January 3, 2019 / 12:23 PM / 19 days ago

Saudi Arabia may need extra time to privatize soccer clubs

DUBAI (Reuters) - Saudi Arabia’s plan to privatize its soccer clubs could be delayed beyond the targeted 2020, the head of the country’s soccer federation told Reuters, in what would be the latest setback to economic reforms.

FILE PHOTO: Saudi women watch the soccer match between Al- Hilal club against Al Ittihad club at the King Fahd stadium in Riyadh, Saudi Arabia January 13, 2018. REUTERS/Faisal Al Nasser

Sport is one of the pillars of the government’s Vision 2030 goal to raise living standards and diversify the economy beyond oil exports, while the privatization of soccer clubs has been earmarked as an early candidate in a drive to privatize state-linked assets.

Former Croatia manager Slaven Bilić and Brazilian player Giuliano are among the top names to grace the Saudi league, in which Al Hilal are reigning champions.

The authorities previously indicated soccer clubs would be part of an initial tranche of privatizations to be finalised by 2020, but Qusai al-Fawaz said the date was uncertain.

“Privatization is the long-term plan,” he said. “I don’t have an exact time for this. I don’t know whether it will be 2020 or 2022 until the plan is ready.”

A delay would be the latest setback to the planned sale of state assets. Last year, the country shelved plans to float oil giant Aramco, but said the sale would happen by early 2021.

Sources told Reuters last year that privatization proposals for King Khaled International Airport in Riyadh had also stalled. Still, plans to sell flour mills are moving ahead.

The investment climate in Saudi Arabia has recently been hit by the murder of Saudi dissident Jamal Khashoggi.

Fawaz said the kingdom expected to draw up a blueprint for the privatization of soccer clubs in the coming months.

“Nothing is seriously happening so far but we expect the privatization of clubs will move very quickly in the upcoming months,” he told Reuters. “We will pass a very comprehensive plan on how to move forward.”

Jadwa Investment, one of the kingdom’s largest privately owned investment banks, was previously appointed to advise on the privatization of up to five soccer clubs in the Saudi Professional League, Reuters reported in February 2017.

“Until we get a full plan, we can’t tell whether its the five clubs or full 16 (that will be privatized),” Fawaz said.

The federation, which aims to make the Saudi Professional League one of the top ten soccer leagues in the world, has attempted to clear the way for privatization by working with global soccer governing body FIFA to try to clear some of the clubs’ international debt, according to a presentation given by Fawaz at a sports conference in Dubai on Wednesday.

In another move aimed at supporting the clubs’ financial stability, the authorities also helped to negotiate the largest TV coverage deal in the kingdom’s history when Saudi Telecom last year agreed to pay $1.8 billion to broadcast Saudi professional matches over 10 years.

Editing by Mark Potter

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