Saudi Arabia's PGA merger is likely just the beginning when it comes to pro sports

The arguable mega merger betwixt the PGA Tour and Saudi Arabia's LIV Golf is conscionable 1 measurement successful the kingdom's ambitious tourism and concern strategy — and its pursuit of big-name sports is conscionable getting started.

"We're benignant of a proponent to find 'all of the above' strategy successful sport," Saudi Investment Minister Khalid Al-Falih told CNBC's Dan Murphy successful Riyadh.

"Any athletics that has consumers globally and domestically is simply a athletics we're funny successful arsenic an concern opportunity, to not lone make commercialized returns for the investors, whether it's the PIF oregon backstage investors, but besides arsenic an upgrade to the prime of beingness of Saudi Arabia, it's portion of our tourism agenda."

The PIF is Saudi Arabia's Public Investment Fund, a $600 cardinal sovereign wealthiness money controlled by Saudi Crown Prince Mohammed bin Salman. It's being wielded arsenic an economical instrumentality for Vision 2030, a years-long task aiming astatine modernizing and diversifying the kingdom's system distant from oil.

News that the PGA Tour and Saudi Arabia's LIV Golf were joining forces past week brought an extremity to a two-year conflict betwixt the archrivals.

The agreement, which includes the DP World Tour — besides known arsenic the PGA European Tour — will combine the commercialized businesses and rights of the PGA Tour and LIV Golf into a new, yet-to-be-named for-profit company. 

Founded successful 2021 with the extremity of becoming the world's premier nonrecreational play tour, LIV Golf was backed by the PIF and had lured immoderate of the biggest play stars distant from the PGA Tour with immense paychecks. That spurred lawsuits betwixt the 2 entities until the determination to merge, which ended each pending litigation.

"The portion is much than susceptible of being portion of this planetary phenomenon, caller improvement of the emergence successful sports arsenic portion of the planetary economy," Al-Falih said of the Middle East. "And play is portion of it, is simply a important portion of it, and it addresses an important conception of the colonisation who besides play and travel golf."

As portion of the PGA-LIV merger, the Saudi PIF is present the exclusive capitalist successful the caller play entity, and it has the close of archetypal refusal connected immoderate caller investment.

The PIF is rapidly expanding into sports, hosting a Formula One Grand Prix and large boxing matches, and buying British Premier League shot squad Newcastle United.

Saudi Arabia also lured shot legends Cristiano Ronaldo and Karim Benzema with contracts worthy hundreds of millions of dollars to play successful section Saudi leagues, and it's expected to bid to big the 2030 World Cup.

In the past fewer years, the mammoth PIF money has also bought up stakes successful large bluish spot companies including Amazon, Uber, Alphabet, Microsoft, Boeing, Bank of America, Disney and Meta.

Al-Falih noted the powerfulness of sports to pull tourism, but besides to connection thing charismatic to Saudis already successful the country.

"Sport is simply a important constituent of planetary economy, consumption, media, integer content, which is present successful our hands and laptops and thing that arsenic individuals, arsenic households, arsenic corporates, it's portion of," helium said. "And of course, arsenic a curate of investment, I invited it arsenic an accidental for america to make much -- Formula E, Formula One, boxing matches, shot matches."

"It's portion of retaining our Saudi citizens, planetary residents who take Saudi Arabia arsenic their home, to enactment successful Saudi Arabia and to devour this merchandise that is of precocious demand," the curate added, "and besides to bring planetary followers of athletics to the kingdom for the assorted activities and sports that volition beryllium taking spot here."

Numerous quality rights groups and lawmakers successful different parts of the satellite knock Saudi Arabia's fiscal engagement successful the sports satellite arsenic "sportswashing," oregon an effort to cleanse its representation of quality rights abuses.

Saudi Arabia has long been criticized for its quality rights record, which includes the imprisonment and execution of governmental dissidents, harsh penalties including decease for members of the LGBT community, and the high-profile sidesplitting of U.S.-based writer Jamal Khashoggi in 2018 by Saudi agents.

CNBC has contacted the Saudi Foreign Ministry for comment.

The kingdom's assertive run to beforehand its representation arsenic a reformed, socially liberalizing state is simply a cardinal portion of the crown prince's Vision 2030. It includes expanded freedoms for women — though galore pistillate activists inactive stay down bars — and allowing antecedently banned things similar movie theaters and concerts.

Seventy percent of the Saudi colonisation is nether the property of 35, and the kingdom's younker are highly digitally progressive and connected, creating an tremendous marketplace for televised sports and sporting events.

"We person 1 of the highest consumptions per capita of galore sporting activities and ... physics sports and integer games," the Al-Falih said. "Having these activities being created successful Saudi Arabia, with ownership from Saudi entities similar the PIF is going to nonstop that request successful affirmative ways and it's going to make commercialized returns. I deliberation it's going to summation the travel of concern by Saudi investors and, similar I said, that volition amended the prime of beingness and marque Saudi Arabia a much charismatic spot for planetary visitors to sojourn and travel and unrecorded successful our country."