Playing the long game in the Saudi pro league By Owen Kamphuis On December 30th, 2022, Saudi Arabian football club Al Nassr shocked the soccer world a few years ago by announcing that it had signed Christiano Ronaldo, widely considered one of the greatest players ever, for two and a half years at $200 million per year. While strong regionally, the Saudi Pro League had never been considered a very high-quality league. Al Nassr, the club that signed Ronaldo, averaged slightly over 6,000 fans per match, compared with the nearly 72,000 of his previous club, Manchester United. So how could Al Nassr afford to pay all this money for a world-class superstar? The answer is the lifeblood of the nation he went to: oil. For many years, the Saudi Ministry of Sport owned almost all the clubs in the Saudi Pro League, including Al Nassr. However, the Ministry of Sport looked to make Saudi football more commercial, so it transferred ownership of major clubs to two sources: the PIF (Public Investment Fund) and Saudi Aramco. Both receive their revenues from oil and taxes on oil. While this may sound like a move from public ownership to private ownership, it is largely not. The PIF is owned by the Saudi government, as is almost all of Aramco. As part of Saudi's Vision 2030, the Saudi government increased the amount of money available for spending for the PIF. It was the PIF, as the main owner of Al Nassr and the other top clubs in Saudi football, who signed the paychecks to bring star players like Ronaldo to Saudi Arabia. Naturally, the expected outcome of the signing of these top players would be that demand for tickets would increase, while supply remained the same, increasing the quantity of tickets demanded and the price of tickets. However, while attendance has generally risen at matches as expected, it has not risen as high as clubs initially hoped. Most surprising, however, is that ticket prices remain shockingly low. Ronaldo's former club, the British Manchester United, sells its cheapest season tickets for $758 USD. Not all Saudi clubs sell season tickets; only Ronaldo's Al Nassr and Al Qadisiyah do. Al Qadisiyah attracted worldwide attention for the signing of world-class players such as Pierre-Emerick Aubameyang. However, season tickets for Al Qadisiyah start as low as a mind-boggling $56 USD! Because Saudi football is still government-owned to an extent, it is not driven to make a profit immediately, and the government is willing to subsidize tickets at least until fan bases grow larger. Although the Saudi Pro League has raised attendances since the arrival of world-class players, only the largest clubs have seen sellout crowds. The subsidies of the government-owned PIF could invite more fans to become regulars at matches. Dammam-based club Al Ettifaq, the largest club not one of the Big Four, sells single-match tickets as low as $2.6 USD when smaller clubs visit, and as low as $8 when the large, popular teams in town. Subsidies are a powerful government tool that can often be used for very good purposes. Economists generally agree that subsidies are a better answer than price floors or ceilings, which mess up the supply. However, subsidies are also very expensive, and in the case of the Saudi Pro League, also risky. Although these subsidies have limited the amount of money that clubs bring in currently, it remains to be seen if low, subsidized ticket prices will bring more fans to regularly head out to the stadium, thus increasing revenues of clubs and the government agencies that own them. Owen Kamphuis is an AP Economics student and resident of Saudi Arabia.
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