The Saudi financial entity now in bed with the PGA Tour has stakes in all kinds of companies and sports leagues
Chances are you've visited businesses or spent money on services backed by the $620 billion Saudi Investment Fund.
There’s rhetoric, and then there’s reality. Just compare what PGA Tour commissioner Jay Monahan said almost one year ago, at the Travelers, with the language in the announcement of the PGA Tour-LIV merger this week. “Our members compete for the opportunity to add their names to history books, and, yes, significant financial benefits, without having to wrestle with any sort of moral ambiguity,” Monahan said then.
Now, the same Saudi financial entity that created LIV is the primary investor in the new multi-tour partnership, which means the moral high ground Monahan staked a year ago is clearly compromised. But was that really a hill to defend in the first place? The complex realities of the global marketplace make it almost impossible to take an absolutist position.
The Saudi Public Investment Fund (PIF) is almost everywhere. Chances are, if you left your house today (and maybe even if you didn’t), one of the dollars you spent, businesses you visited or services you used is backed by money from the $620 billion fund.
Starting in 2015, Crown Prince Mohamed bin Salman transformed the kingdom’s sovereign wealth fund from its dusty, conservative roots into an aggressive tool for the country’s diversification from its reliance on oil. The PIF has invested hundreds of billions around the world, owning substantial stakes in companies like Alphabet (Google), Costco, Meta (Facebook), Starbucks, Activision (Call of Duty), EA Sports (Madden NFL 23, EA Sports PGA Tour), Uber, PayPal and Zoom directly. Its reach in the tech sector is even broader through the cash it invests in strategic partnerships with other funds around the world, like the $45 billion it put into Japan’s Softbank Vision Fund. Softbank has positions in companies as diverse as Doordash, Cameo and Whoop—which also counts Rory McIlroy and Justin Thomas among its investors.
That part of the play is a straightforward one, says Dr. Karen Young, a political economist and senior research scholar for the Center on Global Energy Policy at Columbia. “The imperative is to demonstrate quick returns and opportunities for citizens now,” Young writes. “The benefits are meant to satiate immediate needs for job growth and to show demonstrable signs of diversification. This means new entertainment venues, theme parks and the infrastructure of a changed society and service economy.”
It's hard to argue with PIF’s success in the marketplace of dollars. The fund has quadrupled in size since 2015 and had $60 billion in revenue in 2021. In the marketplace of ideas, PIF has focused that gusher of cash on sports as a potent marketing tool for redirecting attention far beyond even the PGA Tour-LIV deal.
In F1 racing, the PIF invested $660 million in carmaker Aston Martin and its race team and is building a $1 billion entertainment hub featuring a new track that will host two races a year. That spend might just be the start: Last year, the fund reportedly offered $20 billion to buy the entire F1 commercial rights from Liberty Media, which paid $4 billion for them in 2017, and the Saudis are trying to entice multiple F1 teams to relocate from England to a new conceptual city called Neom—which is being built in a straight line across 100 miles of desert and linked with a high-speed train line.
In soccer, the fund bought a controlling interest in the Premier League team Newcastle United for $300 million in 2021 and has spent more than $500 million on contracts for superstar players Ronaldo and Karim Benzema to come play for the teams it owns in the Saudi professional league. That wage bill could eclipse $1 billion if Lionel Messi accepts a reported $350 million per year to come join yet another of those Saudi-based teams—making even the largest LIV contracts seem like part-time summer jobs.
As Monahan also said at the Travelers, “If this is an arms race, and if the only weapons here are dollar bills, the PGA TOUR can't compete.” Now, it won’t have to.