Sports have always had greater importance in the kingdom of Saudi Arabia since 1950 becoming an essential component to the cultural framework of the kingdom. The ambitious plan of Crown Prince Mohammed bin Salman to uplift the Saudi football league to the world’s top 10 showcases the kingdom’s commitment to sports. The Quality of Life Program launched by Saudi Government in May 2018 gives primary importance to Sports.
As a part of the program, a wide range of initiatives are been dedicated to encourage the participation, promoting the betterment of performance of Saudi athletes in global competitions, and supporting the growth of sports economy in the kingdom.
The programs is in line with the goal of Saudi Vision 2030 for building and aiming to place Saudi Arabia as a country as a prosperous country with a leading, diverse and flourishing economy.
Overview of the Saudi Sports Industry
Being aware of the fact that more than two third of the population are under 30, Saudi Arabia understands the role of addressing the largest group of demography. The Vision 2030 aims also at creating an active society through promotion of physical and social well-being. The sports sector with a worth $ 5.77 billion in 2022 is progressing and the business will aim at $22. 2 billion by 2030. Recent investments, exceeding $6. 3 billion since 2021, paint the picture of government’s interest in sport in general and in particular football, Formula 1, golf, winter sports, tennis among others.
The industry for sports events has a high growth rate, which is estimated to be at 8% per annum and is thus a vibrant and dynamic market. Today the sports sector contributes to around 0.2% to the Kingdom’s GDP, when the tourism as a sector gives around 3%, according to Ministry of Sports and Ministry of Tourism. Both ministries have ambitious growth targets. Sports sector are expected to contribute 0.6 % to the GDP and the tourism at a statistical projection of 10% by year 2030.
Important Initiatives to Boost Saudi Sports Sector
To support further development of sports industry, the Public Investment Fund of Saudi Arabia has created SRJ Sports Investments. As an investment company, this entity seeks to own and generate Intellectual property rights on sporting events, seek to commercialize sports events, and outright host some of the important sport events. The activities for fan engagement and a wide kind of technology transforming sports really fit into Vision 2030 mission of creating or achieving a vibrant society through a healthy lifestyle.
Efforts aimed at increasing the representation of women in sports and further development of sports infrastructure can be considered as revealing the kingdom’s concern for applying inclusiveness and further development of the sports sector. The formation of the ‘Sports Clubs Investments and Privatization Project’ was another development where four SPL clubs — Al-Ahli, Al-Ittihad, Al-Hilal and Al-Nassr came under the management of Saudi Arabia’s sovereign wealth fund, PIF( Public Investment Fund). This strategic maneuver not only shifted ownership but also ensured that the clubs receive a huge amount of funding from a sovereign wealth fund that is almost nearing almost 800 billion US dollars.
- Investments in the next five years in sports: US$2b (Two billions US dollars)
- Committed to support sports club in achieving privatization: US$670 million
- Private sector investment pledged through clubs sponsorship to 2023: 320 million US dollars
Leading Sporting Events in Saudi Arabia
In terms of advantages, hosting the sporting events creates a lot of benefits including the direct economic effect, the stimulation of interest in sports among the population, the possibilities for the development of tourism, entertainment, and the changes in the overall image of the country, as well as the increased pride and unity of Saudi nationals. All these events help add to the overall development of the Kingdom’s image and its aim of encouraging a healthy lifestyle as well as social and economic progress.
In the past few years, Saudi Arabia has stepped up to the plate in international sporting events like the Saudi Arabian Formula One GP race, Anthony Joshua v Ruiz II – the Clash on the Dunes, and the world’s richest horse race – the Saudi Cup. The bidding process for the staging of the FIFA World Cup 2030 is viewed as the Kingdom’s desire to demonstrate its facility in sports and to give the local sports tourism industry a huge promotion and this will greatly impact on the economy.
Saudi Arabia, and notably the Middle East have become a prominent center for sports and have gotten significantly popularity, specifically in (Mixed Martial Arts). Major sporting events prove not only the cultural depth of Saudi Arabia but also can be effectively used to attract the FDI (Foreign Direct investments) and enhance tourism in the country.
Esports in Saudi Arabia
It is worth to note that Saudi Arabia has been funding the development of esports given the global demand for the industry. The formation of Saudi Esports Federation and opening of the Gamer8 Festival are good examples of the Kingdom’s interest in this emerging field. This country’s Public Investment Fund has earmarked $37. 8 billion for esports and gaming leading to the further development of the industry in this field.
Forthcoming Sporting Activities in Saudi Arabia
Notably, The Kingdom of Saudi Arabia has embraced the need for the hosting of upcoming sports events. It improves on the global outlook of the nation and is also an economic booster through tourism as well as infrastructure growth
Sports Tourism in Saudi Arabia
Saudi Arabia has targeted how to improve on attracting the ‘sport tourists’- those who travel to the kingdom to watch sporting events or to engage in sports. The most easily distinguishing form of sports tourism is referred to as ‘spectator sports tourism’, which involves tourism during events such as Olympics, Asians, Asia Cup, World Cup, Formulation One, and the rest. The Saudi government actually paying attention to the sports tourism is evident by the hosting of events such as the World Boxing Super Series and the Diriyah E-Prix Formula E. All these events are good for the sporting industry and go a long way in adding to the kingdom’s overall economy.
The Kingdom also hosts International tennis tournaments and global golf tournaments and facilitates football matches of international standard. Saudi football team is one of the finest in Asia and has secured Asian Cup championship for three times. In 2020, the global sports travel market secured a value size of $323.4 billion. The $500 billion invested by the kingdom to create NEOM City with an aim to revolutionize the sports sector in Saudi Arabia by hosting futuristic sporting events will continuously strengthen the kingdom to emerge as a global sporting hub.
How Analytix can help you set up your Sports business in Saudi Arabia?
The Kingdom’s infrastructural and policy support for hosting big-bang sports events, developing sports tourism, and evolving new niches such as esports make it one of the most appealing destinations for setting up sports businesses. The projected size of the overall sports market at the end of 2024 amounts to more than $3 billion and there is place for both domestic and foreign investors within the framework of the private sector. While Saudi Arabia remains steadfast on the development of sport as one of its key growth sectors, there comes higher prospects and opportunities for you to enter the market and establish your sports business in Saudi Arabia.
Analytix is your on-ground partner to help you navigate the very dynamic and rapidly growing sports sector in Saudi Arabia. With a commitment to assisting businesses entering the Saudi market, we happen to be a leading business and management consultancy firm specializing in international business setup support in the Kingdom of Saudi Arabia. Our expert team will promptly handle your licensing process, offers services in compliance with local regulations and help you with the establishment, incorporation, expansion, or even growth of your Sports business in Saudi Arabia.
With years of experience and in-depth knowledge of local regulations and market dynamics, Analytix provides comprehensive services well beyond business incorporation. These services range from accounting and bookkeeping to tax and auditing, GRO, and PRO services, among many others. We are committed to making sure that you realize success in Sports business by ensuring you have the proper expertise and support to get there. Get in touch with Analytix now.
Conclusion
We’re glad you’re here!
Hopefully, you would have had a far better understanding of the Sports Sector in Saudi Arabia and the amazing business opportunities it holds. From determined efforts of the kingdom to hosts sporting events, supportive funding and infrastructural investment in sports sectors and a promising future as growing global sports hub, Saudi Arabia is indeed holding great business opportunities in the sporting industry.
If you feel we missed something, or if you mostly have questions, let us know in the comments.
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