At least 1% of Saudi Arabia’s GDP is coming from its sports sector, highlighting the growing impact of the Saudi sports sector on the nation’s economy. Looking to the future, this figure is bound to increase to 1.5%, equaling 16.5 billion per annum.
Day after day, the link between the economy and sports is becoming visible. The sports industry, expected to be valued at SAR 84 billion ($2.4 billion) in 2030, has emerged as the stalwart pillar of the Saudi economic transformation strategy and a crucial vehicle for diversification.
Saudi Arabia’s aspirations to become an entertainment destination have enabled it to strengthen its financial bets on sports, with the Kingdom pledging over $6.3 billion in investment since 2021.
This piece takes a closer look at the rapid growth of the Saudi sports market and the Kingdom’s efforts to expand its positive effects on the entire economy.
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Impact of Saudi Sports Sector as a Global Sports Event Destination and Investment Hub
The hallmark of the sports industry’s growth is Saudi Arabia’s growing prominence as a leading sports center. It is highlighted by its success in securing major sporting events such as the 2027 Asian Cup, the Asian Winter Games in 2029, and most prominently, the 2034 FIFA World Cup.
The 2034 FIFA World Cup is considered the pinnacle of Vision 2030 and the epitome of progress in the sports industry, especially in the realm of football, the most popular sport in the world, and Saudi Arabia. As it stands, the Saudi Pro League, featuring players from more than 50 countries, is becoming a hub for the world’s top talents.
The last season of the league was aired across 160 countries around the world. This highlights an abundance of potential in the sports commercial space for investors as the country advances towards hosting the FIFA World Cup 2034.
Progress has not been confined solely to football. From hosting Formula 1 and E races and Women’s Tennis Association (WTA) finals to high-profile boxing matches, the Kingdom has quickly become the hotspot for world-renowned athletes and leading sports entities.
Under the PIF’s (Public Investment Fund) partnership deal with the Professional Fighter League (PLF) last year, the group will establish a Middle East and North Africa league, headquartered in Saudi Arabia. It follows the Public Investment Fund’s $100 investment in the league through its $650 funding vehicle, SRJ.
This investment marks the kingdom’s first foray into mixed martial arts (MMA), which is the third most popular sport after football and basketball. The Kingdom’s commitment to bolstering a strong sports sector primarily hinges on striking partnerships with major players in a different array of sports.
This was evident by the PIF’s recent signing of a multi-year strategic partnership with the ATP Tour, the men’s professional tennis tour, making the country a major sponsor of the league. Strategic partnerships complement the country’s efforts to play host to a litany of globally renowned sports events. This not only reshapes the country’s socio-cultural landscape but also contributes significantly to its economic output.
Expansion of Saudi Sports Industry Drives Multi-Sectoral Growth
As it expands, the sports Saudi sector not only bolsters its vitality but also catalyzes the ripple effects that are felt across adjacent industries. The Kingdom’s ventures into sports ultimately translate into an active global audience that’s drawn to the country to see their favorite stars and athletes on the pitch.
Tourism is an obvious winner of the sports-driven boom, which helps drive significant inward investment and attracts global businesses to expand to the country. Among these is REZLive, an AstroLabs expansion member. The Indian online booking agency, which recently expanded its footprint to Saudi Arabia, has been recognizing a vast potential in the country’s burgeoning tourism sector.
The interplay between sports and tourism is best exemplified by the country’s hosting of the 2034 FIFA World Cup. The global tournament will attract millions of international visitors to the Kingdom, leading to increased revenues from spending. This was particularly observed during the last FIFA World Cup edition, which took place in the neighboring country of Qatar.
During the tournament, the country had a 365% year-on-year increase in tourist inflows, with associated broadcasting revenues and visitor spending contributing to 0.7-1% of the country’s GDP. The scale of the tournament hosted by the Kingdom in 2034 creates an outsized impact that touches various sectors and industries, including construction.
Saudi Arabia is currently embarking on the biggest sports construction wave on record, fostering sustainable urban development and a resilient infrastructure. The growth of the sports sector positions it as a key employer for a larger proportion of Saudis.
This was demonstrated by a report by the Saudi Ministry of Sports, which highlighted that the industry has generated over 14,000 jobs and that career opportunities in sports grew by 114% from 2018 to 2021.
The Kingdom’s multi-pronged approach to investing in sports encompasses growing its talent development initiatives. The aim is to nurture the homegrown talent of Olympians and world-class athletes as part of its drive towards enhancing the local sports industry’s competitiveness and the country’s global leadership.
The critical path for the kingdom led to the creation of Mahd Sports Academy. It recently inaugurated the first educational school that offers Saudi emerging talents the opportunity to nurture the skills they need to shape their future careers in the sports sector.
With the deepening of socio-economic transformation, the economic impact of sports extends beyond pitches and playgrounds; the sports economy is central to the Kingdom’s development strategies aimed at creating a dynamic business environment that will drive innovation and economic growth.