Why the era of Saudi “sportswashing” could be over

0:01Sky News, the full story first.

0:12They tried to improve their image by spending on sport. Now, Saudi Arabia looks like it's having a rethink, and this is why.

0:27Hi everyone, Neil here, and today we've got some, well, potentially massive news in the world of sport. and it's all to do with the Live Golf Tour. Ever heard of that? Well, it started back in 2022. In essence, it was a rival to the long-established PGA Tour backed by an absolute pile of cash coming from oil-rich Saudi Arabia. From the outset, it was hugely controversial. An attempt to improve Saudi Arabia's image or sports washing as it's become known. I've come to terms with it. It's very hard to keep up with people that have more money than anyone else. And again, if they want to put that money into the game of golf, then why don't we partner with them and make sure that it's done in the right way?

1:13And it didn't stop with golf. Saudi cash has been thrown at Formula One, boxing, even the beautiful game of football. Manchester United legend Cristiano Ronaldo was persuaded to move to the little-known Saudi club Al Nasser in a deal so far worth north of half a billion. I play in the most important clubs in Europe, and for me now it's a new challenge. But now there are reports that the Liv Tour might be on the verge of collapse and that Saudi Arabia's investment in sport is soon coming to an end. So what on earth is going on? Our sports correspondent is Rob Harris. Rob, to get us started, probably worth you reminding me, everyone else, what Liv is, who's behind it, what the purpose of it was?

1:58Well, it's a Saudi power play and an attempt to launch a hostile takeover of the golf world in 2022 by enticing some of the biggest names. Jon Rahm paid hundreds of millions to sign up. Bryson DeChambeau, Ian Poulter, Lee Westwood. They had to leave the existing established tours to join the rebellion. So explain how this tour worked. Well, what they claimed it would be, it would give more freedom to the golfers, fewer events in control of their destiny more a different format built around teams an attempt to get fans around the world invested in these groupings of players like as if they're football clubs or rugby teams in broader terms the format was different live why the name in roman numerals 54 they'd be playing a 54 whole format rather than the traditional 72 over four rounds and yet But eventually, they did shift it anyway towards the 72.

2:56So they lost their tethering to the Roman numerals in 54. Look, plenty of speculation on the future of Liv around at the moment. I mean, what do we know? If you go on X right now and people are practically writing the obituary. Well, throughout the day on Wednesday, reports began to grow that the public investment fund of Saudi Arabia, the sovereign wealth fund of the kingdom, was preparing to pull the plug on this investment. and the Gulf War had just come off the back of the Masters at Augusta, so everyone's together, speculation probably growing, word of mouth spreading. At the heart of this, we have had absolutely no denial from PIF at the time of recording.

3:35Now, this is the Saudi Sovereign Wealth Fund. The world is suggesting that they aren't good for their money, and yet they haven't tried to correct the record at all. So look, just distill this down for me. What was the point of the Live Tour? Was it simply an investment opportunity? Did they see a gap in the market for a competitor too? Well, it comes down to what Saudi Arabia is doing in sport. Is it about helping the sports world purely? Is it about using a soft power tool to gain influence and status around the world? You're about to mention the word sports washing, aren't you? And that's the word used by human rights groups.

4:10It's all about trying to divert attention from human rights violations in Saudi Arabia to have the world absolutely in hock of the country in terms of reliant on its funding, whether it's golf, football, boxing, Formula One, and it's through both owning teams, sponsorships as well, and about protecting your status. And that's never more important at the moment as the conflict rages in the Middle East about where you are in the world standing and the importance of you as a country of Saudi Arabia. You rattled off a bit of a list of sports there, Rob. So the Saudi investment in commercial sport simply isn't limited to golf then?

4:52No, and we've seen particularly this thing called Riyadh season. It seems to never end and a load of sporting events. And we see it perhaps most visually through boxing, which meant actually there was a big fight at Wembley a couple of years ago where the Saudi national anthem was played. In fact, Wembley became Saudi for the night. And a lot of boxers have got used to these big paydays, but also football as well. of footballers like Cristiano Ronaldo enticed to Saudi Arabia with huge paydays of hundreds of millions of pounds. I mean, certainly not market rate for Cristiano Ronaldo at that stage in his career, was it?

5:25No. And also you'll go into a league that does not have the same popular appeal around the world. It's not got the same trophies that perhaps you might have grown up wanting to win. It is a big footballing nation. They have many Asian titles amongst their club side, certainly. But the league is using its wealth through a lot of clubs owned by the Public Investment Fund of Saudi Arabia. There are multiple clubs in the league. The PIF also owns Newcastle United. The PIF, which is ultimately overseen by the Crown Prince Mohammed bin Salman. Cristiano Ronaldo going to Saudi Arabia, did that move the dial at all?

6:01Are we now all addicts to the Saudi Arabia Super League, or whatever it's called? They don't have any major rights deals around the world. They'll have clips that will go around. You'll see some moments and he's still banging in the goals. It's fifth decade. But is it doing what the Saudis wanted? I mean, do they have a domestic football pedigree that they didn't have before? And we have seen players who did go there like Jordan Henderson decide to back out and leave. And interestingly, at the start of this year, there was discontent from Cristiano Ronaldo. Murmurings about him, withdrawing from games, protesting that the funding wasn't there for his team anymore.

6:35So this year, even before the war started, which will put pressures on the Saudi economy in future funding into these vanity projects of sports, there was concern actually, is the pace of this investment in sport slowing down? Is my assessment correct? For all the amount of money that the Saudis have spent, have they got the returns that they were looking for, financial or otherwise? Well, the Saudis might say it's about the health of the nation and about trying to please a very young population that's modernizing and to give them these big sports events that they're so in tune with. Turkey, Al-Ashayk, the sports boss of Saudi Arabia, he's very much now visual face, sort of almost taking over the world of boxing.

7:14They even bought one of the big boxing magazines, The Ring magazine as well. But is it delivering an immediate financial return? No, maybe they would say it takes long-term investment play to get your returns. But these huge amounts, boxing, football, aren't necessarily delivering at the moment. And with Liv, the fact they've lost over a billion, they've had to spend so much on these contracts. And what it's left Liv in a situation with is they've not said it's closing. Potentially, they're now trying to search for an alternative source for investment. But the messaging over the night at the time of recording from Scott O 'Neill, the CEO, has been that they're going full throttle ahead for this season.

7:54Previously, the talk had been about many years down the line. Correct me if I'm wrong, but Saudi Arabia has plenty of cash. They have literally money to burn. So I wonder if the key word in everything that we've been discussed is investment. That actually the geopolitical capital, as well as the financial capital that they wanted to get out of this, they just haven't seen. Yes, and the public investment fund is worth a trillion dollars. There'll be so many things you encounter in life that probably have some form of investment from AIF. And this is about diversifying the economy away from oil to try to deliver these returns.

8:31So the sense is now with this new strategy that's actually just been announced this week about the plans going forward, about the key areas of investment priorities and what there is no mention of, certainly the press release version we have, is sports. And the previous strategy did repeatedly mention sports. And you get a sense of where the strategic priorities are about domestic investment and about efficiencies as well, as they call it. So read the tea leaves for me. What has been happening inside Saudi Arabia that has caused the investment fund to not just have a rethink, apparently, but have a complete U-turn on its pursuit of sport as an investment opportunity?

9:12Well, I mean, there is a war going on quite close by, which I suspect might be a factor in this. And undoubtedly the shockwaves of the economy, the repercussions of that that will cause challenges for the Saudi economy, but also where you have to spend your money. This war has clearly shown all the Gulf nations that there's a need to invest in defence to protect your country. And beyond that as well, it's about where you spend. And they've got the 2034 Men's World Cup coming up from FIFA. So they've got that commitment to build a lot of stadiums. That is a key strategic priority, not mentioned in the PIF strategy, interestingly.

9:51But they've already been scaling back in the last year. This NEOM mega project. That's this massive wall slash city that they were going to build out in the desert. They were proposing 150 miles of it initially, or maybe even a bit more. Raised off the ground. Exactly. It's been reduced significantly in scale, hasn't it? Yes, all the murmurings are. It's actually going to be much smaller, at least initially. They're not going to be able to build this. It meant the environmental cost of it alone, building this huge project in the desert. They also had to cancel plans to stage the Asia Games in 2029.

10:27Not the summer games, the Asia Winter Games with winter resorts. And they've had to abandon those already. But look elsewhere in the region. Qatar had the World Cup not that long ago. I mean, what sort of lasting legacy has there been for that particular Gulf state? Well, in terms of some of those stadiums, they're not going to say busy all the time. They had to build a lot of them. They're reliant on the fact FIFA have handed them certain events like Youth World Cups for many years down the line and Arab Cups, but there isn't suddenly a huge number of people going to watch domestic support. It's a small population, local populations, under 400 ,000, many migrant workers.

11:03And in fact, obviously against the backdrop, all this is how these projects are built with workers brought in on low pay, questions over their conditions, a lot from South Asian countries in particular. Saudi and Qatar will say they are trying to improve conditions. But in terms of what has Qatar got out of the World Cup, well, it has got growing status on the world stage. It has been seen as repositioning itself in some ways as the Switzerland of the Middle East, this heart of diplomacy, helping to broker, being the middlemen, you know, even in terms of Roland Hamas, it was where talks have been sent with Hamas in Qatar.

11:41You know, they have been trying to position themselves this very influential force on the world stage. But in terms of sport, is it delivering returns? Well, their football team Paris Saint-Germain won the Champions League. That's one thing. Well, what about the other team? I mean, let's talk about the Toon Army here. I mean, if you are heading up Newcastle way anytime soon, should you be worried about the future of your team? And there had been doubts about that spending and investment coming from Saudi Arabia, in part seeming that they were hampered by the Premier League's financial rules, which do limit the losses you can make.

12:13But since now, a few years into their ownership, they have won a trophy, the first in decades, the League Cup. But they aren't challenging up there. They're not progressing in the Champions League. A realisation how much it takes to invest. One of their big players, their Isaac, eventually was sold to Liverpool. So they couldn't hold on to him. It wasn't appealing enough as a project to stay for the long term. Ultimately, he's a player who still took the leap up to one of those bigger established clubs. and it's how you can attempt to sort of engender that long-term confidence in the project. They've got new stadiums potentially built.

12:48Then you have to look at it broader. Is their ownership of Newcastle in part about what they can get out the local area with property and commercial investments in there? And maybe you could get more of a return on those compared to the football club initially.

13:14I just wonder if we're now at a point where we can answer the question, does sports washing work in the negative? Look, all of this for Saudi Arabia started in the aftermath of the murder of the journalist Jamal Khashoggi. There was an image to repair after that in terms of the world's willingness to do business with Saudi Arabia. The UK government pulled out of going to the Davos in the Desert conference. as it's known, that's at the stage there. There was a sudden belief from businesses that they couldn't be associated with Saudi Arabia, but ultimately by them offering so much cash to projects around the world, it was too hard to resist.

13:51Look, Rob, I mean, you very directly put these questions about sports washing directly to the Saudis, didn't you? Yeah, I had a chance to interview Saudi sports minister as well, and they have taken on issues like Jamal Khashoggi and sports washing. But at the very first Live Golf event, which was held at Centurion Club here in the UK, at St Albans, in 2022, they held the big first press conference with the golfers being asked about why they took the cash. But also leading the press conference, Broughton as the press officer, wasn't just any old comms guy, it was Ari Fleischer, former White House spokesman from George W.

14:30Bush's time in office. and if you wanted to think about separating sport and politics, he was not the man to have there because then I immediately brought up, well, a few years ago you posted this about Saudi Arabia, talking about how the king was spending money on these projects for alternative purposes. Okay, so, and you can be as brutal as you like here, Rob. My assessment that sports washing hasn't worked for Saudi Arabia is wrong. I mean, ultimately, we're not talking about Jamal Khashoggi today. We're talking about Live Golf. We're talking about the future of that particular tour. And look, people are happily going to Saudi Arabia as a tourist destination, as a sporting destination.

15:09I'm wrong. It has worked for them then, hasn't it? And one of the reasons we're not talking about human rights in Saudi Arabia is because of that re-engagement with them. We had Prince William going there on an official visit fairly recently. The UK government is happy to do business with Saudi Arabia, holds joint conferences. There's Donald Trump very much in bed with Saudi Arabia. In fact, the Live Golf Tour has several events at his courses in the US. Now, it was launched when he was out of office, but did the Saudis realise that there is still value in being associated with Trump? It certainly paid off.

15:46In fact, Trump hosted talks at the White House last year with this attempt to end the war in golf, to reunite the Live Tour with the PGA and DP World Tour, the established tours, which had seen a merger on the car. So he was getting involved in that right at the start of his second term in office. Not perhaps some bigger domestic priorities, but as a golf fan, but with vested interest with his own golf courses, hosting Live events, getting himself involved in that. He's been at the events as well. Is that it then? I mean, sport politics now just inextricably linked thanks to investment funds of Qatar, Saudi Arabia, and I imagine there are others who are doing it as well at the moment.

16:29And sports can't resist it. It's often about growth, about wanting to catch, you know, as many businesses are, and the sports that aren't getting the Saudi funds, I'm sure would be appreciative of it. We've got this whole denting of confidence in PIF funding. We'll raise deeper questions as we don't have any commitment from the PAF about their long-term commitment to Live Golf. Rob, thanks very much indeed. That's your lot for today. If you've enjoyed what you've heard, do make sure and give the podcast a follow and let us know your thoughts, why at sky.uk. We're back again tomorrow.

17:19Thank you.