Image source: Getty ImagesByDan RoanSports Editor5 hours agoThe decision of Saudi Arabia’s sovereign fund to stop funding LIV Golf after the season has cast doubt on the future of the breakaway golf series. The kingdom has invested tens or even hundreds of billions in the past decade to establish itself as a sports hub, hosting a variety of major events from high-profile fights to Formula 1 races to tennis and horseracing. What does this mean for Rahm, DeChambeau, and the other big names of LIV? The final sentence in the PIF’s statement on Thursday, when it finally announced it was pulling out from LIV Golf and ending weeks of intense speculation. The intended message was clear: despite abandoning the tour it had long described as the future of golf, Saudi Arabia is still committed to sport. The country’s massive collection of sports sponsorships has cemented its growing and disruptive influence in international sport. A future Olympic bid feels like a formality. The killing of Jamal Khashoggi in 2018, a US-based Saudi Journalist who was a prominent government critic, has severely damaged the country’s reputation internationally. It has also been criticized for its use of death penalty. Saudi Arabia’s relationship to sport has cooled down, but what is the reason? ‘Shifting priorities’ but some sports are better off than othersIn January, BBC Sport reported that the kingdom had “shifted” its attitude towards certain investments towards the end last year. “Everything in the PIF World was under serious review.” The change in strategy came after a $73bn budget deficit last year, which was driven by increased spending, and lower oil revenue. The 2029 Asian Winter Games were abruptly and indefinitely postponed. The WTA Finals for women’s tennis were to leave Saudi Arabia after the three-year hosting contract was not extended. The conflict in the Middle East has seen Iran respond to US-Israeli airstrikes by firing missiles and launching drones at its Arab neighbors. PIF’s statement last month that it was focusing on “sustained values creation…and maximising long-term returns” did not mention sport, which fuelled the perception that its interest in sport was waning. Soon after, PIF announced they had sold Saudi Pro League Club Al-Hilal. Saudi Arabia’s Snooker Masters were cancelled just two years into their 10-year contract, and the country abandoned plans to bid for the 2035 Rugby Union World Cup. But the biggest casualty was LIV Golf. PIF stated that “the substantial investment required…is not consistent with the current phase PIF’s Investment Strategy.” The decision was made in consideration of PIF’s current macro dynamics and investment priorities. In this context, it’s no surprise that LIV, which has racked up billions in losses since its launch, in 2022, was no longer compatible PIF’s investment strategy. Saudi Arabia is facing huge infrastructure and delivery costs as the 2034 World Cup approaches, says Dr Johan Rewilak of Loughborough University, an expert in sports management. “It’s plausible that the government has reallocated capital and is reassessing its sports portfolio. These decisions may be accelerated by geopolitical tensions, rising construction costs and shifting spending priorities to security and essential infrastructure instead of prestige sports assets. “Some sports seem to be better positioned than others, particularly those that have mass appeal with Saudi Arabia’s young population. Combat sports, such as boxing, are still in a good position. Turki Alalshikh, the Saudi boxing chief, insisted last year that reports of a decline in spending on sport were “100% false”. Riyadh is hosting the Esports World Cup and Anthony Joshua’s heavyweight bout against Kristian Prenga in July. The country will host the Women’s World T20 Challenge in cricket this year and is also reportedly exploring plans to create a global T20 competition. A new, state-of-the-art Formula 1 circuit is under construction near Riyadh. The BBC has been informed that PIF’s commitment to Newcastle United is unchanged and a major investment will be confirmed soon. This will come as a relief for many fans who are now increasingly worried about the future support of their owners. But the fate of LIV Golf serves as a caution to all those who had become reliant upon Saudi Arabia’s sporting spending spree. They now all know that nothing is guaranteed.
