As superstars Ronaldo, Benzema, and Neymar moved from Europe to Saudi Arabia over the last twelve months, the Kingdom is going on the offensive – and Inter Milan could benefit from this.
The big spending behind the Saudi Pro League aims to raise it to being among the world’s top 10 leagues. The Saudi Sovereign Wealth Fund – PIF backs the league financially.
The fund is the the 7th largest in the world with US $776 billion under management. Since 2021, the kingdom invested at least US$ 6.3 billion in sport as part of its effort to diversify its economy away from oil promoting tourism, sports, and entertainment.
Approximately US$ 2.8 billion went to football to acquire players, coaches, and upgrade stadium infrastructures.
The Strategy Is Changing
Under the leadership of Crown Prince Mohammed bin Salman, or MBS, Saudi launched the Sports Clubs Investment and Privatization Project.
This led to the PIF acquisition of 75 percent of the top four clubs. These were Al Hilal, Al Ittihad, Al Nassr, and Al Ahli. The privatization aims to improve the commercial performance of Saudi Arabia’s pro league. By bringing in broadcasting, sponsorship as well as Foreign Direct Investment (FDI).
Recently, MBS was asked if the sports investment strategy can qualify as sports-washing by Fox News. His answer was very revealing.
“Well, if sports washing is going to increase my GDP by way of 1%, I will continue doing sports washing. I don’t care. I’m aiming for another one and a half percent. Call it whatever you want. We’re going to get those 1.5%” he added.
Actually, MBS wants this number to hit 2-3 percent by 2026. And he will do whatever it takes to get there.
Vision 2030 & Partnership WithItaly
With the Crown Prince coming to power in 2017, the Kingdom transformed its business model and policies. The KSA anchored its future economic and social development into Vision 20230.
MBS is the champion of this vision, and he claims that KSA’s GDP has already achieve a compounded 66 percent growth since the launch of the strategy.
Vision 2030 has a strong anchor in the partnership with Italian businesses. This includes football teams as well as the Italian top flight, the Serie A. One of the top vision’s projects is NEOM the 1 US$ trillion-dollar smart city project.
NEOM relies on strong partnership with Italian businesses, including conglomerates such as ENI. This partnership was furthered during the September 2023 Italian-Saudi investment forum held in Milan, resulting in the signing of 21 strategic MOUs across green hydrogen, health, desalination, technology, transport and tourism.
What About Football?
In terms of football, the partnership between Italy and Saudi Arabia is strengthening. Saudi Arabia has already established itself as one of Serie A’s preferred locations for the Supercoppa Italiana (the Italian football super cup).
This agreement, signed in 2018, guaranteed the Kingdom’s tournament hosting rights for three out of the next five years.
Furthermore, at the end of August, Saudi announced hiring the Italian National Coach Roberto Mancini. In his new role, Mancini will be the head coach of the Saudi National team. His role is also to grow the national football sector as well as train young talents in Saudi.
This acquisition is a major “coup” as in early October Saudi presented its bid to host the FIFA World Cup in 2034. This bid is already backed by 70 countries.
The Saudi partnership with Serie A goes much further as the Kingdom brings its brands to Italy, establishes broadcasting partnership and seeks to invest in financial distressed teams.
For instance, in early October, AS Roma announced that Riyadh Season (a Saudi annual entertainment and sports festival) will be their new shirt sponsor. Roma will receive US$25 million over two years for this.
The sponsor agreement may be part of a negotiation to invest and/or acquire Roma altogether. Turki Alalshikh, Chairman of Saudi Arabia’s General Entertainment Authority has previously expressed interest to take over the team from the American owners.
Inter Milan Could Benefit From Growing Football Interest Of Saudi Arabia
Inter Milan is also greatly sought after in the Gulf Countries, particularly in Saudi Arabia. It’s no secret that Saudi leadership wanted to buy Inter Milan in 2021. A deal did not materialize due to the high price asked by the Chinese owners of Inter.
As Inter Milan continues to struggle financially, with over US$ 400 millions debt maturing in May 2024, there is additional pressure to sell the team.
Also, high interest rates burden the repayment of the bond. These could increase even further during the next 3 quarters. This may force the Zhang family to sell at a lower price than the US$ 1.3-1.5 billion sought.
More Italian clubs could be acquired by cash rich Saudi entities like PIF and Aramco in the future. Especially given how many Italian clubs are both severely indebted and strapped for cash. High interest rates add to this dire financial situation.
Saudis’ investments, partnership and sponsorship agreement will all have a wide-ranging positive impact on Italian football. And most importantly, it will provide much needed financial resources, improving the competitiveness of the clubs and the overall quality of Serie A and Serie B.
A Mutually Beneficial Partnership
I believe Saudi Arabia needs Italy as much Italy needs Saudi Arabia. The partnership between the two countries, will on the one hand catapult Saudi Arabia to the forefront of global football, and on the other help Italy regain its global football prestige.
By: Andrea Zanon
Andrea is Founder of Confidente and Empower Capital. With 25 years of entrepreneurship, operations, sustainability and technology experience, Andrea brings a hands-on approach to partnering with investors, corporate boards, management, to create accelerated returns, resilient investment, and market leadership.
Andrea Specializes in Resilience, Investment Promotion, and Women Entrepreneurship. He was the Risk Management Coordinator for the World Bank in the Middle East for 8 years.
Andrea continues to advise International Financial Institutions, and entrepreneurs on clean tech, sustainability, impact investments.
He is a Science of Foreign Policy Graduate from Georgetown University and has a bachelor’s degree in philosophy and Foreign Languages from Bologna University.