim Benzema is set to make roughly $215m a year to play for Saudi football club Al-Ittihad. In contrast, the salary cap for an entire NFL team in 2023 was $224.8m.

The NFL is also notoriously run like an old boys’ club for very rich old white men. How willing team owners would be to vote Saudis into a league that, as ESPN’s Bomani Jones once said, is run as a “celebration of masculinity and America” is debatable. Jacksonville Jaguars owner Shahid Khan, who is Pakistani American, is the only non-white controlling owner in the NFL. Having said that, the number of people who can afford to buy an NFL team is vanishingly small. When Jerry Jones bought the Dallas Cowboys in 1989 he paid $150m. This year Dan Snyder agreed to sell the Washington Commanders for $6bn, a sum far out of the reach of most of even the richest people in America but chump change for Saudi Arabia.

Despite Saudi Arabia’s ever-growing influence in the world of sports, there are several obstacles that could limit its American ambitions, including US regulators such as the Securities and Exchange Commission and the Department of Justice’s anti-trust enforcers.

Ron Wyden, who serves as the US senate’s finance chair, called the PGA/LIV Golf merger a “shameless cash grab” and planned to “dive into every nook and cranny of Saudi Arabia’s deal …”

“As a start: US officials need to consider whether a deal will give the Saudi regime improper control or access to US real estate,” Wyden said in a statement.

Assuming the merger is allowed to go through, it will be interesting to see if US regulators attempt to protect other major sports leagues. Relations between the US and Saudi Arabia have been strained in recent years but the Biden administration has attempted to re-engage with the kingdom amid volatile oil prices.

Though Saudi Arabia does not have a storied history in golf, it managed to gain control of one of America’s favorite pastimes within a year of launching its own rival entity. Time will tell whether other US sports will be tempted by the allure of the kingdom’s unrestricted capital.

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