Saudi Arabia’s Potential Move into Formula One Team Ownership

Saudi Arabia is considering owning a Formula One team following its sponsorship roles and hosting of races. Prince Khalid, a key figure in the automobile federation, noted the financial potential, especially with backing from the PIF. The Kingdom’s investments in sports have led to scrutiny over motives, yet its growing fan base in the Middle East may catalyze its future involvement in the F1 team ownership market.

Saudi Arabia is exploring the prospect of owning a Formula One team, following its sponsorship and hosting arrangements in the sport. Prince Khalid bin Sultan Al-Abdullah Al-Faisal, chairman of the country’s automobile and motorcycle federation, indicated strong interest in team ownership. He emphasized the potential profitability, especially if pursued by entities linked to the Saudi Public Investment Fund (PIF). “It could happen, it could happen soon if you see the growth (of the sport),” he remarked.

The Kingdom’s involvement in Formula One began with hosting its first Grand Prix in 2021. Major players like energy firm Aramco actively sponsor the sport and have significant ties to teams, such as Aston Martin. The PIF also holds a 20.5% stake in Aston Martin, separate from the team under Canadian billionaire Lawrence Stroll’s control. Meanwhile, speculation remains about other teams for potential acquisition, including the Renault-owned Alpine team, despite the company’s statements against a sale.

Several Middle Eastern countries have made notable investments in Formula One teams. For instance, Qatar’s Investment Authority owns a minority share of Audi, while Bahrain’s Mumtalakat fund holds a stake in McLaren. Saudi Arabia’s commitment to sports, including Formula One, has attracted scrutiny and allegations of “sportswashing,” which the country denies, citing the protection of national security through its laws.

The Formula One fan base in the Middle East is expanding, particularly among young women, making the region a vital market with four races on the calendar. The sport’s increasing viewership has also raised team valuations, with Alpine and Aston Martin’s worth reaching approximately $900 million in 2023 after notable investments. As new teams like General Motors-backed Cadillac join the lineup, the opportunity for Saudi involvement could materialize. “I would like to see a Saudi team,” said Prince Khalid, expressing the desire for it to be established successfully and appropriately.

Saudi Arabia is poised to further immerse itself in Formula One through potential team ownership, building on its hosting and sponsorship of races. With strong interest from the PIF and significant investments occurring in the sport, the kingdom’s entry could enhance its influence in global motorsport. As the region witnesses growth in Formula One’s popularity, particularly among younger demographics, Saudi involvement may reshape the sport’s landscape, echoing the sentiments of key figures like Prince Khalid.

Original Source: www.channelnewsasia.com