The LIV-PGA merger exposes Saudi Arabia’s broader ambitions

But money talks. Last week came news of a truce and an alliance. The PGA Tour, its European counterpart and Saudi Arabia’s Public Investment Fund agreed to a merger that would place Saudi financing at the center of golf’s most prestigious tournaments. The parties dropped ongoing litigation for an arrangement that would create a new as-yet-unnamed company where the PGA Tour will have a majority stake, but the PIF will, at least initially, be its exclusive minority investor. It’s believed LIV Golf will quietly disappear after its current second season ends.

The deal still faces obstacles, including a skeptical Congress. On Monday, Sen. Richard Blumenthal (D-Conn.) sent a letter to both the PGA Tour and LIV Golf authorities saying the new arrangement “raises concerns about the Saudi government’s role in influencing this effort and the risks posed by a foreign government entity assuming control over a cherished American institution.” He pointed to the Saudi government’s “deeply disturbing human rights record at home and abroad” and its stated policy of using its sovereign wealth to pursue its “strategic” goals.

PGA Tour Commissioner Jay Monahan, however, said in a letter that he had to acquiesce to the Saudi-backed deal because of the closeness between Washington and Riyadh. “While we are grateful for the written declarations of support we received from certain [congressional] members, we were largely left on our own to fend off the attacks, ostensibly due to the United States’ complex geopolitical alliance with the Kingdom of Saudi Arabia,” Monahan wrote to U.S. senators. “This left the very real prospect of another decade of expensive and distracting litigation and the PGA Tour’s long-term existence under threat.”

Saudi Arabia routinely weathers accusations of “sportswashing” — that their investment in sporting projects like the PGA Tour as well as the purchase of soccer club Newcastle United in the English Premier League are PR exercises aimed at shifting the focus away from a checkered record of abuses at home and abroad. The kingdom’s de facto leader, Crown Prince Mohammed bin Salman, has styled himself as a youthful modernizer rapidly transforming his nation, even as he is seen by many elsewhere as a brutal figure, implicated in the hideous bombing campaigns in Yemen and the gruesome abduction and murder of Washington Post contributor Jamal Khashoggi.

Saudi officials contend that the PIF’s acquisitions and funding projects in sports are common-sense business decisions that also help boost domestic interest in the games. “Any sport that has consumers globally and domestically is a sport we’re interested in as an investment opportunity, to not only create commercial returns for the investors, whether it’s the PIF or private investors, but also as an upgrade to the quality of life of Saudi Arabia, it’s part of our tourism agenda,” Saudi Investment Minister Khalid Al-Falih told CNBC on Tuesday.

Away from golf, PIF has embarked on a dramatic spending spree in the world of soccer. That may have begun with the 2021 purchase of Newcastle United, which has since gone from a middling position in English football to near the top of the Premier League table. But in the past year, PIF has also set aside a huge war chest to pry some of soccer’s greatest — if aging — stars away from their more storied European clubs and bring them over to the four top teams in the Saudi league.

Portuguese superstar Cristiano Ronaldo joined Riyadh’s Al Nassr in the winter after the World Cup in Qatar. Last week, French striker Karim Benzema, who won the 2022 Ballon d’Or award for the sport’s top player, left Real Madrid for Al-Ittihad, based in the city of Jiddah. He’s alleged to be making more than $100 million a year on his new Saudi contract. And many others, like French World Cup winner N’Golo Kanté, are set to follow this summer.

A decade ago, China attempted a similar project. The central leadership in Beijing encouraged a host of state-backed and private companies that owned local soccer teams to woo star European and Latin American soccer players, leading to a mini-migration of talent to Chinese clubs. But the initiative petered out amid corruption scandals and the collapse of some of the major companies involved, while the massive sums spent did little to boost China’s image abroad or buttress the sport at home. The Chinese men’s national soccer team has failed in the past two decades to even qualify for the World Cup.

The Saudis are hoping for a happier dividend. Whatever Riyadh’s rhetoric, both the golf and soccer gambits are undoubtedly demonstrations of an aspirational soft power. Stars like Ronaldo and Benzema command personal fanbases in the hundreds of millions online, many of whom may now see Saudi Arabia as the unfathomable wealthy abode where their heroes ply their trade.

Kristian Ulrichsen, a fellow for the Middle East at Rice University’s Baker Institute for Public Policy in Houston, points to a clear “strategy to turn the conversation onto topics that Saudi Arabia is much more comfortable with” and away from the skulduggery and human rights abuses that briefly dominated chatter in Washington in the wake of Khashoggi’s killing. The Saudi investments in the PGA Tour, Ulrichsen told me, give it access to “an affluent audience across the United States,” and “may change people’s opinions about what Saudi Arabia is and what Saudi Arabia may be doing.”

Indeed, the Saudis can point to the significant transformation underway under the controversial crown prince, who has defanged the country’s once-notorious morality police and pushed through a series of liberalizing reforms — even as authorities continue to punish dissent and intimidate and imprison a host of civil society activists. As part of Saudi Arabia’s so-called Vision 2030, MBS, as he is commonly known, is using the kingdom’s near-bottomless pit of oil money to fund epic construction projects and rebrand Saudi Arabia as a future hub for global logistics and tourism.

“People are amazed at how much the country has changed,” Fahad Nazer, a spokesman for the Saudi Embassy in Washington, said in a recent interview with Arab News, describing the reactions of Western business and political delegations visiting the country. “It looks different, it feels different.”

But whatever one’s view of the change afoot, the kingdom’s massive investments deepen Riyadh’s influence abroad.

The splashy forays into sport are “part of an unprecedented investment in diverse sectors of the American economy, from gaming to entertainment to fashion to finance,” Sarah Leah Whitson, the executive director of Democracy for the Arab World Now, an advocacy group that Khashoggi helped found, told the New Yorker. “The list goes on and on. It’s partly about sportswashing, or artswashing, or entertainment washing, but it’s also a hedge to prevent a repeat of what happened after the murder of Jamal Khashoggi, when some American businesses started withdrawing from anything to do with Saudi Arabia. This infiltration is an effort to prevent U.S. businesses from ever doing that again.”