It’s only the latest sign of Saudi Arabia’s expanding power, as the country spends billions abroad in what it says is an effort to diversify its economy away from oil. (Skeptics say it is trying to cleanse its reputation and shore up higher oil prices.) Secretary of State Antony Blinken met with Mohammed bin Salman, the kingdom’s crown prince, this week in an effort to repair strained ties.
Meanwhile, deal makers say that Saudi Arabia has become a looming presence across the M.&A. and investment landscape. Private equity and venture capital firms have also flocked to the kingdom, hoping to tap its oil-rich coffers for new capital, particularly as raising money from China has become dicier (more on that below).
Sports is a sector where Saudi Arabia has bought new prominence. The kingdom’s sovereign wealth fund — whose governor, Yasir al-Rumayyan, will be the chairman of the combined PGA-LIV organization — bought Newcastle United soccer club in England’s Premier League, and has ties to Formula 1 racing, boxing and W.W.E. pro wrestling. Just yesterday, the Saudi soccer league recruited Karim Benzema, one of the world’s top players, in an effort to become a world-class competition.
The golf merger prompted deal makers to speculate over whether the Saudis could aim at even bigger targets, including a team in the N.B.A., which recently changed its ownership rules to allow for sovereign fund investment, or another American sports league.
The golf deal isn’t done yet, however. PGA officials have been meeting with players, many of whom rejected big payouts from LIV to stick with the competition. Antitrust investigators had already been scrutinizing the PGA Tour over whether it was undermining the golf labor market. (Its tactics against LIV are a factor in the case, but not central to it.)