Why is Saudi Arabia buying sporting clubs in Europe?

• The Middle East is asserting its influence in the global sports industry
• The oil-rich Gulf nation is positioning itself as sporting powerhouse with lucrative bids
• One of the reasons it is doing this is trying to diversify their income from oil exports

In the last couple of years, the Middle East is asserting its influence in the global sports industry. Thus, the constant question on why is Saudi Arabia buying sporting clubs in Europe?

The oil-rich Gulf nation is positioning itself as sporting powerhouse with lucrative bids to major football clubs in the UK and Formula One.  Just recently, Saudi made a $20 billion offer to Formula One owners. Unfortunately, FIA president, UAE-born Mohammed Ben Sulayem shot it down saying that the $20 billion F1 value is a little inflated. It is suspect why such a rich country would look the other way despite making billions of dollars from oil exports every year.

HOW DID SAUDI FIRM ACQUIRE NEWCASTLE UNITED?

In 2019, a Saudi Arabia-led consortium – including the country’s Public Investment Fund, the Reuben Brothers and Amanda Staveley – offered to buy Newcastle United Football Club. The deal was valued at around £300 million.

The process of buying the team was not without controversy. The Premier League took months to approve the deal, due to concerns about the human rights record of Saudi Arabia, as well as issues related to the piracy of broadcast rights.

Newcastle United. Photo/Middle East Monitor

On June 2020, the Premier League approved the takeover of Newcastle United by the Saudi-led consortium. The consortium agreed to pay £17 million to acquire 80% of the shares, with Mike Ashley remaining as a minority shareholder with 10%.

The decision was met with mixed reactions, with some people welcoming the investment and others criticizing the involvement of the Saudi government, given the country’s human rights record. Since the Saudi ownership at Newcastle, some notable changes came about. One of the most significant changes is that the team got a new head coach, Edward John Frank Howe. He replaced Steve Bruce, following his appointment in 2019.

While it’s still too early to tell how the Saudi ownership of Newcastle United is panning out, it is interesting to see how the team is growing.

WHY IS SAUDI ARABIA BUYING SPORTING CLUBS IN EUROPE?

A hypothesis by geopolitical pundits is that Saudi Arabia may be buying sporting clubs in Europe to increase the country’s global influence and visibility. Additionally, they view investing in sports teams as a way to diversify the country’s economy, which is heavily dependent on oil.

Furthermore, owning a European football club brings prestige and popularity to Saudi Arabia, as football is a widely followed sport globally. Positive popularity for this Arab nation is such a big deal given its dark history regarding human rights. The country’s history is tainted, especially due to violating the human rights of African immigrants who form the bulk of Saudi’s exported labour.

Finally, it’s also possible that Saudi Arabia’s interest in buying European sports clubs is driven by the desire to promote a positive image of the country abroad, especially in light of its many political and social controversies.

IS EUROPE WELCOMING SAUDI ARABIAN INVESTORS BUYING SPORTING CLUBS?

Saudi Arabia. Photo/The Athletic

The reception of Saudi Arabian investors buying European sporting clubs varies among different countries and clubs. In some cases, the investment is welcomed as a way to bring much-needed financial resources to the club and improve its competitiveness on the field. Their investment also brings positive economic impact to the community where the club is located.

However, in other cases, the investment is met with scepticism or even opposition, particularly when it comes to the human rights record of Saudi Arabia. Critics argue that it is not appropriate for a country with a poor human rights record to be involved in the ownership of a sports team, especially one beloved by so many fans. Additionally, some have raised concerns about the source of the money used to buy these clubs and the impact of the deal on local communities.

The takeover of Newcastle United by a Saudi-led consortium is a prime example of this mixed reception. While the investment was generally seen as a positive development for the club, the human rights record of Saudi Arabia was a major source of concern among some fans and other stakeholders.

In a nutshell, the reception of Saudi Arabian investors buying European sporting clubs depends on the specific circumstances of each deal and the country and community where the club is located.