Saudi Arabia: Competition On And Off The Field: Shaping The Future Of Professional Sports In The Middle East

PIF's move has ignited a new era in Middle East sports, setting the stage for either a clash between markets or an unprecedented opportunity for cooperation across the divide.

As these clubs navigate their newfound place on the global stage, mechanisms and guidelines that are specific to football (or soccer, as it's referred to in North America) have been crucial to maintaining a competitive balance between ensuring fair play and competitiveness. To understand how this balance is being achieved, it's important to understand the legal and regulatory challenges within this new reality.

To provide a better understanding of the Middle East sports market, it is helpful to look at the juxtaposition between the two largest sports markets in the region – Qatar and Saudi Arabia – and their respective visions and strategic directions.

Maintaining competitive balance and SPL mechanisms for fair play

The PIF has taken steps to ensure that each club operates independently, appointing separate management teams for each club. Clear and transparent rules for resource allocation amongst the clubs, equal investment and the assurance of independent decision-making underline the commitment to fairness. These measures aim to prevent any one club from gaining an undue advantage in an effort to foster healthy competition within the Saudi Professional League (SPL).

In the context of the SPL, several mechanisms are already in place to ensure fair play and simultaneous competitiveness. These include adherence to Financial Fair Play (FFP) regulations, salary caps, transfer fee limits, foreign player quotas and parachute payments for relegated clubs. General guidelines emphasizing transparency, conflict of interest prevention and a league compliance office further contribute to maintaining a level playing field.

Beyond the SPL, there has recently been discussion around the SPL wishing to compete in the UEFA Champion's League. Maintaining a balance and ensuring fair play will become all the more challenging and critical, particularly in an era of multi-club ownership.

Navigating emerging legal landscapes

Key players in the global sports space, beyond football, are navigating such evolving legal landscapes in real time as we have seen in the quickly evolving relationship between LIV Golf and the PGA. This relationship, and the associated litigation between the parties, serves as a prototype for potential interventions and regulations in the sports world.

Traditional sports leagues worldwide, including established leagues in North America, may face challenges from new ventures. This is of particular relevance where traditionally North American sports gain popularity around the world including basketball, (North American) football and even baseball. Legacy leagues such as the NBA, NFL and MLB have a vested interest in maintaining the status quo. There are obvious concerns about losing revenue, viewership and prestige to new leagues backed by wealthy individuals.

As an example, LIV, if successful, could encourage other investors to try to start rival leagues in other sports, which could lead to fragmentation of the sports landscape, making it even more difficult for traditional sports leagues to maintain their global dominance.

This evolving legal landscape poses a significant dilemma for traditional leagues, including in the context of the Middle East where investors may seek to start rival leagues due to market appetite and alignment with national growth strategies.

In navigating these new landscapes, leagues in the Middle East will want to proactively introduce clear and transparent rules and regulations to minimize the risk of disputes from legacy leagues. Defending their interests in court and collaborating with governments to promote fair and competitive markets will be pivotal in navigating the fast-changing sports landscape worldwide. There may simultaneously be unprecedented opportunities for alignment and cooperation across markets with a "win-win" scenario in which legacy sports meet new investors, leading to growth, expansion and change (read as innovation), catering to a more global palette.

Qatar vs. Saudi Arabia: Contrasts and convergences

With a view to understanding the Middle East sports market, it is helpful to examine two of the largest sports markets in the region. Looking at Qatar's and Saudi Arabia's sports ventures reveals shared objectives and distinctions.

Qatar envisions itself as a global sports hub, hosting major events while promoting its culture and values, whilst Saudi Arabia aims to be a major player in the global sports industry, utilizing sports to enhance its image and invest in domestic sport infrastructure. Shared objectives showcase the commonalities across the region's borders and the expanded playing field within which opportunities currently exist:

• Heavy investments in sports to improve international standing and attract tourism and investment.
• Aspiring to become major players in the global sports industry.
• Utilizing sports to achieve broader national strategic objectives, aligning with Qatar National Vision 2030 and Saudi Vision 2030.

Conclusion

The Middle East's evolving sports landscape, characterized by significant investments and strategic maneuvers, sets the stage for a new era in football and beyond. As the Middle East vies for global supremacy, navigating legal complexities and ensuring fair play become imperative for regional and non-regional players alike in the global sports space. Within this divide exists scope for further fragmentation and disputes but simultaneously provides opportunities for cooperation and mutual growth.

As evidenced by Qatar and Saudi Arabia, strategic ambitions are being realized in real time, setting the stage for the broader regional market to be on the global stage for the foreseeable future. How the traditional sports world navigates within this region may determine the trajectory of international sport in our generation.