Saudi Arabia Introduces New Opportunities in Sports and Athletics
The sports and recreation industry in Saudi Arabia is opening significant investment opportunities as the Saudi Government aims to promote physical and social well-being and a healthy lifestyle, encourage widespread and regular participation in sports and athletic activities, diversify the economy and boost the sector’s contribution to GDP.
Saudi Arabia made sports a priority in 2016, as part of H.R.H. Crown Prince Mohammed bin Salman’s Vision 2030 economic development program. Since then Saudi Arabia’s sports sector has undergone an overhaul, driven by three main objectives: achieve 40 percent participation rate by 2030 by inspiring the community to engage in sports; develop Saudi elite athletes’ performance at international competitions; and grow and empower the sports economy.
To meet these goals, the Saudi Government has allocated $1.8 billion worth of investments within the sports industry in the next 5 years. The industry has also received significant financial support to allow a sustainable framework to help community sport flourish. Under a strategy announced in 2019, 170 clubs in the Kingdom are benefitting from direct financial support as well as performance-based support worth $650 million.
Furthermore, in 2019 Saudi Arabia witnessed a multitude of new established federations, spreading awareness around more than 50 various sports. As a result of these new engagement opportunities, mass participation and activity levels increased 23 percent, up 13 percent from 2015. There has also been a significant increase in the amateur-level practice of sports such as motorsport, mixed martial arts, boxing, and tennis, among others. Additionally, the number of internationally-recognized events in Saudi Arabia doubled from 9 in 2018 to 19 in 2019. Events held included Saudi Pro-Golf Championship, WWE Super Showdown, Formula E, E-Prix, Battle of the Champions (BMX & skateboarding), Saudi International Meeting for Disabilities Sport, and International Handball Federation Super Globe.
While sporting events planned for 2020 have been globally disrupted by the COVID-19 pandemic, Saudi Arabia has, in two short years, established a proven track record of hosting global sporting events, and building strong relationships with global sporting bodies in the process. Moreover, large-scale, internationally-recognized events present lucrative partnership and sponsorship opportunities.
The General Sports Authority of Saudi Arabia is undertaking the construction of a new Olympic village in the Kingdom’s capital of Riyadh. The $100 million project includes the construction of indoor/outdoor playgrounds, gymnasiums, fitness center, training field and track, racquet games hall, swimming pools, as well as sports performance services consisting of rehabilitation, hospitalization, physiotherapy, strength and fitness, nutrition, education and others. The project is set to be completed by December 2024.
NEOM, Saudi Arabia’s futuristic city, plans to be the most physically active city globally. Placing sport at the heart of the city’s lifestyle. Jan Paterson, NEOM’s Managing Director of Sport noted “NEOM is uniquely placed to create an unrivalled sport and physical recreation ecosystem. Whether that is attracting global events for visitors and inhabitants, creating the best spectator experience worldwide in our hyperflexible, sustainable sport assets or ensuring that there is a physical activity opportunity available to all, NEOM will be a global hub for sport, uniting its communities, shaping its lifestyle and contributing to its innovative economy.”
Having already hosted international competitions in 2019, NEOM looks to welcome athletes from four new sports in 2020 for a series of events in their beach games. Working closely with the national sport federations and the Ministry of Sport, NEOM aims to develop its strategy in support of the Ministry’s vision.
The acceleration of human progress underpins NEOM’s vision, and sport innovation is critical to that. One of the fastest growing sport industries worldwide is esports, and NEOM has signed a partnership with SAFEIS, the Saudi Arabian Federation for Electronic and Intellectual Sports, building on their aim of being the regional esports hub.
One of the first opportunities NEOM will get off the ground is an adventure sports hub, offering visitors and NEOMians experiences such as scuba diving, rock climbing, kite surfing and abseiling. Adventure sports are currently an under-served sporting segment in Saudi Arabia, but Paterson believes that by maximizing NEOM’s outstanding natural assets it will establish NEOM as a global destination for adventure sports.
There are a variety of sport investment opportunities in NEOM, and in March NEOM announced a long-term partnership with Mercedes-Benz EQ Formula E Team, spanning multiple seasons. The partnership oﬀers exciting opportunities for talented young racers and further education of selected individuals in Saudi Arabia. Speciﬁcally, certain Saudi nationals will be chosen to qualify as engineers and software developers by working closely with the racing team. NEOM will also be a founding partner of the Mercedes-Benz EQ FE Driver Development Program, starting in 2021, which aims to recruit young drivers and train them to compete in Formula E within the next few years.
Opportunities also exist in Qiddiya, Saudi Arabia’s multibillion dollar, giga-project dedicated to entertainment, sports, and the arts. This vast resort will be built on an 8,400 acre site, 2.5 times the size of Disney World, and will include theme parks, stadia (cloud gaming), motor sports, training facilities, academies, cultural venues, education centers, and much more.
Qiddiya Investment Company (QIC), the developer of Saudi Arabia’s entertainment mega-city, is planning to construct the sports complex within Qiddiya’s entertainment city in the capital of Riyadh. The $300 million project involves the construction of a gymnasium, an indoor arena, an athletic arena, associated infrastructures, and the development of an events arena. The project will comprise over 300 activities, including grassroots sports, water activities, winter activities, and safaris. Additionally, Qiddiya has built an FIA Grade 1 standard racing circuit with the expectation of hosting a Formula One race or MotoGP race, possibly as early as 2023. Through sports and wellness facilities and activities, Qiddiya aims to enhance the population’s well-being and develop future generations of Saudi national athletes and sports stars, with a goal to train the athletes who will represent the Kingdom in future Olympics and Paralympics.
In October 2019, QIC signed a MoU with Samsung establishing Samsung as Qiddiya’s primary technology sponsor, and for collaboration in the design, engineering, and construction of Qiddiya’s upcoming sports complex, with phase one expected to open in 2023.
For investors, creators, and developers, Qiddiya is an unprecedented first-mover opportunity. With few local entertainment offerings and two-thirds of the population of 35 million under 35 years old, Saudi Arabia presents a powerful, untapped market for entertainment, culture and sports activities. Qiddiya is also seeking strategic partnerships with the world’s top experts in the world of sports development for input and guidance for this transformative venture that will contribute to the discovery and development of the talents and skills of the Saudi youth, while motivating them to achieve excellence at local, regional, and international levels.
The Kingdom has already begun working with the private sector to commence its program of sports investments, which are not only economically and industrially oriented, but also socio-cultural, political, and health-related.
Saudi Arabia is quickly making its mark on the global community through its contributions to the expansion of international sports and the development of its own sports infrastructure. It aims to increase its momentum in developing facilities, athletes, leaders, and administrators by enabling its own federations to create more opportunities and through international partnerships. The Kingdom has also been working on facilitating business in the sports sector by establishing the framework, regulations, and the legal pathway for a business to enter the market.
Information for the report was obtained from the USSBC database, The Ministry of Investment of Saudi Arabia, MEED, and other industry publications.