Saudi Arabia is spending BILLIONS on sports, and many people think they are just sportswashing their image.
But the real story is more complex — and their involvement is much deeper than most realize.
Here's a quick breakdown:
So Saudi Arabia makes A LOT of money on oil.
The country’s state-controlled oil company Aramco produces more than 10 million barrels of crude oil daily, reporting a PROFIT of $161 billion last year alone.
That's...
$441 million in profit every day
$18 million in profit per hour
$ 306,000 in profit every minute
And it was the highest-ever recorded annual profit by a publicly listed company in history.
Saudi Aramco Company Overview
• Controlled by Saudi Arabia
• World’s largest oil producer
• Record $161 billion in profit last year
• Market cap of $2.1 trillion (3rd largest behind Apple & Microsoft)
But oil is still a tricky business, and Saudi Arabia is highly reliant on fossil fuels.
For example, oil accounts for 42% of Saudi Arabia’s total gross domestic product (GDP), 87% of its budget revenues, and 90% of export earnings.
And when Saudi Arabia saw a sharp decline in oil prices throughout the early 1980s, they entered a deep, prolonged recession that took nearly three decades to recover from.
So that’s why Saudi Arabia’s Crown Prince Mohammed bin Salman (MBS) announced the Saudi Vision 2030 plan in 2016.
The plan laid out a framework to reduce the Kingdom's economic dependence on oil by diverting profits (via their $620 billion sovereign wealth fund) into other industries like sports.
So Saudi Arabia got to work and has already spent over $10 billion on different assets across sports.
Here are a few examples:
• Saudi Arabia bought Newcastle United FC for $408 million in 2021.
• Saudi Arabia has a 10-year, $1 billion deal with WWE that guarantees them at least two events each year.
• Saudi Arabia has a 10-year deal with Formula 1 worth $650 million, guaranteeing them a home race each year. And their state-owned oil company Aramco has a 10-year, $450 million sponsorship deal with F1, too.
• Saudi Arabia has paid at least $150 million to host high-profile boxing events, including fights with Anthony Joshua, Oleksandr Usyk, and Andy Ruiz Jr.
And this is really just the tip of the iceberg.
Saudi Arabia recently committed at least $3 billion to a partnership with the PGA Tour. And they also took over ownership of the country's four biggest soccer teams, signing Cristiano Ronaldo, Karim Benzema, and others to deals worth more than $2 billion.
But that doesn't mean sportswashing isn't happening.
Sports can be an extremely lucrative investment — but they can also be used to portray a more positive image of the country to the Western World, enabling Saudi Arabia to invest in many other (ancillary) businesses.
So don't expect Saudi Arabia to stop anytime soon.
If anything, they are getting started.
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