Saudis and sports

[MU82]

I was gonna put this in the golf thread but it's really more about what might be the NEXT sports target for the Saudis.

The NYT's DealBook email newsletter had an interesting take on the subject, specifically about potential Saudi involvement (or even takeovers) in other sports like tennis and basketball:

When the Saudi Arabian-backed LIV Golf series announced an agreement to join with the PGA Tour on Tuesday, it shocked deal makers across the sports world.

“It’s been a mix of stunned and in disbelief,” Alex Michael, a managing director at the investment bank LionTree, told DealBook about the general reaction.

Industry insiders quickly moved on to wondering which sport could be next.

Saudi Arabia’s enormous sovereign wealth fund, which is known as the Public Investment Fund, or P.I.F., has an appetite for sports. It has made investments in WWE, Formula 1 and a national soccer league (for which the country created an enormous war chest to sign big stars like Lionel Messi, who turned down an offer this week).

But the kingdom’s history of human rights violations has been an obstacle to some deals in the United States. In 2019, the entertainment giant Endeavor returned the fund’s $400 million investment after the murder of the Washington Post columnist Jamal Khashoggi. And until recently, the PGA Tour was eager to use Saudi Arabia’s record against it.

That moral concern seems to have been overridden by the PGA Tour’s business concerns. The deal with LIV Golf came together after the rival circuit picked up traction and lured players away with lofty purses, ultimately making it infeasible for the PGA to compete.

“The Saudis didn’t change history or change who they were,” said Lyle Ayes, chief executive of Verance Capital, which invests in sports. “The deal just made sense.”

Effectively a commercial partnership, the deal may open the door for more sports businesses to accept P.I.F. funds, Ayes said. (Critics would say that was one of Saudi Arabia’s goals in pursuing sports investments in the first place.)

It would be difficult to pull off the LIV Golf playbook in another sport. Baseball faces challenges that would make an investment in a rival league risky: Its fan base is aging, the regional sports model is collapsing, and there aren’t a lot of spare baseball stadiums big enough for a major-league team. A rival to the National Football League would require a large number of players, and past efforts to create competitor leagues have flopped.

The National Basketball Association might be the easiest team league to challenge. Basketball requires fewer players than baseball or football, and courts are fairly easy to find or build. But given how much U.S. players are already paid, it’s unclear what a rival league could offer.

Tennis is probably the best candidate for a rival tour. Like golf, it’s an individual sport, which makes it easier for P.I.F. to lure athletes with big checks. And while there’s a smaller cohort of stars to recruit than in golf, a rival league would need only about a dozen players for an elite tour. Some tennis stars, including fifth-ranked Stefanos Tsitsipas, have already played in Saudi Arabia at the Diriyah tennis exhibition. The threat of Saudi competition is likely one reason the WTA raised money from the private equity firm CVC Capital this year.

Not all options involve poaching athletes. Insiders say they expect the Saudis to begin investing in U.S. sports teams. The N.B.A. has already changed its rules to allow it. And while the N.F.L. doesn’t allow any institutional investors, many expect that to change soon, too.

And while the path didn’t seem available a couple of years ago, the most efficient route for P.I.F. to own a major sports series like the PGA Tour may now be to just acquire one.

“It certainly would be easier to come through the front door,” LionTree’s Michael said. “If the PGA had, from the get-go, said, ‘Hey, you can value us at some massive premium to what we think we’re valued and give us $3 billion,’ we would have never had LIV Golf.”

+++

NBA commissioner Adam Silver, speaking on the Dan Patrick show during the Finals, said he wasn't surprised by the golf merger. He also noted that golf and basketball are "global sports."

“When the Saudis invest in sports, it gets outsized attention. Now, I don’t want to complain about that because we want to get outsized attention. On the other hand, somebody could go down the list there. They are investors in some of our largest American corporations. Some of the most well-known brands have investments from them. And I also think it’s a two-edged sword.

“I hear the comments about sportswashing. On the other hand, you’re talking about it, others are talking about it. … In the same way the World Cup — the football World Cup, soccer World Cup — brought enormous attention to Qatar. I think people learn about these countries, learn about what’s happening in the world in ways they otherwise wouldn’t. So I think the media does its job.

“But … now talking specifically about the NBA, where we’re such a global sport, I think people are a little too dismissive these days about the benefits that come from the commonality around sports. That with a sport like basketball — our finals are distributed virtually everywhere in the world, the sport is played everywhere in the world — it’s an opportunity to bring people together.”

The NBA changed its rules last year to allow sovereign wealth funds and private equity funds to buy minority stakes in NBA teams -- no more than 20%. The Athletic says that so far, no sovereign wealth fund has taken a stake in a team.

“We allow funds to invest in teams but not control teams, not to have influence over teams,” Silver said. “So to own an NBA team there has to be an individual with a certain percent of the team to control it.”

That has opened the door for potential investments or attempts at investment by PIF or other sovereign wealth funds, which could bring massive capital and controversy for the league. Many of the largest funds worldwide are associated with countries that have been accused of human rights abuses.

The NBA has grown its business relationship with the United Arab Emirates in recent years, playing exhibition games there this past season. The UAE has been condemned by international human rights groups for its repressive anti-LGBTQ laws.

It's a fascinating topic. Was what happened with the PGA Tour just the tip of the iceberg? Or would it be too difficult for the Saudis to get entrenched in other major sports leagues?

[🏀]

I’m more concerned about the documents that went from Mar-a-largo to Bedminster and the disappeared after the LIV event.

[The Hippie Satan of Hyperbole]

I think one of the issues that Saudis and other petro-states face with investing in American sports is that it's hard to buy your way to a title with CBAs, salary caps and luxury taxes in place. Part of what they want to do is not just make a sound investment, but to "sports wash." They want to rehab their image by tying it to sports glory.  Buying 20% of the Charlotte Hornets may be a great financial investment, but it doesn't do the rehab work.

Also, I've been thinking about what I would do if I were a long-suffering fan of a team like Newcastle United.  Would I be happy that my team is now owned by the Saudis?  I guess I would prefer "traditional" ownership, but now my team is in the Champions League instead of hoping for year-to-year survival.  And if they weren't going to invest in my team, they certainly were going to invest somewhere - like Leeds or Aston Villa - so it might as well be my team right?

[Herman Cain]

I don’t care who the owners of Sports teams are . I just enjoy watching talented athletes compete.

[warriorchick]

If you want to follow teams that the Saudis aren't interested in, there's always women's sports.

[real chili 83]

In before the lock

[JWags85]

I think one of the issues that Saudis and other petro-states face with investing in American sports is that it's hard to buy your way to a title with CBAs, salary caps and luxury taxes in place. Part of what they want to do is not just make a sound investment, but to "sports wash." They want to rehab their image by tying it to sports glory.  Buying 20% of the Charlotte Hornets may be a great financial investment, but it doesn't do the rehab work.

Yea, even if you do buy a title (Man City), the focus isn't so much on the ownerships for any rehab.  Its not like people are suddenly thinking differently about Emrati royals cause City is killing it.

Golf was interesting cause there is tons of money, but among players, the BIG money was concentrated at the top.  So there was opportunity elsewhere.  But the NBA and the MLB, you have guys on near 9 figure deals that aren't household names.  I can't see a startup basketball league, no matter how much money, competing.  China tried, others have tried, there is just too much of a chasm after the NBA and the Euroleague.

Also, I've been thinking about what I would do if I were a long-suffering fan of a team like Newcastle United.  Would I be happy that my team is now owned by the Saudis?  I guess I would prefer "traditional" ownership, but now my team is in the Champions League instead of hoping for year-to-year survival.  And if they weren't going to invest in my team, they certainly were going to invest somewhere - like Leeds or Aston Villa - so it might as well be my team right?

I would wager that 95% of Newcastle fans couldn't care less.  I don't think long suffering City fans have lost a wink of sleep going from after thoughts to utter domination.

[MU82]

Yea, even if you do buy a title (Man City), the focus isn't so much on the ownerships for any rehab.  Its not like people are suddenly thinking differently about Emrati royals cause City is killing it.

Golf was interesting cause there is tons of money, but among players, the BIG money was concentrated at the top.  So there was opportunity elsewhere.  But the NBA and the MLB, you have guys on near 9 figure deals that aren't household names.  I can't see a startup basketball league, no matter how much money, competing.  China tried, others have tried, there is just too much of a chasm after the NBA and the Euroleague.

[quote author=The Sultan of Semantics link=topic=64842.msg1555975#msg1555975 date=1686409064
Also, I've been thinking about what I would do if I were a long-suffering fan of a team like Newcastle United.  Would I be happy that my team is now owned by the Saudis?  I guess I would prefer "traditional" ownership, but now my team is in the Champions League instead of hoping for year-to-year survival.  And if they weren't going to invest in my team, they certainly were going to invest somewhere - like Leeds or Aston Villa - so it might as well be my team right?


I would wager that 95% of Newcastle fans couldn't care less.  I don't think long suffering City fans have lost a wink of sleep going from after thoughts to utter domination.

I have no idea what Euroleague ownership rules are, though I could see a Saudi-bought team challenging for titles there. But I agree that significant entry into the NBA or another North American major-league team sport would be highly unlikely in the foreseeable future. But I'm starting to think "never say never." Ownership rules can be changed, and have been changed quite recently when it comes to the NBA.

I'm not sure enough people care about tennis in the U.S. for it to really matter if the Saudis got involved there.

Golf really was the perfect avenue for them to do their sportswashing, and they pounced.

[Goose]

Herman

I am with you. I do not care who owns any team or league.

[panda]

I think one of the issues that Saudis and other petro-states face with investing in American sports is that it's hard to buy your way to a title with CBAs, salary caps and luxury taxes in place. Part of what they want to do is not just make a sound investment, but to "sports wash." They want to rehab their image by tying it to sports glory.  Buying 20% of the Charlotte Hornets may be a great financial investment, but it doesn't do the rehab work.

Also, I've been thinking about what I would do if I were a long-suffering fan of a team like Newcastle United.  Would I be happy that my team is now owned by the Saudis?  I guess I would prefer "traditional" ownership, but now my team is in the Champions League instead of hoping for year-to-year survival.  And if they weren't going to invest in my team, they certainly were going to invest somewhere - like Leeds or Aston Villa - so it might as well be my team right?

Toon army has two words -

[Uncle Rico]

It’s why sportswashing works

[muwarrior69]

If you want to follow teams that the Saudis aren't interested in, there's always women's sports.

..especially any with a trans women athlete.

[panda]

..especially any with a trans women athlete.

You mean a man ?

[muwarrior69]

Herman

I am with you. I do not care who owns any team or league.

I get your point, but damn, I was sure glad when George Steinbrenner bought the Yankees from CBS. Now Hal and Hank are another story.

[muwarrior69]

You mean a man ?

I see what you did there.

[Uncle Rico]

..especially any with a trans women athlete.

Yup, they’ve infiltrated women’s sports at every levels and completely destroyed them.

/wanking motion

[shoothoops]

If you want to follow teams that the Saudis aren't interested in, there's always women's sports.

Saudi Arabia is already active in Women’s golf and tennis and soon to be more. Visit Saudi was an initial sponsor of the FIFA 2023 Women’s World Cup Soccer before a big backlash changed that.

https://www.arabnews.com/node/2080616/sport

[MuggsyB]

We should annex Saudi Arabia.  And a bunch of other countries. 

[muwarrior69]

Yup, they’ve infiltrated women’s sports at every levels and completely destroyed them.

/wanking motion

I did say a as in one.

[The Hippie Satan of Hyperbole]

Toon army has two words -

And that’s pretty much where I would land at the end of the day.

[Jay Bee]

Yup, they’ve infiltrated women’s sports at every levels and completely destroyed them.

/wanking motion

Uncle Rico wanking to deez dudes is expected

[warriorchick]

Saudi Arabia is already active in Women’s golf and tennis and soon to be more. Visit Saudi was an initial sponsor of the FIFA 2023 Women’s World Cup Soccer before a big backlash changed that.

https://www.arabnews.com/node/2080616/sport

Interesting.  Are members of the Saudi women's team allowed to drive themselves to practice?  Or be in a room with a male coach?

[Uncle Rico]

Uncle Rico wanking to deez dudes is expected

Poor JB.  Boogeyman everywhere.  World must be terrifying for you.  Eat a steak and relax

[rocket surgeon]

..especially any with a trans women athlete.

those aren't "women" sports!!  XX = female prove me wrong! 

if i were a woman, i'd be majorly p!ssed(understatement of the century) thinking it's men once again trying to push women back down.  it has taken them 100 years or more depending on how you identify the suffragette movement only to have some XY dudes in disguise erase it all in a few years. 

  hey, here's an idea-have the saudis start up a tranny league of sports.  that would show they're real "tolerance" eyn'a?

[The Hippie Satan of Hyperbole]

those aren't "women" sports!!  XX = female prove me wrong! 

if i were a woman, i'd be majorly p!ssed(understatement of the century) thinking it's men once again trying to push women back down.  it has taken them 100 years or more depending on how you identify the suffragette movement only to have some XY dudes in disguise erase it all in a few years. 

  hey, here's an idea-have the saudis start up a tranny league of sports.  that would show they're real "tolerance" eyn'a?

Shocking that this is where you fall on this issue.

Kudos to pretending to care about women's rights though.