The Long Game: Saudi Arabia And Professional Golf – Analysis

Sean L. Yom

Source Link

(FPRI) — When the Saudi-backed LIV Golf Tour commenced in 2022, most observers dismissed the spectacle as sportswashing. Sportswashing refers to sponsorship by authoritarian regimes over major sporting teams and events in order to elevate their image. Last year, LIV fit the bill. It was financed to the tune of $2 billion by Saudi Arabia’s $700 billion sovereign wealth fund (the Public Investment Fund, or PIF), and created exhibition-style golfing events featuring players lured away from the PGA Tour by lucrative cash payouts. Against the LIV stood the PGA Tour, the $1.5 billion sanctioning body based in the United States that traditionally organizes competitions, signs sponsors, licenses media, and pays cash purses at events.

The PGA and LIV embarked upon an ugly feud fought out in the Western media and American courts. The battle ended recently with the shocking news that the two had agreed to instead merge their forces—alongside the smaller DP World Tour (formerly known as the PGA European Tour, now sponsored by the UAE’s state-owned DP World cargo and port company)—to “unify” the professional game under one organizational umbrella. Many Western observers have reacted with hostility. They frame the move as an upstart effort by Saudi Arabia to control global sporting by essentially buying outWestern golf to conceal its poor human rights record, one pockmarked by the fact that most of the 9/11 hijackers were Saudi nationals and the families of the victims from those terrorist attacks allege that those hijackers received Saudi government assistance. Congressional scrutiny has followed, as the merger raises antitrust issues. The Justice Department has also signaled it will investigate the deal, bringing forward the possibility that the merger may not happen after all.

Even if it falls through, however, the merger demands attention in how it has invoked political and strategic concerns that extend far beyond the game of golf. The PGA Tour-Saudi deal is not just sportswashing. The merger entails the Saudi government not buying the PGA Tour outright, but rather going into business with it by funding a new private enterprise to co-manage its commercial empire, of which the biggest components are corporate sponsorships, licensing deals, media rights, and digital assets. It also reflects an accelerating adaptation of the richest Gulf monarchies to the world’s changing geopolitical landscape. Saudi Arabia intends to draw considerable long-term profit from this business relationship, in line with its broader strategy—shared with Qatar and the United Arab Emirates—of carving out permanent spots at the global cultural table. Gone are the days when unfamiliar foreigners, when asked about these kingdoms, would conjure up Orientalist images of camel-riding tribal sheikhs splurging newfound black gold on garish Beverly Hills mansions. The agreement between the PGA Tour and the Saudi Public Investment Fund instead shows the Saudis as something else: savvy businesspersons using their oil wealth to create new financial and political opportunities, even if this rankles Western audiences.

Sportswashing is hardly new. The Olympic Games have sometimes graced unsavory autocracies eager to hide their heinous domestic political practices (think Germany in 1936 or China in 2008). Over the past decade, the leading Gulf kingdoms have kicked their sportswashing campaigns into overdrive. The trend took off after the 2011–2012 Arab Spring, when these regimes were eager to rebrand themselves from what they were—illiberal ruling monarchies lucky to have survived that regional wave of revolutionary uprisings. Instead, they sought to remake themselves as international sites of progressive, cosmopolitan knowledge. They craved cultural legitimacy, or in marketing terms “brand equity” that could anoint cities like Jeddah, Dubai, Abu Dhabi, and Doha as global centerpieces of education, tourism, and investment. This occurred during the 2010s despite regional affairs deteriorating. Saudi Arabia and the UAE orchestrated a humanitarian disaster with their Yemeni intervention; crackdowns on opposition proliferated in Bahrain and Saudi Arabia; and Qatari abuses of migrant workers building the 2022 World Cup stadiums became too grotesque to hide.

Still, such nation-branding efforts, also known as “soft power” projection, yielded considerable fruit. For instance, elite Western universities created branch campuses in Qatar and the UAE, and the latter has hosted the French Louvre since 2017. Above all, glamorous sporting events and music concerts began gracing these countries, as well as Saudi Arabia. The FIFA World Cup, F1 Racing, World Wrestling Entertainment, mixed-martial arts, championship boxing, Beyoncé, Paul McCartney, and Madonna—this is the lexicon of cultural globalization, and over the past decade the Arabian Peninsula has become part of it.

One successful result of such soft-power projection has been the close relationship between the Gulf and football. Qatar’s successful hosting of the 2022 World Cup triggered ferocious outcry among some Western observers, partly driven by discomfort over how such a tiny country with little footballing history could pursue its global ambitions by organizing a sporting event of this magnitude. Previously, however, Gulf royals had also purchased top-tier European football clubs, marking their entry into the highest levels of the sport’s global competition. The Emir of Qatar owns Paris Saint-Germain; Sheikh Mansour bin Zayed, son of Abu Dhabi’s ruler, owns Manchester City; and the Saudi PIF also owns Newcastle United. Gulf airlines like Emirates Airways are ubiquitous sponsors of prestigious clubs like Real Madrid. Finally, football fans know well that Saudi Arabia’s own football league has spent billions to tempt stars like Cristiano Ronaldo, Karim Benzema, and Lionel Messi (although the latter is now heading to Florida, to play his twilight years for David Beckham’s Inter Miami club).

It is tempting to see the PGA Tour-Saudi deal as the latest iteration of sportswashing. But the deal concerns far more than Saudi financiers snapping up yet another expensive Western sporting asset. If the merger passes US government review, then the PIF – and by extension, the Saudi government under Crown Prince Muhammad bin Salman, who both chairs the PIF and will serve as the next Saudi king—will help direct a new private firm (thus far called “Newco”) in charge of these golf tours’ combined business. While the implications of the merger are still emerging, the end result promises to bridge two different worlds. The PGA Tour will remain the historical face of professional golf, but the financial muscle needed for its day-to-day commerce will come from the PIF, which alongside the PGA Tour will operate Newco.

The upshot will be unprecedented in the typically staid world of golfing. Every monetizable implication of the PGA Tour’s gargantuan operations, from signing media deals and licensing video games to drawing tournament revenues and running players clubs, will generate profit for the two entities in charge of Newco—the PGA Tour and the PIF. The Saudis are not buying a golf tour, or even a golfer; they are capitalizing the game into a new commercial form.

Much of this novel strategy turns on the fractious nature of golf itself. For one, the PGA Tour is technically a tax-exempt non-profit enterprise based in Florida. Moreover, there are no teams to buy. Professional golfers are independent contractors, and the game itself has long been the elite preserve of mostly white men belonging to upper-class Western institutions. For another, the PGA Tour carries hallowed status among golf fans. While the four major tournaments—the Open Championship (or British Open), US Open, PGA Championship, and the Masters—are technically independent, and smaller regional outfits like the European DP Tour and the Asian Tour regulate their respective domains, the PGA Tour packs the biggest punch in terms of cachet and credibility for aspiring golfers, tournament organizers, and corporate patrons. All the global golf icons familiar to non-golfing fans, from Tiger Woods to Jack Nicklaus, are tied to the PGA Tour. By contrast, despite its superstar lineup, the LIV Tour failed to draw much mainstream attention. Its television ratings were dismal, and the only US broadcast network to air its events was CW, better known for its teen-themed superhero shows like Superman & Lois.

Still, the PGA Tour saw the LIV as a brazen Saudi-funded affront to its monopoly last year. Not only did some celebrated golfers like Phil Mickelson surrender their PGA Tour membership in favor of LIV thanks to astronomical signing bonuses, but both the PGA and LIV waged costly lawsuits against one another in federal courts. In the end, Saudi money won. The PGA Tour admitted that the cost of its litigation, plus ever-rising cash payouts designed to prevent more players from defecting to LIV, was the final straw: it simply could not defeat “a foreign government with unlimited funds.” That congressional review now appears imminent is also ironic given PGA Tour commissioner Jay Monahan’s complaint that the PGA Tour received little US government support last year amidst its anti-LIV lawsuits and mounting operational costs, ostensibly due to Washington’s “complex geopolitical alliance” with Riyadh.

For Saudi Arabia, the move marks a remarkable victory. In business terms, the PIF was hemorrhaging funds to underwrite its laughingstock golf tour. Making long-term profit was more important than beating the PGA Tour into submission, and now it will have a hand in guiding the business side of the game. In geopolitical terms, the venture reflects the Gulf’s positioning amidst the new realities of a multipolar world. Muhammad bin Salman, much like his counterparts in Qatar and the UAE, understands that US hegemony is waning. The military backbone of the American alliance with these kingdoms remains solid: Washington still maintains a massive infrastructure of bases across the Gulf littoral, and most of these Gulf kingdoms’ most advanced weaponry still originates from American firms. Yet America’s fading appetite for war, particularly with Iran, has convinced Gulf rulers that their foreign policies must be far more flexible in engaging a multipolar world where Chinese interests, Russian security, and global energy markets matter more than American opinions.

The signs of such flexibility have been apparent for years. For instance, the Gulf kingdoms have repeatedly rebuffed US pressures to ramp up oil production, while Saudi Arabia astonished many last March when it agreed to restore diplomatic relations with Iran through Chinese mediation. The UAE’s efforts to normalize ties with Israel and also de-escalate tensions with Iran show a similarly pragmatic desire to stamp its own influence upon regional affairs, while exploring greater engagement with China as well. Such moves are not merely affronts to the Biden administration so much as outcomes of new Gulf foreign policymaking, one that is far more confident and adaptable than before. In step with ongoing nation-branding efforts, Saudi Arabia and its Gulf peers do not merely desire prestige; they want permanence. They are making their kingdoms central to global discussions about sporting, tourism, trade, and education—not by building vast militaries, but through increasingly savvy cultural and financial forays far beyond their borders.

Much as the Gulf kingdoms have pivoted to embrace these new opportunities, Western audiences must also adapt. Such strategic responses, however, are still being calibrated given the novelty of this new reality. Western critics of sportswashing likewise need a stronger argument than human rights when evaluating partnerships between foreign autocracies and Western sporting leagues. The NBA, for instance, does $5 billion in business in China, which has become its second biggest market after North America. Because much professional sporting based in the West flourishes through competitive markets, there is little that can be done when Gulf financing enters the domestic picture through legal investment channels. The Saudi PIF’s takeover of Newcastle United in 2021, for instance, unfolded despite tenacious resistance from many club fans. Western governments cannot outright block such involvement, unless the funding appears tied to a foreign government under sanction (which explains why English football club Chelsea’s Russian ownership sold the team in 2022).

In the case of the PGA Tour, the threat of US government review is anchored upon the possibility that the business structure of the proposed merged golfing entity may breach American antitrust laws, not because the source of funding is Saudi. However this deal pans out, one thing is clear: Gulf financing has irrevocably become an important new player in Western sporting, and it will have lasting influence.

The views expressed in this article are those of the author alone and do not necessarily reflect the position of the Foreign Policy Research Institute, a non-partisan organization that seeks to publish well-argued, policy-oriented articles on American foreign policy and national security priorities.

*About the author: Sean L. Yom, a Senior Fellow in the Foreign Policy Research Institute’s Program on the Middle East, is Associate Professor of Political Science at Temple University.