-
Sector Background
- The global sports market is expected to grow from an estimated SAR2 trillion ($530 billion) in 2020 to SAR2.3 trillion ($600 billion) in 2021 amid a bounce back from the COVID pandemic. According to the 2020 PwC Sports Survey, sports market growth expectations in the Middle East registered an 8.7 percent increase over the next 3-5 years, outpacing all other regions.
- Key sports initiatives under Vision 2030 include Quality of Life, a SAR131 billion ($35 billion) program aimed at funding and coordinating economic development through cultural, entertainment, and sports offerings and the National Transformation Plan 2020 which budgeted SAR7.7 billion ($2.1 billion) to the Saudi sports sector.
- Participation of Saudi citizens in sports rose from 13 percent to 20 percent since the launch of the Quality of Life program. The government aims to raise this figure to 40 percent by 2030 through investment in sporting facilities, expansion of women and children’s sports education and training, and raising the national profile of Saudi Arabia as a sporting destination.
Sector Strategy
- Since 2016, Saudi Arabia has actively bid to host major international sporting events and sought to attract international investment by developing venues for sports that are popular with Saudi audiences and take advantage of its dynamic topography.
- The government established a new Ministry of Sports in 2020 dedicated to the sports industry that encompasses the previous role of the General Sports Authority (GSA). Several organizations dedicated to talent development, including Mahd Academy, Leader Development Institute (LDI), and Saudi Sports for All (SFA), were introduced to drive youth participation in sports and establish partnerships with international universities and the private sector.
“U.S companies are crucial to the success of the sports industry in Saudi. The knowledge and expertise of the U.S are what Saudi sports strive for. For example, the U.S. excels in terms of college sports, infrastructure and sports complexes, TV rights, PR and media, coaching methodology, and fan engagement. U.S companies can participate in offering their services for Saudi sports and exploring the Saudi market, in areas such as talent ID technology and methodology, sports infrastructure, and best coaching principles and licensing.”
– Mr. Abdullah Hammad, President of Mahd Academy
- U.S.-Saudi partnerships in this field include an agreement between Harvard Business Publications and LDI to develop and implement courses and training programs to bridge knowledge gaps in the sports sector. A two-year marketing and promotional partnership between PepsiCo and SFA to support the expansion of athletics in the Kingdom was also signed.
Key Developments in Saudi Sports
- Following the launch of Vision 2030, the Saudi Cabinet approved new regulatory arrangements for the Ministry of Sports (then General Sports Authority) which increased access to financing, the option for privatization of professional sports clubs, and new licensing and access for women’s sports facilities.
- Saudi Arabia currently has SAR11 billion ($3 billion) major sports projects planned or under construction. These include megaprojects like NEOM, Qiddiya, AMAALA, Al Ula, and the Riyadh City project as well as municipal projects that include a new motor park at King Abdullah Economic City (KAEC) and construction of new recreational and university fitness facilities.
- The Saudi online gaming market is valued between SAR3.1 billion ($837 million) and SAR4.1 billion ($1.1 billion). Saudi Arabia has embraced the economic potential of the e-sports market by hosting international gaming competitions, signing deals with international gaming companies, and making significant investments in video game developers including U.S. companies Activision Blizzard, Electronic Arts, and Take Two Interactive.
Economic Impact
- The contribution of sports to Saudi Arabia’s GDP grew from SAR2.4 billion ($640 million) in 2016 to SAR6.5 billion ($1.7 billion) in 2019. That figure is expected to grow to SAR18 billion ($4.8 billion) by 2030, according to the Ministry of Sports.
- The Ministry of Sports estimates that female participation in sports has increased by nearly 150 percent in the past five years. According to a 2019 GAStat survey, 10 percent of males that did not practice sports cited lack of facilities as a reason compared to 25 percent of females, highlighting an addressable market opportunity for sports and fitness companies.
- While the Kingdom holds high ambitions for its competitiveness in professional sports under Vision 2030, recreational and tourism-related sports represent a broader array of activities and a sustainable market opportunity to build a new pillar of Saudi Arabia’s non-oil economy.
