Saudi Arabia’s royal family has learned the hard way that sportswashing is an extremely expensive hobby.
What happened: The Saudi-backed LIV Golf league will officially be liquidated after failing to secure enough capital to dig itself out of bankruptcy. Saudi Arabia’s Public Investment Fund (PIF) — which sank US$5 billion into the league — pulled its funding for the venture earlier this year.
U.K.-based investment group BC Partners had agreed to be the anchor investor in "LIV 2.0," but backed out this week after the league failed to get enough players to sign on.
Catch-up: PIF spent years pouring billions of dollars into everything from LIV to Premier League soccer to Formula One, which many critics argued was to distract from Saudi Arabia’s poor human rights record — a practice known as sportswashing.
While it grabbed headlines by poaching PGA players with nine-figure deals, LIV has proven to be a perennial money loser, providing little to no return on PIF’s investment.
Why it matters: LIV Golf’s collapse could be the final nail in the coffin of Saudi Arabia’s sportswashing blitz. After five years of watching billions of dollars evaporate, PIF is now doing some serious belt-tightening.
Already this year, the Saudis were forced to postpone their Olympics-esque Asian Winter Games, sold a majority stake in one of their most valuable soccer clubs, and just put another one — Cristiano Ronaldo’s Al Nassr — up for sale.
Zoom out: It’s not just sports that are getting trimmed from the Saudi expense sheet. The government is reportedly forking over US$16 billion to cancel chunks of its trillion-dollar desert megacity, Neom, which has — not unlike LIV — proved to be a money pit.—LA
