One After Another: Saudi Public Investment Fund Likely to Get NFL Ownership After LIV & PGA Tour Merger

The major headlines in golf were also major headlines in the NFL. Here are some of the reasons why the Saudis bringing sportswashing to the NFL would be a “bad fit.”
It didn’t take long for word of the PGA Tour’s June 6 announcement that it would be merging with LIV Golf to circulate around NFL locker rooms.

A large number of teams, many of whom are staffed by golf-obsessed coaches and players, were in the midst of their offseason training programmes when the news spread. Some NFL fans immediately reached for their phones or TVs in surprise, as many fans have friends or family members who are PGA tour players.

“It was immediately out on the practise pitch,” said one AFC C-suite executive to Yahoo Sports. I overheard it in the corridor, and by the time I got outside, the rumour had already spread among the male students.

When was the last time that occurred? I can’t think of it. If [Saudi Arabia] had wanted a piece of the NFL, I don’t know how we would have handled it, but I imagine that discussion will be happening somewhere in the background among [team] owners.

Perhaps top priority at the moment what with the conclusion of the sale of the [Washington] Commanders and the upcoming game between the [Seattle] Seahawks.

The chances of the Public Investment Fund (PIF) of Saudi Arabia, or any other sovereign wealth fund, obtaining an NFL share remain exceedingly unlikely, as the NFL does not allow foreign ownership of its franchises.

However, after the LIV/PGA merger, several top-level team executives who spoke to Yahoo Sports expressed similar concerns about the influence of foreign money on the NFL’s future.

Don’t ever say never, but it’s quite unlikely. When asked about the situation, one NFL team president said, “The fact that the PGA couldn’t sweat out LIV for a year is pretty bad.”

It was said much more bluntly by another official of equal standing: “The PGA was weak. They were tough on the outside, but their quick capitulation revealed all. Only if the NFL changes its mind and welcomes that money in will any portion of the league be owned in [a sovereign wealth] situation.

And perhaps that does occur. However, the NFL will not give in to pressure. Our most troubled asset, which has been the subject of numerous litigation and investigations, is expected to fetch over $6 billion at auction. We’re not exactly starting from a weak position here.”

That’s a valid point, but even the NFL has blind spots. We’ll also discuss the significance of this to the league at large. First of all, in 2023, the United States will host the Summer Olympic Games.

You need to know what Saudi Arabia’s sovereign wealth brings to the table and what its advocates and detractors say is driving it before Thursday’s opening of the U.S. Open, which will have players from both sides of the PGA/LIV split competing together again. Whether or not the NFL is prepared to accept it, it has a lot of potential.

American “sportswashing” is a recognised phenomenon. Get started with the PGA. About a year ago, few would have predicted that the PGA would be forced to merge with a golf tour that was owned by a foreign company.

Especially after proving its public relations might in the fight against LIV by, among other things, drawing attention to Saudi Arabia’s dismal human rights record and the fact that many of the 9/11 terrorists were Saudi nationals.

It appeared as though the PGA was ready to go to war with LIV in the courtroom and the arena of public opinion.

The PGA decided that going into business with LIV was the best option a year later. And just like that, the Saudi regime’s sports and entertainment holdings expanded by another widely recognised asset.

Primary ownership of Premier League club Newcastle United, a massive stake in California ticket juggernaut Live Nation Entertainment, growing ties to Formula 1, the WWE, and the creation of The Saudi Cup, an international horse race with a record $20 million purse—these are just a few examples of the many ventures that make up this portfolio.

That haul wouldn’t be as great if it weren’t for the fact that it included the signing of Cristiano Ronaldo, a legendary football player from all over the world, to play for the Al Nassr Football Club in Riyadh. All for the low, low price of just 215 million dollars ($200 million) annually.

Weakness in the PGA. They were tough on the outside, but their quick capitulation revealed all. … The NFL will not give in to pressure. One of the NFL’s top brass.
The Saudis’ sovereign wealth fund, which as of the end of 2017 held over $650 billion and aims to reach $1 trillion by 2025, is an excellent example of this type of power.

The Saudi Arabian effort to make its mark in the world of sports has only just begun. Forbes first noticed this trend in 2020, when it reported on Saudi Arabia’s sudden and aggressive “hunt for cheap sports assets.”

This pursuit allegedly involved Crown Prince Mohammed bin Salman circling multiple European football teams with revenues hit hard by the pandemic.

Prince Mohammed’s push for a more prominent role for Saudi Arabia in international sports was viewed favourably because it represented a strategic use of the Public Investment Fund (PIF) in furtherance of his “Vision 2030” drive to diversify the Saudi economy away from its reliance on oil.

Along the way, having more diverse assets and ties might boost Saudi Arabia’s international standing and increase the living standards and national pride of its citizens.

There’s an important counterargument to that point of view. To his detractors, Prince Mohammed’s embrace of global platforms and attempts to establish a foothold in the sports markets of the United States and Europe amount to nothing more than “sportswashing,” the tactic of using the popularity of sports and other forms of entertainment to whitewash the image of his regime and erase any negative publicity surrounding its many alleged atrocities.

A U.S. intelligence report concluded Prince Mohammed likely approved the killing of journalist Jamal Khashoggi in 2018, adding to a slew of other serious reports criticising Saudi Arabia’s human rights record, such as allegations of migrant worker abuse and exploitation, gender inequality, and severe restrictions on freedom of expression.

Here’s when the presumption of an NFL career comes into play. Some may say that an NFL franchise is the most effective sportswashing machine in the United States. This has led many to speculate that the NFL may be on Saudi Arabia’s shopping list for an American sports franchise in the near future.

A league official once said, “If you wanted to say you’re involved in Americana, there’s no better way than the NFL.”

However, there is no evidence the Saudis have genuine interest in the NFL outside the NFL’s monopoly on American sports and entertainment. When compared to other leagues, this is not the norm.

The Saudi sports minister, Prince Abdulaziz bin Turki Al Saud, reportedly met with league officials from the National Basketball Association, Major League Baseball, Major League Soccer, and the World Soccer League in 2019.

The National Football League was ignored. Since then, there has been no evidence that NFL representatives have met with Saudis to discuss furthering a sports-related agenda.

League executives have their own speculations as to the cause of this phenomenon.

Here’s why the NFL and the Saudis might not be a good fit. One of them said, “We don’t work out.”
It’s not like the Premier League, where all you need is a deeper barrel than the competition to win.

The pay limitation restricts the most valuable asset, which is the skill of the players. If you can’t afford to outspend your rivals by two or three times in free agency, then the money is wasted.
Facilities, coaching, and technology would all benefit from the presence of a sovereign wealth fund. Perhaps a trip, though at this moment I can’t think of anything better than a team jet. Probably two team planes.

I’m not saying that doesn’t matter, but with a wage cap in place, it’s impossible to pay significantly more than the average team for its players.

If you have enough money to sign every player to a fully guaranteed contract, which would give you an advantage in free agency, but then you had to let someone go, what good is all that money? Their entire sum of guaranteed funds is now resting on your hat.

The team president continued, “When it comes to a mutually agreed upon salary cap, revenue sharing, etc., the NFL stands as arguably the most equal league.” That’s not often where sovereign wealth funds invest.

Similarly, the Middle East is not a football home. So, why should they care about it at home? If I were them, I’d buy football and bring it to the Middle East rather than go and get Karim Benzema and Ronaldo. since football is a national sport in my country.

You can play basketball, so that makes sense too. Golf, that’s what they do there. There better be some cultural overlap if you’re going to spend the type of money you’re talking about.

It’s also important to note that the NBA has become a household name in Saudi Arabia because to the widespread promotion of basketball there. With the exception of the luxury tax, NBA teams are free to spend as much money as they want above the salary cap. It’s expensive, but it’s ideal for the Saudis’ ‘no cap’ football leagues.

And let’s not forget that the NBA allowed foreign funds to own a 20% share in teams, which might pave the way for a sovereign wealth fund to own an NBA franchise outright in the future.

When you put it all together, the Saudis and the American sports stages don’t sound like the most appealing places to be. However, the fact that the NFL has never really considered altering its own franchise purchase regulations remains the biggest obstacle of all.

There has been no indication that the NFL is interested in having participation from international private equity firms. Despite the franchises’ price increases, the number of domestic investors with sufficient cash on hand has not expanded. Similarly, the Middle East is not a football home. What, then, is the domestic benefit for [Saudi Arabia]?
CEO of an NFL franchise. The NFL, however, is currently attempting an alternative solution, as evidenced by the Commanders’ sale.

The league has never before structured a team sale in a way that allows a larger and more dispersed group of buyers to acquire the Commanders and also fund more of the debt associated with the purchase.

And if all goes as planned, it will reduce the need for uber-wealthy investors who can pay cash for the bulk of their acquisition.

If you have a larger pool of possible customers, you won’t have to settle for subpar choices as often, according to one business leader.

I don’t think changing the rules to allow wealth funds is necessary if you can do it the way it has been done for decades with a clear-cut primary owner who can afford to buy the majority of the franchise and also add in the option of considering larger diversified groups who can finance more of the deal.

You might modify them to include wealthy non-U.S. citizens as potential buyers, but continue to bar sovereign wealth funds.

The head of the team speculated that many other owners would welcome Carlos Slim’s participation in the league. Rules favouring collective ownership are likely to limit sovereign wealth funds in the long run. The NFL seems to prefer heavy debt loads on teams to ownership by sovereign wealth funds.

Here’s how Saudi Arabia may get an NFL franchise: What would happen then if Saudi Arabia wanted to join the NFL but didn’t have enough support to secure a rule change to make it possible?

At that point, things would take an exciting turn. The Saudis have the investment cash necessary to achieve what others have not: establish a rival league and begin chipping away at the NFL’s talent pool by paying exorbitant salaries to steal players and rigging draughts.

The degree of difficulty in accomplishing this varies widely across experts. One executive estimated that maintaining a rival league would cost somewhere between $7 billion and $10 billion per year, and that was with only eight teams.

That’s a huge premium compared to what it costs the NFL to run eight teams, but the executive promised it would be spent on compensation so high that the league would lose its biggest talents and the top draught picks.

The executive team had some differences of opinion on how much it would cost and what steps would be necessary. One person said that all that would be needed would be to wait for the USFL or XFL to fail before swooping in to use their existing infrastructure.

The executive then proposed overlapping the season with the NFL’s fall schedule and then aggressively poaching coaching and player talent over a span of several years.

A second person proposed a similar course of action, suggesting a “buyout” of high-caliber players over numerous draughts, with special attention paid to the top quarterbacks.
The consensus was that the only way to damage the NFL’s talent pool and steal away some of the NFL’s television viewership was to spend enough money over a long enough period of time.

Until you either disrupt your primary competition or turn a financial corner as a company, you will be running at a loss and experiencing a huge cash burn, as one executive put it.

The NFL is forced into an uncharted territory reminiscent of the PGA-LIV scenario. Instead of merely providing a runway for a sovereign wealth fund to purchase a single franchise, such a method would likely be geared at consolidating all of the competing teams into the league.

The team president responded, “It depends on what your point is.” If you’re willing to lose $50 billion, then by all means pay $7 to $10 billion a year for five years to get the NFL to the table.

What exactly are you hoping to accomplish? To go out and invest in the NFL? If you’re going to spend a s*** tonne, you might as well just go acquire a team and attempt to make that as useful as possible instead of burning through all that cash. “Hey, Woody Johnson, I’ll give you $25 billion for your team.”

Another top executive chimed in: “A productive straw poll is what kind of support exists if a sovereign wealth fund attempts to smash the greatest offer on the table.

If the Denver Broncos or the San Diego Commanders had received an offer that was, say, 50 percent higher than the best offer on the table, how would that have affected the attitude during the most recent two sales? Imagine an offer was increased by 100%.

I imagine the Bowlen family and Dan Snyder would have fought harder with an additional $3 to $6 billion in premium.

They would have looked for loopholes to accept the deal. It’s also possible that other property owners would have given their blessing. Ask all the owners if they would be willing to sell for $9 billion and see who bites. There could be more people who volunteer than you expect.

The league won’t be addressing this issue anytime soon. There is no immediate need for drastic action. No other league has taken inspiration from the LIV and caused as much unforeseen damage.

Still, that’s the case today as well. There’s no predicting what the future holds for the National Football League or its franchise owners.

A new league commissioner is anticipated in five years. A new collective bargaining agreement will be necessary in seven years. It’s impossible to say what might occur throughout that time frame.

The idea of the NFL partnering with the gambling sector or even considering Las Vegas for a franchise until the past seven years.

The NFL now has at least seven authorised sportsbooks, including the new Las Vegas Raiders. Never say never in punctuation, unless when referring to investments made with sovereign wealth. Can it be most likely never?

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