Golf

Saudi Arabia Public Investment Fund Announces Budget Tightening

Saudi Arabia Public Investment Fund (PIF), the financial force behind LIV Golf has announced plans to reduce its spending. Over the past decade, PIF has invested billions in global initiatives particularly in sports but has faced criticism for accusations of sportswashing. Critics argue that these investments are attempts to improve Saudi Arabia’s international image in light of ongoing human rights concerns.

There are ongoing debates about how effective this strategy is in improving Saudi Arabia’s reputation. However, the country has undeniably established itself as a significant player in the sports industry. The PIF has spent around $400 million to acquire an 80 percent stake in Newcastle United and has also invested heavily in LIV Golf. Since its launch in 2022, LIV Golf has successfully attracted many high-profile players from the PGA Tour.

Notably, two-time major champion Jon Rahm signed a deal worth approximately $585 million with LIV Golf last year. Each LIV event boasts a remarkable $25 million purse, yet these amounts are a fraction of PIF’s nearly £1 trillion in assets. Recently, PIF governor Yasir Al-Rumayyan, who also chairs Newcastle United revealed intentions to tighten the budget and shift focus toward domestic investments.

At the Future Investment Initiative conference in Riyadh, he stated that PIF’s global spending had increased significantly. It rose from 2 percent to 30 percent in recent years. He aims to reduce it to between 18 and 20 percent, highlighting the need to strengthen the domestic economy. Although PIF plans to cut back on sports investments, its influence will persist.

Even with a one-third reduction in spending, significant funds will still be available. LIV Golf has already made a strong impact in the professional golf scene. Ongoing discussions about a potential agreement with the PGA Tour may allow for freer player movement between the competing tours.

The Saudi Arabia Public Investment Fund (PIF) goes beyond golf having secured a 10-year contract with Formula 1 for races in Jeddah. They also plan to host the Women’s Tennis Association’s season-ending finals in Riyadh. Additionally, they aim to secure the 2034 FIFA World Cup.

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