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With oil at $150, Saudis buy Champions League franchise
Ole Hansen & Kim Cramer Larsson
Summary: Emboldened by surging crude oil prices, Saudi Arabia make waves on the international stage, as it manages to create a World Champions League after successfully buying the UEFA Champions League franchise.
Saudi Arabia’s radical restructuring of its economy away from its dependency on oil revenues towards becoming a tourism, leisure and entertainment powerhouse, receives an added boost from a meteoric rise in oil prices, which reach $150 per barrel around mid-year on stronger-than-expected demand, as the green transformation begins to sputter amid rising costs, and after OPEC+, led by Saudi Arabia, maintains a firm grip on supply.
In recent years, Saudi Crown Prince Mohammed bin Salman, a known football enthusiast, has overseen the revamping of the Saudi Pro League, with a focus on improved on-pitch performance through the acquisition of world-class players in order to become one of the top 10 football leagues in the world. However, with oil revenues surging, MBS sees an excellent opportunity to go one step further and, backed by FIFA, the Kingdom launches a successful attempt to buy the UEFA Champions League, one of the world’s most prestigious football tournaments.
Now holding the keys to the cherished football competition, the Saudis immediately move to transform it into a global club competition that FIFA, despite offering prize money of $150 million, had tried but failed to establish amid resistance from UEFA and the European Club Association, and not least the biggest clubs in Europe, fearing risk of players' fatigue. However, with the Saudi takeover, the new offer reaches a level where the big clubs cannot say no, especially after being offered money for all 220 leading clubs under the European Club Association umbrella. A FIFA World Champions League becomes a reality, with a considerable number of games being played in Riyadh. The new competition ends up consisting of 48 teams, with European clubs just like the current UEFA Champions League format being guaranteed 32 spots, Asia/Middle East, Africa, and the Americas getting five spots each in the tournament, and the remaining going to Oceania.
Market impact: Manchester United stock price doubles and Brent crude go to $150 per barrel.
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