Saudi spending on football ranks second in the world

The Saudi Arabia football transfer window has closed, marking the end of a historic summer of spending from clubs based in the Gulf state.

The Saudi Professional League ranked second after the English Premier League in spending on football transfer fees, with 954 million euros ($1 billion) spent on bringing in players for fees alone, according to data from data transfer website Transfermarkt.

Saudi clubs outspent four of the “big five” leagues, marking the first time another league has outspent any member of the dominant European group since 2016.

The big spending figures come despite the failure of some high-profile deals, including a late bid from Al-Ittihad for Liverpool star Mohamed Salah, which reports suggested could have been worth more than €200 million.

Saudi spending is dominated by the country’s four largest clubs, Al-Ittihad, Al-Ahly, Al-Nasr, and Al-Hilal, which since June have become majority owned by the country’s Public Investment Fund.

Of the world’s 10 biggest spenders, three are owned by the Public Investment Fund, and the four clubs combined spent €835.1 million on transfers, while generating just €4.86 million in fees received for players, according to Transfermarkt data.

While English Premier League club Chelsea outspend international teams, Saudi club Al Hilal have been the biggest net spender this summer, generating just €1.4 million from transfers away from the club.

Speaking to CNBC’s David Faber earlier this summer, Public Investment Fund Governor Yasser Al-Rumayyan said that young people in Saudi Arabia, with 63% of Saudis under the age of 30, have driven interest in sports investing from State Fund.

“You will have a lot of young people interested in sports and entertainment and that is a key part of the offer.”

However, Al-Rumayyan insisted that the fund’s decisions were not driven solely by interest in sports, stressing that investments must generate financial returns.

“It makes financial sense for us, and it’s the only way to move forward. We don’t like to subsidize things…we’d like it to be sustainable.”

However, human rights groups and activists have criticized the high levels of investment in football from Saudi Arabia and other Middle Eastern countries, with accusations of “whitewashing of the sport” directed at the country.

The transfer window has ended in Saudi Arabia, with the future of English club Manchester United back in the spotlight. The club’s shares suffered their biggest ever drop in a single day on Tuesday.

This came after a report from the Mail on Sunday newspaper that said the club’s owners, the Glazer family, believe they will be able to secure a valuation of up to £10 billion ($12.5 billion) by delaying any sale until 2025.

Even with no general Saudi interest in buying the club, expectations of significant long-term spending on football from the Kingdom seem likely to boost valuations across European clubs.

The European Club Association, which represents 220 football clubs from across Europe, discussed the impact of Saudi Arabia’s investment in sport at its general assembly this month.

Speaking to reporters after the meetings, club president Nasser Al-Khelaifi said he was not concerned about the impact the Saudi League could have on European football.

“We believe in ourselves… We have the best competition in the world, the biggest clubs in the world, the best players in the world. I don’t think it’s a real risk.”

Even if it appears that potential ambitions to play in European football’s top tier, the Champions League, will be met with a snub from European club competitions, the Saudi football push looks set to continue.

This year’s Club World Cup will be held in Saudi Arabia in December, with the tournament draw potentially creating a match between Al Hilal, home of Brazilian striker Neymar, and Champions League winners Manchester City, if both clubs can beat the other. opposition.

The Kingdom’s first high-profile international football tournament will be a major test, with several media outlets reporting that the country is targeting to host the 2034 World Cup, after dropping its plans to jointly host the competition with Greece and Egypt in 2030.

Other challengers to European dominance have failed to make a lasting impact, with the Chinese Super League losing a significant number of players due to financial concerns hitting clubs in the wake of the Covid-19 pandemic.

It remains to be seen how Saudi Arabia’s ambitions will play out in the long term, but if current levels of investment continue, Saudi Arabia could deliver a major shake-up in the world’s most watched sport.