Saudi Arabia kicks off landmark law to privatize sports sector

​Saudi Arabia’s new sports law went into effect on June 11 of this year; it consists of 11 chapters and 97 legal articles. It is clear that this law will turn the page on sports as a recreational activity, paving the way for privatization and sports companies, and transforming sports clubs into investment entities capable of acquisitions and mergers, as well as offering shares for subscription on the Saudi stock market. Previously, clubs were managed and supported by the state. 

Today, the goal is to increase the sports sector’s contribution to GDP by 2030 to 65 billion riyals — approximately $17.33 billion — while also raising the percentage of people participating in sports in Saudi society to 10 percent. A study published by the journal International Sports Economics in the United Kingdom in 2019 found that converting clubs into joint-stock companies increased their market value by 42 percent over the first five years as a result of diversifying their sources of income.

What is particularly noteworthy, in my opinion, is what is addressed in Article 5 of the law, which has expanded the scope of penalties — previously limited to players and officials on the field — to include journalists, content creators, and influencers who incite sports fanaticism, as well as hatred and racism. This is a positive and necessary step, because it will foster a sports environment free from verbal abuse. The law also classifies a player’s body as a protected asset, the use of which is prohibited without the player’s consent — specifically referring to players’ biometric data, which is digitally tracked on the field or during training sessions. 

Although the sports law is comprehensive, its provisions do not address important and critical issues, such as the lack of restrictions preventing new investors from changing club names and identities, or relocating them to another city in search of greater profits.

Today, the goal is to  increase the sports  sector’s contribution  to GDP by 2030  to SR65 billion.

In 2022, the English Football Association introduced a law known as the “Golden Share,” which grants the club’s supporters’ association a legal veto to prevent any change to the club’s identity. Perhaps the ministry of sports could consider adding a detailed provision to the implementing regulations that would grant it — or the supporters’ association — a legislative “golden share” similar to the English model.

Another aspect appears to be the elimination of personal discretion, as evidenced by the provisions of the law in Articles 41 through 45 regarding athletes’ agents and club scouts, who are required to obtain professional licenses and financial insurance against errors, with a specific cap on commissions, in accordance with FIFA amendments. 

The French journal European Sports Economics discussed this issue in a study published in 2021, concluding that regulating the work of player agents and capping their commissions increases players’ wealth after retirement by 28 percent and reduces legal cases and financial disputes in court by 40 percent. The preceding provisions are consistent with this approach. International studies have shown that 60 percent of international football players declare bankruptcy within five years of retirement due to poor financial management. 

To address this, the Saudi legislative framework includes a provision requiring companies to deduct a specified percentage from players’ annual contracts, channeling it into closed-end investment funds managed under the supervision of the Saudi Central Bank. The player himself is not entitled to access these funds until he retires or suffers an injury that ends his athletic career, thereby ensuring that sports stars do not become financially struggling individuals in their communities.

The International Journal of Sports Management and Marketing in the Netherlands, in a study published in 2024, discussed sports management in the Kingdom and concluded that attracting international stars to local leagues and leveraging their fan bases increases competitive market value and the country’s brand value by 67 percent. The study stipulated that this requires flexible and advanced laws that ensure the protection of assets and investors — a framework established by recently enacted Saudi legislation. 

I must also mention the Sustainable Takaful Sports Fund, which will deduct a percentage of the net profits from investments, along with television broadcasting rights from sports companies, and place them in a unified charitable fund, which will provide retirement pensions, comprehensive health insurance, and housing and social welfare for all former athletes, administrators, and referees who face difficult living and health conditions — especially those who were prominent figures in the sports scene during the amateur era.

Despite what has been stated, the law has not established any legislative or regulatory cap to prevent the boards of directors of sports clubs from excessively raising ticket prices for matches and season tickets, which may exclude those with limited incomes and bar them from the less expensive general admission sections, even though they represent the majority of fans. The English Football League faced this problem in 2016, and decided that the maximum ticket price should not exceed £30. It has been proposed to the ministry of sports that a provision be included in the section on the rights of facilities and fans, setting a ceiling on the prices of season tickets and regular tickets, in line with the average household income and in a way that serves the public’s passion for the sport.

To elaborate on what has been discussed, the law does not specify who holds the rights to sell a player’s digital and symbolic identity — the avatar — particularly in global video games and metaverse platforms. In 2020, the well-known Swedish star: Zlatan Ibrahimovic, sparked a famous legal crisis when he sued Electronic Arts Sports for using his face and name in the game FIFA, without his permission, citing the 1999 Individual Intellectual Property Law, which is in effect in Europe and the United States.

In the Saudi context, it is essential to issue a detailed appendix to chapter seven, which pertains to intellectual property, clearly distinguishing between the club’s commercial rights on the field and the player’s digital rights in the virtual world, to avoid potential problems. 

This does not negate the fact that the law represents a major qualitative leap forward for Saudi sports, but it is constructive criticism from someone who always wants only the best for his country.

• Dr. Bader bin Saud is a columnist for Al-Riyadh newspaper, a researcher in media and knowledge management, a university professor and expert in crowd management and strategic planning, and the former deputy commander of the Special Forces for Hajj and Umrah in Saudi Arabia. X: @BaderbinSaud.