The governance challenges facing Saudi Pro League football clubs

The Vision 2030 plan for Saudi Arabia is calling upon football teams to modernise their governance structures and improve their financial performance. A new report by Strategic Gears suggests that boosting domestic and international engagement with the Saudi Premier League may be key to achieving this objective.

Saudi Arabia has been an international force in football for decades. Its most dominant club, Al Hilal, has used its position in the state to successfully attract top talent, and secure its position as Asia’s most decorated club – both domestically, and in continental competitions.

Meanwhile, Saudi Arabia has been throwing its considerable financial weight behind a number of PR initiatives that would further boost its reputation as a global force in football. Striking deals with the football associations of a number of European leagues, the country has played host to showpiece matches between La Liga and Serie A clubs, and is currently understood to be mooting a bid to host the 2030 World Cup.

That’s before even mentioning the takeover of Newcastle United, which saw the Public Investment Fund of Saudi Arabia – Chaired by Crown Prince Mohammed bin Salman – purchase the North Eastern club in late 2021.

All of this means that Saudi Arabia is never far from the conversation, when it comes to discussing the sport’s top table. In stark contrast, however, the nation’s grassroots infrastructure is much less developed – short of funds, and with dwindling participation.

As with every other facet of life in the Kingdom, though, the country’s grand Vision 2030 plans are looking to alter this.

Governance Initiative

Under the umbrella of Vision 2030, the Ministry of Sport has launched a Governance Initiative, aimed at realising the economic and social benefits of opening up sports. The plans and goals include financial efficiency and improved transparency to boost investor interest; stronger governance practices to allow better access to capital; and improved reputation, to boost domestic uptake and enjoy more international interest.

A new report by Strategic Gears now sheds light into the impact of and progress on the Governance Initiative. The leading consultancy based its analysis on desk research, interviews with Saudi sports clubs and by drawing insights from its long-term engagement with several clubs over the past years.

According to the analysis, clubs face a range of challenges in meeting their Governance Initiative goals, ranging from strategic to operational and financial aspects. These challenges vary according to the size of the club.

First, and perhaps most obviously, many clubs are facing major financial hurdles. Only four clubs in the Saudi Premier League operated a profit in the 2020/21 season, while the average club lost SAR 23.72 million.

Strategic Gears suggests that diversifying revenue streams could rectify this. For example, one of Vision 2030’s plans is to increase football participation by 40% in the next eight years.

Opening up the sport to women could help meet this, while also allowing millions more consumers to invest in the Saudi Premier League – boosting gate revenues, and lacklustre turnouts. This could attract advertisers, and subsequently boost microscopic broadcast revenues. In the 2020/21 season, the league brought in €16 million from broadcasting – a far cry even from the lowest tally of the Big Five league; €973 million from Italy’s Serie A.

Relatedly, a second challenge to football clubs looking to modernise their governance is on the operational front. In order to facilitate a raise from the current 30% utilisation of stadium capacities in the Saudi Premier League, clubs will need to retain and recruit more staff.

Some clubs are experiencing a high employee turnover rate and a shortage of staff at present. One of the main reasons shared by all of the clubs was that personnel were leaving for a better job or a greater wage.

Moving forward with a holistic strategy

According to the management consulting firm, the journey to a modernised Saudi football culture will not be an easy one – but it will provide significant benefits, if the country can overcome its initial challenges.

Taking a holistic strategy that aligns all improvement points should be at the heart of the improvement roadmap. Continuous monitoring and evaluation of strategies are needed for them to succeed – but clubs see this as a daunting prospect.

Even so, early on there are signs that things are improving. According to Strategic Gears, since the sports Governance Initiative's inception, Saudi sports clubs have consistently performed well throughout each season, even while struggling to adapt to new criteria and higher threshold scores – and most importantly, their performance in governance has improved with each season.

Looking at how to move forward from here, the researchers concluded, “Both the sports clubs and the Ministry of Sports perceive an opportunity to raise awareness about the Governance Initiative and its criteria among clubs and their personnel, as well as to develop a strong governance environment overall within the Saudi clubs.”

“In order for clubs to achieve the best governance outcomes, they must invest in continuous development and training. Another possible chance to strengthen the initiative is to develop a flexible governance model that can be readily adapted according to the clubs' size, requirements, and skills, as well as to continue showcasing and learning from other best practices locally and internationally.”