LIV Golf isn't the only sports property being reconsidered in Saudi reboot of investment strategy
The billionaires in Saudi Arabia are pulling the plug on LIV Golf. It won’t be the first mega sports project they’ve given up on recently.
Over the last several weeks, the Saudis have bailed on a Winter Olympics-style sports festival and sold one of their best soccer teams, all while shifting the strategy of their multibillion-dollar investment fund that bankrolls it all.
The Saudi Public Investment Fund, helmed by Crown Prince Mohammed bin Salman, recently delivered a new prospectus outlining its strategy for 2026-30. The strategy focuses on more internal investment while “maximizing financial returns, strengthening investment efficiency and increasing private sector participation.”
The ultimate goal is to fulfill the prince's “Vision 2030,” which seeks to enhance and overhaul Saudi Arabia’s infrastructure and make tourism a more focal point of an oil-based economy.
It follows an era in which the fund poured staggering sums of money into various sports ventures around the world. Soccer has been a centerpiece — the country is hosting the 2034 World Cup, while PIF owns a majority stake in Newcastle of the Premier League and bolsters the Saudi Pro League. The fund has also spent big on men's and women's pro tennis, Formula 1, boxing and more.
LIV Golf, though not the most expensive, is the highest profile among them; the fund has reportedly poured some $5 billion into LIV without receiving any return.
“For the past two years, we've seen the beginning of the scaling back of some of the mega projects that were announced in 2021, 2022,” Kristian Ulrichsen, a Middle East expert at Rice University’s Baker Institute for Public Policy “That's exactly when LIV Golf began, as well.”
The PIF announced Thursday it would withdraw funding for LIV Golf after 2026, ending weeks of speculation and reporting that the Saudis were about to cut the cord. Yasir Al-Rumayyan, the PIF governor who was behind the creation of LIV Golf, is no longer listed as chairman of LIV Golf amid reports he has resigned from that role.
Staff and players have been aware for the last two weeks the PIF was only going to support LIV Golf through the end of this year. LIV responded with a new board and a plan to diversify into an investment model with hopes of finding long-term partners.
The PIF's deep pockets were integral for LIV in prying some of the sport's best players from the PGA Tour. It spent $1 billion to land the likes of Bryson DeChambeau, Brooks Koepka, Phil Mickelson, Cameron Smith and eventually Jon Rahm, the last big signing at the end of 2023.
In an interview earlier this week with The Wall Street Journal, PGA Tour CEO Brian Rolapp said: “We’re interested in having the best players who can help our tour. Not every player can do that.”
Already, five-time major winner Koepka has moved back to the tour from LIV, and Masters champion Patrick Reed plans to return later this year.
About three months ago, Saudi Arabia scaled back plans for a futuristic super-city project called The Line inside a bigger project called “Neom” that was supposed to span more than 100 miles and run from the Red Sea across the desert mountains.
One feature of the project was a resort called Trojena, which was envisioned as a year-round ski resort that would host the 2029 Asian Winter Games (which themselves were moved instead to Kazakhstan). It could have served as a dress rehearsal for future Olympics or, at the very least, the 2034 World Cup that has already been awarded to the kingdom.
More recently, PIF sold 70% of its Saudi Pro League soccer club Al-Hilal to a company owned by Saudi royalty, a move that sent shock waves through that sport — namely raising questions as to whether the fund was still committed to Newcastle of the English Premier League, of which it owns about 85%.
"Whether due to the war or reasons related to economic feasibility, we continuously reassess our priorities,” Al-Rumayyan told the state-owned Al Arabiya news channel shortly after the Al-Hilal sale.
Mohammed Soliman, a senior fellow at the Washington-based Middle East Institute, told The Associated Press “Saudi Arabia is constantly reassessing its priorities, and its investment strategy will shift accordingly."
“The PIF has always been a vehicle of national transformation first, global sports deals were part of that story, but so is pulling capital closer to home when the moment calls for it,” Soliman said.
There's a healthy debate over what impact the U.S. war in Iran is having on the Saudi decision-making.
Some of these decisions — such as the scaling back of the Neom project — were being made earlier in the year when a barrel of oil was selling for $60 — a lower price that can cause the country to endure budget deficits that might have to be financed by cutting into profits of Aramco, the country's national oil producer.
The war, meanwhile, raised oil prices to above $100 but reduced the Saudis' ability to sell it while Iran and the U.S. battle over control of the Strait of Hormuz, the key chokepoint through which up to 25% of the world's oil must pass.
“Ironically, the fact that the Saudis are still able to export maybe two-thirds of their oil at much higher prices over the last six weeks maybe actually means that their revenues may have gone up,” Ulrichsen said. “But this won’t be forever. The war has definitely heightened the element of uncertainty, and the closer it gets to 2030, the more they’ll want to deliver one or two key things, rather than maybe falling short on six or seven in general.”
The Saudis have made major inroads into sports other than golf and soccer.
They host a $15 million season-ending tournament on the Women's Tennis Association, and the PIF has naming rights for both the WTA and the men's ATP tour.
Saudi Arabia has hosted the Dakar Rally and an F1 event came to the country in 2021. (It was cancelled this year because of the war.)
It has shown interest in hosting the Summer Olympics, maybe as soon as 2036.
All that pales in comparison to its biggest sports undertaking — hosting the World Cup in 2034. That project calls for building 10 or 11 new stadiums across the country, including one in Neom that is planned to hover a quarter-mile above ground.
All those stadiums and all that investment make LIV's $5 billion look small. Still, it hasn't gone unnoticed that the vision LIV began with — as a league that would create teams, then sell them to make the endeavor profitable — hasn't materialized.
“The expense is not on the scale of what they spent on The Line or the (Asian) winter games,” Ulrichsen said. “But it’s significant, and I don't think there's an appetite for the prospect of losses continuing for at least another five or 10 years.”
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AP Golf Writer Doug Ferguson contributed.
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