It all started with Ronaldo’s arrival in Saudi Arabia, after mutually terminating his contract with Manchester United and being offered $200 million a year to play for Al-Nassr, the nine-time domestic champions based in the Gulf nation’s capital and biggest city, Riyadh.
At the time, it was considered a career-ending move, with Ronaldo slowly fading into obscurity. But that’s not been the case. Post his move, we have since the influx of multiple high-profile players into the Saudi Pro League. The league now boasts of star players such as the current Ballon d’Or winner Benzema, Ngolo Kante, Hakim Ziyech, and Ruben Neves, who decided to move to the oil-rich nation in his prime. Many more are in the pipeline testifying the kingdom’s commitment to revolutionizing the sport.
This has made a previously unknown league, whose current FIFA standing would place them below 4th tier of English football, one of the most talked about leagues in the world.
Economic diversification at the forefront
It’s not only football that the country is investing in. They have a significant stake in other sports like F1 and Golf as well. They are building new capabilities in manufacturing, chemicals, and entertainment and are also sighting ambitious human settlements like The Line. But why are Saudi Arabia and other Gulf nations so hell-bent on making investments in new areas at this juncture? The surface-level answer is simple. Depleting oil reserves and the move towards greener sources of energy. The devil however lies in the details. For starters, it makes complete business sense to weed off the state’s revenue from an increasingly unpopular mode of energy generation, oil. Dubai is a prime example of this. With comparatively smaller reserves, they were one the first ones to successfully transition themselves into a tourism destination with less than 1% of GDP amounting to oil exports today. Saudi Arabia, with at least 50% of the GDP relying on oil, might be trying to do the same. But there are concerns that the kingdom is sportswashing, a term used to describe the practice of individuals, groups, corporations, or governments using sports to improve reputations tarnished by wrongdoing. The country has faced several allegations of human rights violations in the past and this may be their attempt at increasing their soft power and dominance on the world stage. Global sports structure Whatever you call these recent investments, the bigger question is whether investments in football will bear fruit or not. It’s a difficult question to answer at the outset. At best, we can try to analyze the challenges and take a macroscopic view of sports development. Sports unlike other industries has a clearly defined pyramid structure. The business concepts of segmenting, targeting, and positioning do not apply to the sports industry at all. In the case of football, a competitive sport, the end goal of all professional leagues and clubs (called as entities hitherto) is to be the best and move into the topmost triangle (a prime example of upstream movement). That’s where the accolades, money, and the bragging rights are. However, in reality, that seldom happens. There are multiple point of differences among entities operating in various countries. Some factors are directly related to the entities while others are beyond their control. The systematic factors are interest in the sport, government support, monetization opportunity, and availability of quality talent while the unsystematic factors are the entity’s ambitions, operating structure, and execution capabilities. A mix of these factors results in some entities becoming the best, while the vast majority are relegated to serve as feeder entities to these top-tier establishments.
Challenges to Saudi’s approach By the looks of it, Saudi Arabia is going all in. They want to be at the top and they are using the might of money to reach there. In general, to strengthen any sport, there are broadly two approaches: invest in the grassroots for long-term sustainability, build infrastructure and develop the national team or spend money to establish credibility quickly and develop using the rub-off effect. The former is the most preferred way. However, it poses a significant challenge of longer gestation periods, time that Saudi doesn’t want to spend. The latter is not free of its own share of criticisms. Its sustainability has been questioned in USA and China which despite being around for quite some time are still not considered top footballing nations in the world. Then there’s also the problem of attracting players in their prime. Most of the players who join such fledgling leagues are looking for a last big payday before they retire. Their intentions may be noble but the drive and hunger may not be there anymore. In many ways, this feels like the new Chinese Super League, which came to the fore in 2016 when its clubs started paying vast transfer fees to buy players from Europe and offering them handsome wages. However, when the government lost interest in the project, and corporates started to have financial troubles, it became desperate for Chinese clubs. Many clubs shut down due to bankruptcy. The model was thus quickly abandoned by the Chinese clubs. The weight of the history poses significant hurdles as well. Football is still seen as a Europe-centric sport with all major talents wanting to play for the biggest clubs in the biggest leagues. The craze is supported by well-formed infrastructure right from the grassroots to the highest level and worldwide audience. The largest achievements, like Champions League, are in Europe as well. And it has been witnessed time and time again, that you do not become successful in Sports just by splashing the cash; money is important, but money is not everything. Saudi’s point of view Saudi will point to what it has achieved already in terms of competing at World Cups and the level of football fandom within a country where 70 percent of the population is aged under 35. According to figures in Saudi Arabia, attendance at its football matches have doubled year on year since Ronaldo started playing there in January. Spectators at Al Nassr’s fixtures, including both home and away games, are up 143 per cent year on year. “When you talk to the clubs, there is a big emphasis on talent and development of the league,” says a source who recently interviewed with a Saudi Pro League side. “They want to know how to make their players better, whether that is sending them on loan to Europe, putting them into academies in Europe, or improving their sports science and coaching.The Saudi Government has already taken control of the 4 biggest clubs in the country, with significant backing of other clubs by private companies, like Saudi Aramco. Also, not to forget that Saudi Arabia has the money to fund the madness for a significant period of time and that might be enough to make the league sustainable in the long run. Do not underestimate Saudi Arabia - it’s not always about the money but in the end, it’s all about money.
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