With a sovereign fund, Saudi Arabia is overriding the rules of football

Ronaldo made the start: Saudi Arabia is overriding the rules of football with a state fund.

Chelsea will spend more than 600 million euros on newcomers in the 2022/23 season. Now the club needs money to get rid of excess players and get financially healthy again. The Londoners are being helped by a state fund from Saudi Arabia, which is circumventing the rules of football – in its own interest.

The five most expensive players signed by Chelsea last season are Enzo Fernandez, Wesley Fofana, Mykhailo Mudryk, Marc Cucurella and Raheem Sterling. Cost point for this not so prominent quintet: around 393 million euros.

Overall, the blues even spent 611.49 million euros. Because there are only 67.83 million euros on the outgoing side, this results in a hefty transfer minus of 543.66 million euros. What came out of it at the end, on the other hand, was less juicy. 12th place in the Premier League, out of the quarter-finals of the Champions League, no title.

Chelsea need to generate revenue – that’s where the Saudi sovereign wealth fund comes in

Now the club, which was sold in Spring 2022, is under pressure to generate revenue to comply with Premier League and Uefa financial rules. This is where the Saudi Arabian state fund Public Investment Fund, or PIF for short, comes into play, which Crown Prince Mohammed bin-Salman personally heads.

In the Premier League, he is best known for leading a consortium that bought Newcastle United in 2021. Even now, the PIF is not actively coming to the fore. But in the background, the fund takes a lot of money in hand – but one after the other.

It all started with Ronaldo – now the Chelsea Army is to follow

On January 1, 2023, Cristiano Ronaldo signed with Al-Nasr in Saudi Arabia – a mega coup for the club. But the commitment is also worthwhile for Ronaldo. Around 500 million euros will flow into his account for two and a half years. In the summer it becomes clear that the Portuguese was only the door opener.

In early June, Al-Ittihad announced the signing of Karim Benzema from Real Madrid. The transfer of N’Golo Kanté from Chelsea follows a little later. The two will probably not be the last players. Saudi Arabia is also interested in Bernardo Silva (Manchester City), Heung-Min Son (Tottenham Hotspur) and Ruben Neves (Wolverhampton Wanderers). But the interest in many Chelsea players is striking.

Al-Nasr is digging at Hakim Ziyech, league competitor Al-Hilal at Kalidou Koulibaly and promoted Al-Ahly at keeper Edouard Mendy. Striker Pierre-Emerick-Aubameyang is also associated with a farewell to Saudi Arabia. All these players have contracts with the Blues, would bring good transfer fees and Chelsea would save large salaries.

Saudi fund linked to Chelsea owners – now he could solve all money problems

But it only becomes piquant when you look at the ownership structure of the clubs mentioned. Al-Nasr, Al-Ittihad, Al-Hilal and Al-Ahly, like Newcastle United, are all majority owned by the PIF. But the fund also has excellent connections to Clearlake Capital Group – the investment company that bought Chelsea FC in spring 2022 under the leadership of Todd Boehly.

In the UK it is reported that the PIF has invested several billion euros in private equity firm Clearlake Capital. If you think further, it becomes clear that the Saudi sovereign wealth fund has an interest in putting Chelsea FC and its broken balance sheet back in order.

Speculations that the PIF was involved in the Chelsea takeover have so far been denied. In addition, the Premier League examines the ownership structure of clubs when they are taken over. At the request of thesports showSo far, however, Chelsea FC and the Premier League have responded to Clearlake Capital regarding the ownership structure of the Blues and possible influence by the PIF.

If Chelsea plays internationally again, Uefa faces a big problem

Problems also threaten at international level if Chelsea should qualify for the European Cup again. There it is forbidden for a natural or legal person to control more than one club. Especially in the case of private equity, the collection of borrowed capital for investments, there is a risk of a transparency problem.

Problems like this are unknown in Saudi Arabia. If club owners want to upgrade the league and invest billions in transfers to do so, they can do so – no matter how many clubs they own. There are no financial rules in Saudi Arabia of the kind that have to be observed in Europe.

For the “Vision 2030”, the Saudi state fund wants to host the 2030 World Cup

That would not be conducive to the major goals of the sovereign wealth fund. Bit by bit, the PIF is to become the largest sovereign wealth fund in the world. The Saudi government has already published a development plan for this with “Vision 2030”. In the course of this, Lionel Messi also advertises for Saudi Arabia and is handsomely rewarded for it.

Sporting events should also be part of this vision. After the Asian Football Championship in 2027 and the Asian Winter Games in 2029 (with temperatures between 25 and 35 degrees in winter), it should then be one size larger. Saudi Arabia wants to bid along with Egypt and Greece to host the 2030 World Cup. This would be the first World Cup to take place on three continents.

There is competition here from South America, among others, where a group of four from Argentina, Chile, Paraguay and Uruguay wants to apply. After exactly 100 years, that would be a return to the roots. However, anyone who knows Fifa and its boss Gianni Infantino knows that financially weak countries traditionally have good chances of hosting the World Cup. The fact that Argentina’s best-known footballer advertises the competition with the hashtag #VisitSaudi is just a side note at this point.

Jean Harris

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