In recent years, Football in Saudi Arabia has taken on a new dimension, becoming one of the country's most powerful tools for economic diversification and global affirmation thanks to exponential investments in the industry over the last five year. This change is part of a strategic framework, promoted by the Saudi government through Vision 2030, to transform the country's image and reduce its dependence on oil.
Historical context and the role of the GCC
Saudi Arabia, founded in 1932, is a founding member of the Organization of the Petroleum Exporting Countries (OPEC) and the world's largest oil exporter. In the context of the Gulf Cooperation Council (GCC), it is one of the most influential states. Soccer, introduced to the country in the 1920s by English pilgrims, thus has a relatively recent history compared to European clubs. Historical clubs such as Al-Ittihad and the Saudi Football Federation recognized by FIFA since 1959 represent the foundations of the Saudi football movement.
Saudi Arabia's main league is the Saudi Pro League. Founded in 1976, this soccer league now comprises 18 teams, including internationally prominent clubs such as Al-Hilal and Al-Nassr. The league is part of a larger plan to promote tourism and increase the country's visibility by supporting the football infrastructure through strategic investments.
Saudi investment in soccer on a local and international level
Saudi soccer investments are happening both on a domestic scale, with the purchase of top international players such as Cristiano Ronaldo, and on an international level, with acquisitions of European clubs such as Newcastle United. These investments are designed to have a lasting impact not only on local soccer but also to attract international attention and promote the country as a tourist destination.
The motivations behind players' interest in Saudi soccer
The possibility to offer salaries up to 5 times higher than average salaries in European leagues, combined with extra benefits, has made the Saudi Pro League an attractive destination for many soccer players. Saudi investment not only attracts top players but also serves as leverage to modernize the state in terms of labor and social laws and reforms as well, improving the overall perception of the nation. The most iconic case is that of Neymar, the footballer was acquired by Al-Hilal in 2023, in addition to a two-year contract that can reach $400 Million, he was provided with a private jet for travel, a luxury residence, $500k for each post on the social media in which he promotes the country, $80k per team victory, and finally the possibility of living with his girlfriend under the same roof, although Saudi law allows cohabitation only if married.
The key actors behind the investments: the Public Investment Fund and main sponsors
The key actors behind the phenomenon are the Public Investment Fund (PIF), the Saudi government, and local and international sponsors. The PIF is the driving force behind these investments and, together with sponsors such as Saudi Aramco and various commercial partnerships, supports the Saudi Pro League and other sports projects. This support is part of a coordinated strategy that ensures the sustainability of the project.
Vision 2030 and tourism: transforming Saudi Arabia into a global destination
The Saudi phenomenon should be contextualized in a broader movement, Vision 2030. Vision 2030 is an economic and social reform project that aims to build a vibrant society and promote a prosperous economy by diversifying the country away from its main business, oil. The government has identified sports as one of the tools to achieve this change. Thus, football investment is intertwined with an economic renewal program that aims to diversify the sources of national income by focusing on sectors such as tourism and entertainment. Innovative projects such as Neom and Qiddiya aim to transform the country into an international tourist destination, while the organization of major sporting events, such as the 2023 FIFA Club World Cup and the bid to host the 2034 World Cup, consolidate this ambition.
The issue of “sportswashing” and Saudi social reforms
Saudi Arabia has been criticized for using sports as a means to enhance its international image, a phenomenon known as “sportswashing.” However, in addition to its investment in soccer, the country is pursuing significant social reforms, such as ending the kafala system and improving working conditions. These changes show the country's intent to transform not only economically but also socially.
Analysis of the effect of investment on team results
To analyze the effect of investments on teams, a statistical analysis was conducted in which the value of teams, the total number of players, and the total visitors in home games have been compared to the number of team points. The objective of the analysis is to understand whether investment in players (Value of Teams, Number of Players in the team) and sports infrastructure (Number of visitors) has an effect on the level of teams (Points variable), and thus whether the investment phenomenon is really contributing to an improvement in the level of play or is just attracting media attention.
The first step was to prepare a database with data from Transfermakt.com, which contains the values: Points (Dependent Variable), Team Value, Number of Players, and Total Visitors (Independent Variables) for all seasons from 2013/2014 to 2023/2024, for the 7 teams that participated in the Saudi Pro League in all these seasons.
Once the database was prepared, Descriptive Statistics Analysis and Multicollinearity Analysis were then conducted to evaluate the reliability of the model. Finally, Multiple Linear Inference Analysis on python was performed to evaluate the effect of the independent variables on the dependent variable and decide whether to accept the null hypothesis H0: None of the independent variables has significant effect on the dependent variable, or to reject H0 and accept the alternative hypothesis H1: At least one of the independent variables has effect on the dependent variable.
The result that was obtained is an F-Value of 39.96 and a very low p-value, suggesting the null hypothesis to be rejected in favor of the alternative hypothesis.
Taking the individual variables into consideration, all the independent variables have a very low p-value and thus a significant effect on the dependent variable. Specifically, team value shows a positive effect on points, so a higher team value correlates with a higher number of points. On the other hand, the number of players on the roster has a negative effect on points, a higher number of players is correlated with a lower number of points, the reason may be that the negative effect of managing a high number of players if bigger then the benefit of higher turnover. Finally, the visitor variable has a positive effect on points, showing that greater investment in infrastructure contributes to the creation of a “fortress effect” that stimulates players to play better if more fans are present at the stadium.
Comparison with the European “Big Five”: opportunities and risks
The increasing economic power of the Saudi Pro League is also affecting the major European leagues: the “Big Five.” In particular, Financial Fair Play, the set of rules that obliges European teams to cover player acquisitions with revenue from the sale of players, is not applied for Arab teams, which can then invest in player acquisitions with support from external sources. The ability to attract players is leading to a revaluation of the overall market value, resulting in price inflation. This phenomenon could generate difficulties for European teams, which risk losing key talents and seeing economic competitiveness altered.
Conclusion: a long-term strategy for Saudi soccer
Saudi investment in soccer is a central component of a long-term strategy designed to promote the country as a global soccer hub. With PIF support and economic sustainability guaranteed by the Saudi government, the project has the potential to overcome the limitations of a short-term vision and build a robust sports ecosystem while contributing to the economic diversification outlined in Vision 2030.
Comments