Reuters/Hamad I Mohammed
Plans have been formally agreed to create a new boxing league funded by Saudi Arabia.
In a deal reportedly worth $10 million, the country’s Public Investment Fund and TKO Group Holdings of the US – owner of the UFC and WWE combat sports series – will produce, promote and be responsible for the venture’s operations.
In recent years, both the UFC and WWE have been regular visitors to the kingdom as the country has embarked upon a programme of internal socioeconomic transformation. As part of this process, the Saudi government has targeted $22 billion of sports spending by 2030.
The Gulf’s biggest country is gaining ground as a major sports event host. It is set to host the FIFA Men’s World Cup and the Asian Winter Games in the coming decade.
At the same time, Saudi Arabia has acquired significant stakes in English Premier League football club Newcastle United and the Aston Martin F1 motor racing team (principally via PIF, more recently by SURJ – a specialist sports investment subsidiary of PIF).
However, rather than simply buying into existing sports properties, Saudi Arabian authorities have also created their own IP by creating new events and formats.
The most notable example of this has been the LIV Golf series, which continues to disrupt and divide the sport, although it is now more widely accepted than when it was launched in 2021.
Last year, Riyadh hosted the first-ever Esports World Cup, an annual event funded by PIF. Rumours have also circulated that Saudi Arabia may be working on a new cricket series to rival India’s Premier League. The country’s agreement with TKO is consistent with this drive to create new-format sports.
Building a global sports industry presence calls for significant financial resources and a considerable amount of time
By now, the argument is well rehearsed that such ventures are needed to drive the country’s diversification programme. Saudi Arabia’s ruler Mohammed Bin Salman has expressed hopes that sport will eventually add 3 percent annually to his country’s economic output. A sports ecosystem will be required to make this happen, of which new format sports are expected to be part.
Creating proprietary IP isn’t just a response to the opportunities sport’s global industrial growth generates. The sector has been dominated by the US and Europe for decades, resulting in the former’s domestic sports economy currently accounting for approximately one-third of the entire industry worldwide.
Meanwhile, Europe’s ongoing influence in sport means that most of the world’s governing bodies are in the region. In many cases, the presidents of such bodies have typically been Europeans.
This hegemony is a barrier to Saudi Arabia’s successful market entry. Existing governance systems, the rules they create and impose, the nature of broadcasting and other commercial contracts, and so forth, are evidence of this.
Building a global sports industry presence and successfully competing with US and European rivals calls for significant financial resources and a considerable amount of time.
Saudi Arabia’s strategy is to pursue growth opportunities by targeting sports with a global footprint, which are commercially underdeveloped, and by developing new sports formats.
UFC and WWE offer considerable potential in both respects: combat sports are especially popular globally among young audiences, while TKO’s new boxing league will be the first of its kind anywhere in the world.
New formats and completely new sports (which the country’s officials want to create) are part of this narrative, as they will ultimately require arrangements to administer and organise them.
For instance, there isn’t currently a universally recognised global governing body in Esports. Still, with Saudi Arabia now the home of a new World Cup in this emergent sector, it is better positioned to make a play to become the home of such an institution.
If a country either hosts a governing body or owns an entire sport, it decides how the sport is governed and what rules are in place. It will also draw revenues from any commercial deals in which the sport becomes involved. Instead of a world in which Lausanne and European presidents dominate, it is one in which Saudis, Arabs and representatives of the Global South play a prominent role.
There are also economic dimensions to such a position. Europe’s sports governance economy is estimated to add almost $6 billion annually to national income. During the Olympic and World Cup staging years, there was a 0.4 percent economic bounce. Such numbers will help Saudi Arabia draw closer to its sports GDP target.
Whether through a prominent presence in combat sports with UFC and WWE or otherwise (my prediction is that, by 2050, several sports governing bodies will be located in Qiddiya, just outside Riyadh), Saudi Arabia’s endgame is attaining and sustaining strategic and competitive advantages in and through sport.
It may seem like a long way from global geopolitics to the boxing rings of Riyadh, yet both perform a similar role in helping the kingdom shape a new world order.
Simon Chadwick is professor of sport and geopolitical economy at Skema Business School in France
